To ask Her Majesty’s Government what steps they have taken to defend the human rights of Iranian refugees at Camp Ashraf; and with what other countries or agencies they are involved in those efforts.

My Lords, officials at our embassy in Baghdad and at the Foreign Office follow developments at Camp Ashraf closely. We have raised Camp Ashraf with the Iraqi Prime Minister, the Human Rights Minister, the Minister of Internal Affairs and, recently, my ministerial colleague Ivan Lewis with the Foreign Minister, to remind them of the need to deal with the residents in a way which meets international humanitarian standards. We are in contact with international partners and UN agencies. Camp Ashraf is part of a sovereign and democratic Iraq and is primarily an issue for the Iraqi authorities to address.

I thank the Minister for that Answer. As it was the Government who invaded Iraq on flimsy evidence, and who sacrificed our troops and placed a new Iraqi regime in power, how do they justify walking away from the responsibility for what has been left behind in respect of the oppression, murder and torture of those Iranian refugees in Camp Ashraf who share our loathing of Ahmadinejad’s murderous regime in Iran? Do they care that currently Camp Ashraf—

Move on!

Do they care that currently Camp Ashraf residents are being denied food, medicine and winter fuel, and live under a real threat of being moved by Nouri al-Maliki’s troops—

Order!

My Lords, perhaps I may remind noble Lords that their questions should be brief, as should the Minister’s responses.

I can confirm that we consistently remind the Iraqi Government of all their international obligations on this matter. The Iraqi Ministers confirm that the Government are in discussions with the camp leadership and that they will treat the people in the camp in line with international humanitarian law. There is absolutely no evidence of the kind of intimidation and harassment which the noble Lord has described. Indeed, the access to food and medicines, to clean water and medical supplies, clearly exists. There have been some disruptions to supplies entering the camp, but I understand that all those have been resolved.

My Lords, does the noble Baroness agree—

My Lords—

My Lords—

Waddington!

My Lords, this works only if noble Lords are prepared to give way. Shall we hear from my noble and learned friend first and then from the Conservative Benches?

Does my noble friend accept that to deliver the refugees into the hands of the Iranian regime would, for some of them at least, be the equivalent of a death sentence? Does she further accept that the attack on Camp Ashraf by Iraqi forces in July, leaving 11 dead, establishes that it cannot safely be left in Iraqi hands? Is this not a matter that we should discuss with our American allies?

I can assure my noble and learned friend that these matters are regularly raised by our ambassador and others with the United Nations and with the authorities in Iraq. It is the long-stated wish of the Iraqi authorities to close the camp and transfer the residents, but they have given us clear assurances, most recently at a meeting on 27 January, that they will do that in line with international and humanitarian law and that no Ashraf residents will be forcibly transferred to a country where they have reason to fear persecution or where substantial grounds exist to believe that they could be tortured.

My Lords, does the Minister agree that it is very important that we should be clear about the responsibility for this matter? Is it not right that back on 13 April last year, our ambassador in Baghdad called on the Iraqi Minister to seek new assurances that the residents of Ashraf would be treated humanely? Was that not an acknowledgement of the British Government’s responsibility for the welfare of the people of Ashraf? Indeed, how can the British Government avoid their responsibility for the welfare of the people of Ashraf when, first, they were a party to the invasion of—

Order!

I do not think I am being very long. First, they were party to the invasion of Iraq and, secondly, they were party—

Too long!

My Lords, what is good for the goose is good for the gander. The Companion reminds us that we should ask no more than two questions when questioning Ministers. I respectfully urge noble Lords to recall that.

I thank the noble Lord for the questions. I can assure him, as I did in my Answer to the noble Lord, Lord Maginnis, that Iraq is a sovereign and democratic state and, as such, has that responsibility. It has never been the case that the UK has responsibility for the residents in the camp. However, as I have said on a number of occasions, the UK works with the United States and the United Nations to ensure that the rights of the residents of Camp Ashraf are protected.

My Lords, will the Minister confirm that these people are not non-protected persons under the Geneva Convention? If that is correct, do the Iraqis have the right to deal with them within internal Iraqi constitutional law? Have the results of the inquiry come out yet?

The view of the UK Government is that with the formal end of hostilities and the transfer of responsibility for the camp to the Iraqi authorities, any claim to protected person status by the camp’s residents under the fourth Geneva Convention has ceased to apply. That view is shared by the United Nations. The camp leadership have been given that information. As for the inquiry into the violence that occurred in July, we asked for a review of the events that took place. The ambassador met the Minister responsible on 27 January and reminded him of the need to send a copy of the report. We are still waiting to receive it. I will urge the ambassador to press again for a response from the Government.

My Lords, how does the Minister square her statement to the House that there is no evidence that the residents of Camp Ashraf are at risk with the statement from Amnesty International that they are at risk of,

“arbitrary arrest, torture or other forms of ill-treatment, and unlawful killing”?

My Lords, I can only reiterate what my noble friend Lord Brett said in the answer that he gave to that question. We have no evidence of intimidation or harassment in the camp. I am aware of the Amnesty International report. The recent UN mission reported that the camp is calm and that the residents have access to food, water and medical supplies. We have no evidence of intimidation, harassment and the other issues raised by Amnesty International.

Lord Teverson to ask Her Majesty’s Government what proposals they have following their estimate that, of 37,000 tonnes of cod, haddock, plaice, sole, anglerfish and other demersal species caught by English and Welsh registered vessels in the North Sea and south western waters during 2008, 9,400 tonnes were discarded.

My Lords, the UK Government are funding initiatives to address discards, working together with the fishing industry. These include limitations on fishing effort, improving gear selectivity and closures that protect spawning and undersized fish. The UK has also committed, with Denmark and Germany, to trial a catch quota management system. Through the review of the common fisheries policy, we are working towards a European discard policy that applies to all member states, regardless of where they fish.

I thank the Minister for that reply, but I am rather disappointed. The Secretary of State for the Environment called last month for a ban on waste food, yet he is responsible for discards whereby we throw away a quarter of our most precious species. Is that not obscene, and should not the UK Government insist, in relation to the common fisheries policy, that like Canada, Norway, Iceland and New Zealand, we should have a ban on discards? Why cannot the EU do that when other nations can?

My Lords, of course the Government are opposed to discards; the problem is monitoring and controlling them. The issue is exacerbated by the developments in gear which have led to the catching of a greater amount of fish of the wrong kind as far as the fishing boat is concerned. However, we are making progress and have almost halved the tonnage of discards in the past 10 years. We are also spending considerable sums on it, pursuing initiatives and responding to the European Commission’s request that further action be taken.

My Lords, will the Minister tell the House what lessons the Government have learnt from the Norwegian experience in these matters, and have the Government put pressure on the EU to look at the situation of France and Spain and to insist that they report accurately their discards to the EU?

My Lords, we are critical of other countries that do not reach the same standards and are perhaps not putting in the same level of investment as we do. Nevertheless, monitoring is certainly the problem with regard to discards. That is why we are piloting electronic measurement on-ship and encouraging British fishermen to participate in initiatives to monitor the nature of the catch and ensure that discards are kept to the absolute minimum, with the expectation that the rest of Europe will follow any successful development of that policy.

My Lords, can the Minister tell us what progress is being made with the revision of the common fisheries policy? In his Green Paper, the outgoing Commissioner drew attention to the possibility of making progress on a ban on discards. What is the progress on that subject?

My Lords, the Commission asked all member countries with fishing interests to submit proposals for the reform of the common fisheries policy by the beginning of this year. The submissions had to be in before December and we met that deadline. The Commission will publish the responses from the nations concerned with fishing, with a view to developing a fresh approach to the fisheries policy, which we all recognise is in need of very considerable reform.

My Lords—

My Lords—

My Lords, we have not yet heard from UKIP.

I am most grateful to the noble Lord. Could the Minister confirm that the countries mentioned by the noble Lord, Lord Teverson, in his second question—countries which all run successful fisheries policies—are all outside the European Union? Would it therefore not be better for this country to follow their path, repatriate the common fisheries policy and run it from the UK in the interests of UK fisheries?

My Lords, there is still the question of who fishes in which waters. The noble Lord will readily accept that the fishing fleet of Spain, for instance, has been significantly expanded in recent years. It is important that we have a common fisheries policy that ensures that the practices that are followed by the Spanish, and to an extent by the French, are the high standards that we are trying to set, particularly with regard to our discard policy for British fishermen.

My Lords, what is the logic behind discards? Fish tend to swim not in isolation but in shoals of different sorts of fish. Why, when we are short of fish to eat, are we throwing into the sea fish that could easily be eaten, just because they happen to be the wrong sort of fish for that particular boat?

My Lords, the fishermen have to make a living. Their problem is that only certain fish are marketable and economic to land, to say nothing of the fact that new gear tends to catch in its nets a whole lot of sea animals and fish that are really not edible and which are therefore discarded. The noble Countess is right; we want to change the gear that is used so that it is appropriate for the commercial fish to be landed. That is exactly what the British Government are seeking to achieve.

My Lords, do we not also want a change of gear in education policy in this country so that we can encourage people to eat edible fish that is highly enjoyable but that is currently being discarded?

My Lords, I hesitate to cross the British people when it comes to the traditional fish that they enjoy. My noble friend is right that the British public are finding increasingly palatable fish to which we have not been used in the past, but that does not alter the fact that we need to protect the fishing grounds of our traditional fish, too.

To ask Her Majesty’s Government what discussions they have had with universities about safeguarding social science and humanities research in the Future of Higher Education Framework; and what reassurances they have given.

My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I declare an interest as someone involved both in a professional and lay capacity in the work of universities.

My Lords, the Government will continue to invest in the very best research in the social sciences and humanities in UK higher education institutions. Funding through the economic, social sciences, arts and humanities research councils combined is due to rise to £286 million in 2010-11. The Higher Education Funding Council for England’s research allocations for social sciences and humanities for 2009-10 total £517 million, and we are maintaining research funding to HEFCE in 2010-11.

My Lords, does my noble friend not agree that the social sciences and humanities are indispensible to generating an economically and socially successful society and to effective leadership in all dimensions of that society? Is there not a desperate need to reassert qualitative concerns in education as well as quantitative concerns? Is it therefore not important to realise that however significant STEM subjects are, STEM subjects without balancing research in social sciences can be dangerous?

I thank my noble friend for those remarks. We agree with him on the importance of arts and humanities research. While the arts and humanities research councils might not be as large as some other research councils, such as STEM research councils, it must be understood that social science and humanities researchers have significantly less need for expensive equipment and laboratories. The cross-council programmes bring social science and humanities expertise to bear on some of the most pressing issues of the day, such as living with environmental change, ageing, lifelong health, and well-being.

Does the Minister recall that the research councils are now asking investigators to comment on the impact of their research when they apply for a grant? Does he agree that to understand the impact of the research you have to understand the outcome of the research and that it is therefore fatuous to ask researchers to comment on the outcome before they have completed the research or have even started it?

My Lords, we are looking for quality-related research. The plain fact is that the funding for non-STEM subjects through quality-related research increased to £517 million in this academic year. We are maintaining that funding in real terms through HEFCE for 2010-11.

My Lords, UK universities are world leaders in the humanities and social sciences. More than 50 per cent of overseas students are drawn to study here by the excellence of teaching and research. From the figures that he has already produced, perhaps the Minister could clarify the latest figures given by Mr David Lammy on 20 January. They indicated that the Arts and Humanities Research Council granted around £60 million last year, which was about 5 per cent of the combined research council funding. Is the Minister satisfied that such levels of funding are sufficient and balanced to ensure the highest standards that we need in these departments?

I thank the noble Baroness for her question. The international comparative performance of the research base published in September 2009 shows that social sciences and humanities in the UK maintain their ranking in the G8 in numbers of papers and citations, ranking second only to the USA. Since the Arts and Humanities Research Council was created on 1 April 2005, funding has been increased by 35 per cent from £80 million in 2005-06 to £109 million in 2010-11. The AHRC will spend some £56 million this year in supporting a wide range of research in universities.

My Lords, I did not detect an answer to the question asked by the noble Lord, Lord Krebs. Does the Minister accept that in order to ensure that social science and humanities research is adequately funded, the research excellence framework should be reviewed to assess whether the weighting towards impact needs to be amended?

I am not sure that I am competent to answer that question. I would rather not just have a go—I would rather get it right—tempting though the offer is from the Opposition. I will write on that aspect. I understand the point that is being made about impact and outcome, but surely the most important thing is ensuring that we get the right funding for research. At the same time we should recognise our standing internationally.

My Lords—

My Lords—

My Lords, we have yet to hear from the Labour Benches. We have already had one question from the Cross Benches.

My Lords, are not the problems that we see at the LSE an example of the difficulties that can be created? In particular, is it not worrying that emphasis in the changed criteria for research on the economic impact is necessarily disadvantageous to the humanities and the social sciences? Are we not putting at risk one of the glories of our educational system?

I thank my noble friend for that question. We do not think that we are putting those subjects at risk. Clearly, there is a balance to be struck. The share of funding for non-STEM subjects did not decline. In fact, funding for non-STEM subjects increased, although not as much as it would have done. Again, I stress the need for a balance. We need also to protect STEM from a decline in funding to get us out of the downturn and to equip our next generation with the skills to compete in global, high-skilled knowledge-based economies, and I make no apologies for that. Anyway, the two groups are complementary.

My Lords, the Minister answered the question put by his noble friend Lord Judd in terms of the levels of funding in the recent past, but has not answered it with regard to reassurance for the future. Given the Government’s rather dubious criteria of functionality to render educational research worthwhile, is he aware that recent evidence suggests that for every £1 invested in humanities research, a return of some £10 is made to the economy? Thus, even on the Government’s own criteria of the value of educational research, ring-fencing it for the future would be justified.

I agree with the right reverend Prelate that the creative economy is fundamentally important. I shall finish on this because we are running out of time. The combined budget of the Arts and Humanities Research Council is due to rise from £247 million in 2008-09 to £286 million in 2010-11. We are pledged to the future as well as the past.

To ask Her Majesty’s Government whether they will investigate claims that asylum seekers were mistreated by staff of the UK Border Agency.

My Lords, an internal investigation into allegations that appeared in the Guardian newspaper on 2 February has been commissioned. The Home Office expects the highest levels of integrity and behaviour from all its members of staff and takes all allegations of inappropriate behaviour very seriously.

My Lords, the jailing yesterday of Ali Dizaei 10 years after the Macpherson report on institutional racism clearly demonstrates that racist behaviour or racism of any kind is not acceptable. The Guardian report clearly illustrates the culture of impunity among some staff in the UK Border Agency. Will the Minister revisit the decisions taken by the agency in relation to asylum seekers who have been deported to ensure that racism played no part whatsoever, and will he ensure that the inquiry looks at the wider aspects of race relations in the agency?

My Lords, I agree entirely with the noble Lord that racism should play no part in decision-making in relation to asylum issues, and I am rather astonished that he would claim that the fact that there has been an allegation means that there is impunity. We do not know that. We know that an allegation has been made that will be seriously investigated independent of the department and separate from the Cardiff office. People have been accused of things for which they have not yet been found guilty. If there is guilt to apportion, it will mean that lessons have to be learnt. The noble Lord’s latter point of ensuring that there have been no deportations as a result of racism is important. The removal stage is reached only after consideration by the Immigration Appeals Tribunal. I am confident that the inquiry will find a solution to the problem and verify whether the allegations are correct. However, at this point I think we should work on the old premise that people are innocent until proven guilty.

My Lords, if the inquiry endorses the claims that have been made about this behaviour, will the Government bear it in mind that immigration officers hold powers at least equivalent to those of police officers for interviewing suspected criminals, because they can temporarily incarcerate and deport people? Is it not therefore right that immigration officers should be subject to the same camera and voice recordings when such interviews are carried out?

My Lords, again we seem to be leaping forward from a point made in a newspaper article. I cannot say that every article that I have ever read has been 100 per cent accurate, although I believe that this should be investigated. However, we should await the outcome of that investigation before we rush to judgment.

My Lords, the Minister will recall the report published in July 2008 by the Medical Justice Network on private contractors’ abuses against deportees, which was reinforced a year later by the report of the chief inspector, who stated that safeguards to protect against abuses of the process were “singularly lacking”? What has happened to the report by the noble Baroness, Lady O’Loan—then Dame Nuala O’Loan, the Northern Ireland ombudsman—who was supposed to be inquiring into these abuses and the lack of any proper remedy? When is her report going to be published?

I have taken note of the noble Lord’s question and will respond to him about the report and the follow-up. It has to be said that after those allegations were made, there was a change in the regime. With the noble Earl, Lord Listowel, I had the privilege of visiting Yarl’s Wood, about which one of the major accusations was made. We were shown the major changes that had been made to how that place operates. I am confident that the issues of a year or two ago referred to by the noble Lord are no longer the norm.

Does not my noble friend agree that this is not simply a management problem but also a cultural one? We are asking staff members to do extremely difficult work in these centres, so training is crucial. Central to that training should be an understanding that the government strategy is to win hearts and minds, not to increase alienation.

I agree entirely with my noble friend but I believe the training to be thorough, and that the great majority of the 24,000 people employed by the UKBA not only understand our training but actually treat asylum seekers as they should be treated—as human beings with a problem and with legal rights. If we are talking about any, it is a tiny minority. Frankly, I doubt that the problem is as great as is sometimes suggested in the Daily Mail and other newspapers.

None the less, my Lords, the Minister has made a stout defence of something which may or may not turn out to be indefensible. Can he explain why the head of the UK Border Agency has had on occasion to issue a sincere apology to immigrants; and have any agency staff been given written warnings or been dismissed in the past 12 months?

I always delight in the noble Lord’s questions. They are always very precise and usually defeat me in terms of the information available in my brief. I will respond to him on the latter point, namely the question of any warnings. It has to be said that the UK Border Agency has been dealing with a whole series of backlog asylum investigations. In fact, there is a significant report published today, Fast and Fair? from the Parliamentary Ombudsman, which has some criticism of the UK Border Agency—a genuine criticism which I think the agency will take on board. It is the fourth report of the ombudsman. It says, “Significant improvement but must try harder”. It sounds like one of my school reports, except the word “significant” was never used.

My Lords—

My Lords—

My Lords, I wonder if we can hear from the noble Earl.

Would the Minister accept that he was a little dismissive of the question asked by the noble Lord, Lord Avebury? It was only last summer that Her Majesty’s inspector of prisons reported, and these are not isolated incidents; they are a policy.

I would be no more dismissive of a question from the noble Lord, Lord Avebury, for whom I have a tremendous regard, than I would indeed from the noble Earl, for whom I also have a tremendous regard. I did say I would look into the issue and respond, and I will. If I gave the impression of being dismissive, I apologise to the House.

My Lords, before we begin the Second Reading of the Terrorist Asset-Freezing (Temporary Provisions) Bill, it may be helpful if I say a few words about anticipated timings for the remainder of today’s business.

There are five speakers on the list for Second Reading, so we anticipate Committee on the Equality Bill to follow it at around 4.30 pm. We would then aim to continue with the Equality Bill until around 6.30 pm, when we would take Committee stage of the terrorist asset-freezing Bill. The intention would then be to resume proceedings on the Equality Bill at a later stage this evening after completion of Committee on the terrorist asset-freezing Bill. The deadline for tabling amendments for Committee on the terrorist asset-freezing Bill will be 5.30 pm.

There is a great deal of important business to get through today, and I am sure that all noble Lords will wish to make effective use of the time available, while ensuring proper and efficient scrutiny of the legislation before the House. As is usual on days like today, expected timings of business will be displayed from time to time on the annunciators.

That the Bill be read a second time.

My Lords, the Terrorist Asset-Freezing (Temporary Provisions) Bill makes provision for the temporary validity of Orders in Council that impose financial restrictions on, and in relation to, persons suspected of involvement in terrorist activity, and for connected purposes.

The whole House will, I know, understand that terrorism continues to pose a threat to the UK. The Home Secretary recently raised the UK terrorist threat level to “severe”, meaning that an attack on the UK is highly likely at any time. As noble Lords know, terrorist organisations including al-Qaeda have executed or planned a succession of attacks with the aim of causing mass casualties. Measures to prevent terrorist finance are at the heart of the international effort against terrorism. Without resources, terror networks are unable to plan, to organise or to execute attacks. For this reason, the United Nations requires that all states freeze, without delay, the assets and resources of people who commit, attempt to commit, participate in or facilitate the commission of terrorist acts. Our tools to combat terrorist finance therefore, have become an important part of the UK’s counterterrorist strategy. Our measures must be proportionate but they must also be robust and effective. Terrorist attacks are not expensive, and even small amounts of money in the wrong hands can cause devastation. The attacks in London on 7 July 2005 cost the perpetrators just £8,000.

While financial sanctions have a long history, their use against terrorists is only around a decade old. The UN Security Council established an asset-freezing regime against the Taliban in 1999. It was quickly extended to include Osama bin Laden and persons associated with al-Qaeda. In the weeks after 9 September 2001, the UN created a separate requirement on member states to freeze the assets of those involved in terrorism more generally, where those individuals were identified by member states. The UK acted quickly; using secondary legislation under the United Nations Act, we were able to ensure that our freezing regime was in place by 10 October 2001, only 12 days after the UN Security Council passed the resolution.

Some people have asked why we used secondary legislation under the UN Act in the first place rather than putting our regime into primary legislation. The answer is that in good faith we believed that the United Nations Act was the right legal base. Section 1 of the United Nations Act has been used since 1946 as an established basis for successive Governments to implement our UN obligations on matters concerning threats to international peace and security. Section 1 of the UN Act says:

“If, under Article forty-one of the Charter of the United Nations, the Security Council of the United Nations call upon His Majesty’s Government in the United Kingdom to apply any measures to give effect to any decision of that Council, His Majesty may by Order in Council make such provision as appears to Him necessary or expedient for enabling those measures to be effectively applied”.

Given that there are clear UN Security Council obligations to freeze the assets of terrorists, the Government believed that the UN Act gave them legitimate authority to make secondary legislation to freeze terrorist assets. The Court of Appeal upheld the Government’s position. The Supreme Court decided on 27 January 2010 that the United Nations Act does not go so far as to give us that authority and that the Orders in Council we have used were therefore not validly made.

However, I hope noble Lords will appreciate that until the Supreme Court made its judgment, the correct interpretation of the United Nations Act was unclear. The Government acted in good faith when using it as the basis for implementing UN asset-freezing obligations.

The Supreme Court ruled that the Terrorism (United Nations Measures) Order 2006 and the Al-Qaida and Taliban (United Nations Measures) Order 2006 were beyond the scope of the power provided by Section 1 of the United Nations Act 1946, and quashed both orders. On 4 February, it ruled not to grant the Government any stay or pause before its judgment took effect.

Assets frozen under the UN regime on al-Qaeda and the Taliban remain frozen under the effectively parallel EC regulation. However, the Supreme Court’s judgment has the effect of removing the sanctions for breach of its provisions, so we will attach sanctions to the EC regulation through secondary legislation. This will be debated in the House in due course through an affirmative procedure.

The court then also struck down the terrorism order 2006, and in so doing rendered vulnerable the terrorism orders of 2001 and 2009. There is no back-up EC regulation for the UK’s designations under the terrorism orders. Primary legislation is therefore needed to ensure that we can continue to freeze terrorist assets.

Currently, more than £150,000 is frozen in the UK under the terrorism orders. We need to act quickly to ensure that this money remains frozen and that suspected terrorists are not allowed to use the financial system to raise and move funds. That is why this Bill is being fast-tracked, with all stages being considered in this House in one day. I appreciate that one day is inadequate to consider legislation of this significance, but I hope noble Lords will understand why we need to act quickly.

The Bill seeks to provide a temporary legal base for the Orders in Council, aimed at freezing assets of those we reasonably suspect are involved in terrorism where it is necessary to protect the people of this country. This Bill will, if passed, restore the UK’s terrorist asset-freezing regime in primary legislation as a stop-gap, before a full Bill can be considered and, I hope, passed into law. This course of action allows the House to scrutinise our proposals, while eliminating any risk of a gap in our asset-freezing regime. Through this action we are able to provide legal protection for the banks, to ensure that terrorist assets remain frozen, even though the Supreme Court judgment was not stayed. We have already published the full Bill to which today’s legislation is merely a bridge. I hope the House will agree that the fuller Bill deserves a great deal of scrutiny.

When that fuller Bill is considered in the House, will it take account of the fact that, while this freezes some terrorist assets at present, many terrorists are closely involved in serious organised crime? The figures the Minister has given for what is actually going to be frozen under this are minute compared to the resources available to some of these organisations. One of the tragedies of recent years and successive Administrations around the world is the total failure to deal effectively with money-laundering by terrorists and serious organised crime.

I note the observation from the noble Lord, Lord King. Matters relating to serious organised crime are already dealt with by other agencies and legislation. This legislation focuses on the use of finances that are specifically related to the risk of terrorism activity which threatens the United Kingdom. No doubt the authorities will at all times be vigilant in recognising the area where organised crime may well abut terrorist activity, and will be alert to ensure that we are vigilant in addressing that risk.

I should make it clear at the outset that today’s Bill, and the fuller Bill, seek only to restore the asset-freezing regime that is implemented through the terrorism orders— that is, the regime mandated by UN Security Council Resolution 1373, where listings are made at the national level. The Bill does not seek to restore the UN al-Qaeda and Taliban asset-freezing regime. That is the regime mandated by UN Security Council Resolution 1267, where listings are made at the UN. As I mentioned earlier, the al-Qaeda regime remains in effect through a directly applicable EC regulation. Noble Lords will be aware that the Supreme Court had specific concerns about the UN al-Qaeda regime—in particular, the lack of direct access to a court for people who are listed at the UN. Those specific concerns do not arise on this Bill, because it seeks only to restore the terrorism order regime, where decisions are made nationally and individuals have access to UK courts.

With the House’s permission, I shall briefly outline the Bill’s effects. It seeks to maintain the Treasury’s power under the Orders in Council to designate persons if they meet both the required conditions of a legal test: reasonable suspicion that the person is involved in terrorist activity, and that the designation is necessary for public protection. The effect of a designation is to forbid dealing with a designated person’s funds and economic resources; to forbid making funds or economic resources available to such persons, and to forbid funds or economic resources being made available to a person when the designated person will obtain significant financial benefit. The orders will continue to provide for licences to permit access to funds and to ameliorate the effect of the sanctions. The Treasury will remain open to legal challenge to its asset-freezing decisions, including the procedures approved by Parliament in the Counter-Terrorism Act 2008.

Perhaps I might turn briefly to retrospection. The Bill makes retrospective provision in one respect only. It gives retrospective legal authority for banks and any other institutions to maintain existing freezes between the dates of the Supreme Court judgment—4 February—and Royal Assent. I know that retrospective legislation is a very serious business and should be contemplated only where absolutely necessary. I assure your Lordships that this provision is necessary; without legal cover, banks would not have been able to maintain existing asset freezes for the past five days, and asset flight might already have happened at a cost and risk to our national security.

The Bill is time-limited to expire on 31 December 2010. We believe that the end of the year is the right timetable, as it will allow time for more permanent asset-freezing legislation to be given full consideration both in Parliament and in pre-legislative scrutiny. I could not be confident that, given elections and recesses, this job of scrutiny could be safely dispatched and a full Bill could then be taken through both Houses before 31 July 2010. Today’s Bill is unavoidably urgent, but we do not believe that we should be fast-tracking two asset-freezing Bills through Parliament in close succession.

I want to respond to a number of points concerning human rights safeguards that were raised yesterday in debating the Bill in the other place, and which I expect noble Lords will also want to discuss today, both at Second Reading and in Committee. There are fundamental issues that are important to all Members of this House. Our intention is that all those issues be fully considered and debated when this House considers permanent asset-freezing legislation in the coming months. However, I understand that noble Lords will want some discussion of these issues today to be satisfied that the regime they are voting to extend in this Bill today until the end of the year is proportionate and fair.

Before coming to some specific issues, I want to explain that our asset-freezing regime is tried, tested and fit for purpose. It was subject to rigorous analysis by the Financial Action Task Force in 2007 and was judged to be, in its words, “fully compliant” with international best practice—we are the first country, incidentally, to get this top mark—and we have improved it through experience. For example, as the Supreme Court itself pointed out, the Terrorism Order 2009 is an improvement on the 2006 order, with more safeguards and greater proportionality.

One question that was raised yesterday in the other place, and which I see is also raised in an amendment we will discuss later, is whether “reasonable suspicion” is the right legal test. We believe strongly that it is. If we want the regime to be preventive rather than punitive, which we all do, freezing people’s assets only when they are convicted is not the right approach. Such an approach is not very preventive as it may mean that freezes cannot be imposed for more than a year after someone has been detained, while they are still awaiting trial. Indeed, waiting to freeze assets until someone is convicted may simply appear punitive; an additional form of punishment on top of a prison sentence. The Financial Action Task Force is clear that reasonable suspicion is a proper legal basis for meeting UN asset-freezing obligations. As I mentioned earlier, we do not simply rely on the reasonable suspicion test. Designations must also be necessary for public protection, which acts as a safeguard against any arbitrary use of the power to make designations.

A number of Members in the other place expressed concern that using reasonable suspicion as a test may leave people in a sort of limbo situation where they have their assets frozen without knowing the case against them, without being charged with a criminal offence and without any means of getting an asset freeze removed. I will explain why this perception is not accurate. First, it is not true that people do not know the case against them. When people are designated, we provide them with as much information as we can share about the reasons for their listing. Only relatively few cases involve closed source material that cannot be shared directly with the designated person. Of the 33 UK people currently designated under the terrorism orders, six were designated on the basis of closed information and 27 were designated on the basis of open material.

Secondly, it is not true to say that people on an asset freeze list are never charged with a criminal offence. In fact, a clear majority also face action through the criminal justice system. Of the 33 people designated under the terrorism orders, 27 have been charged with a terrorist offence. Of these, 22 have been convicted; four are awaiting trial or retrial; one has recently had their charges dropped and we are urgently reviewing their listing.

Finally, it is not true to say that people can never get off an asset freeze list. The Treasury has a track record of actively reviewing designations and revoking them when they no longer meet the legal test. Of the 51 UK designations made under the orders to date, 18 have been revoked following a Treasury review; for example, where criminal charges have been dropped or where an individual is no longer assessed to pose a significant threat. Under the Bill, the Treasury will continue to carry out such reviews on a yearly basis, or more frequently when there has been a change in a person’s circumstances.

A further question raised on several occasions yesterday in the other place was whether the right of individuals to challenge their designations in court under a judicial review procedure provided sufficient redress. The Government are of the view that court scrutiny should happen after freezing decisions have been taken and individuals have decided to challenge them. We do not believe that courts should be taking the decision to impose the freeze in the first place. These are decisions that the Executive can rightly take, with the safeguard, as I outlined earlier, that all decisions must be necessary for public protection and supported by proper evidence.

We believe that judicial review is the right procedure for the courts to examine cases that are brought before them. Judicial review is not, as some might argue, a light touch that lets the Executive off the hook. On the contrary, as we have seen in control order cases that have come before the courts, a judicial review procedure closely scrutinises the Government’s decision-making processes and the evidence used to support them.

It might help if I explain in detail how the judicial review procedure works for control orders. There is an automatic review process by the High Court to determine whether the Secretary of State's decision to make a control order was flawed. In other words, the judge must agree: first, that there is reasonable suspicion that the individual is or has been involved in terrorism-related activity; and, secondly, that a control order is necessary to protect members of the public from a risk of terrorism. The judge must also satisfy himself that each obligation imposed by the order is necessary and compliant with the ECHR, including Article 5, which deals with the right to liberty, and Article 8, which deals with the right to respect for private and family life. The judge will further ensure that the individual's right to a fair hearing in accordance with Article 6 is protected.

If any of these tests is not met, the judge can quash the order, quash one or more obligations imposed by the order or give directions for the revocation of the order or for the modification of the obligations that it imposes. The court may consider the case in open or closed session, depending on the nature and sensitivity of the information under consideration. Individuals are represented in open court by a lawyer of their choice. Special advocates are used to represent the interests of the individuals in closed sessions.

Finally, I know that a number of noble Lords will be concerned about the human rights impacts of the asset-freezing regime and will have noted the comments of some of the Supreme Court judges referring to the regime as “draconian” and designated persons as “prisoners of the state”. Again, these points were raised in the other place yesterday. I should stress that the Supreme Court did not make findings that the asset-freezing regime breached human rights. It quashed the orders because of the legal base. Given that the court did not make human rights findings, we should be careful not to take some individual comments in the judgment as representing definitive views of the court about the nature of the regime.

Some of the Supreme Court Justices expressed clear views that the orders were not disproportionate. The noble and learned Lord, Lord Brown, for instance, said:

“I am unimpressed by the alternative grounds on which the Order is challenged, those of certainty and proportionality. Primary legislation introducing this same asset-freezing regime could not have been declared incompatible on those grounds. It is only because the Order was plainly insufficiently mandated by the SCR 1373 that I would hold it invalid”.

The noble and learned Lord, Lord Mance, with whom the noble and learned Lord, Lord Phillips, agreed, said:

“I agree with the Court of Appeal’s reasoning and conclusion that the relevant provisions of articles 7 and 8 were and are sufficiently certain to be valid … I am at present also unpersuaded that the content of the Orders could be challenged on grounds of lack of proportionality, although I need express no final view about this. Combating terrorism, and the freezing of funds or resources which can be used for terrorist purposes, are undoubtedly matters of first importance”.

We take great care to ensure that the regime is proportionate.

As set out in the Written Statement that I laid before this House on Friday, central to this is our licensing regime. We make sure when we designate people that we immediately issue a legal aid licence so that people can receive legal aid, if eligible. We also immediately issue a licence to allow them to receive and use their state benefits without delay. We do not limit people only to basic expense. We impose licence conditions, but only conditions that are proportionate to ensuring that funds are not diverted to terrorism. As I announced on Friday, we no longer require spouses of designated persons to report to the Treasury on how they spend benefits money. That will help to minimise the impact that the regime has on spouses and families.

In closing, in these times of severe threat to our national security, we cannot afford to fail to take the necessary steps to prevent terrorists raising and using funds for purposes of terrorism. Without primary legislation of the kind before the House today, we will leave gaps in our defences which could be exploited by people who intend serious harm to the British public.

The Bill ensures that the proper safeguards we set out in the Terrorism Order 2009 will continue to apply. At the same time, the Bill will provide Parliament with the proper time needed to consider and debate the permanent legislation in full. I therefore commend the Bill to the House.

Before the noble Lord sits down, perhaps I may ask for information on one point which I do not entirely understand. He referred to £135,000 as having been frozen under the orders of 2001 and 2009, but am I not right in thinking that those orders have in fact been quashed? So at the moment, at any rate, they are quite safe. It is only the 2006 order that has been quashed, and that relates to £16,000 only, which has presumably now gone. Is that the right analysis?

I believe that the noble and learned Lord is correct, but that we can no longer depend on the other orders in the light of the Supreme Court’s decision. If, however, officials give me a more precise answer, I will of course make sure that I provide it to the House and to the noble and learned Lord in my closing speech.

My Lords, I thank the Minister for introducing this Bill. Let me say at the outset that these Benches support and have consistently supported the Government in helping to ensure that terrorists do not threaten the security of the UK or, indeed, of other nations. We have supported a bewildering array of anti-terrorism measures in the past decade and we will support the Bill before us today. However, in lending our support, we reiterate our call for a review of the totality of anti-terrorism legislation. This patchwork of legislation, not just for asset freezing, lacks clarity, and it is time that the Government moved beyond a piecemeal and reactive approach. We are committed to reviewing and consolidating national security-related legislation and to ensuring its compatibility with fundamental rights and freedoms.

Our support for anti-terrorism legislation is never unconditional. That legislation has to be proportionate, and inevitably there is a balance to be struck between the rights of individuals and the public interest, but Parliament is the right place for that balance to be determined. The Supreme Court decision handed down on 27 January made plain the impact on individuals affected by the various freezing orders covered by the Bill, and the Minister has quoted some of the words used in the Supreme Court: “draconian”, “drastic”, “burdensome”, “oppressive” and “prisoners of the state”. However, as the Supreme Court made clear, Parliament should have been involved in determining whether and how the rights of the individuals were to be protected under the orders. The Supreme Court was clear that it was for Parliament to determine.

When the United Nations Act 1946 was passed, it was in the context of a very different world from today. All of the orders made under that Act prior to 2001—and indeed a good number of those made subsequently—deal with sanctions against countries rather than individuals. I rather doubt that the 1946 Act, with its Order in Council process, would get through your Lordships’ House unamended today, possibly even if it were restricted only to sanctions against nation states.

In 2001, however, the Government decided to use the 1946 Act for the anti-terrorist measures mandated by the UN Security Council. The Treasury has some form in using legislation in a way for which it was not initially intended. We all recall that the Treasury surprised many people, including the Icelandic nation, when it used the asset-freezing powers of the Anti-terrorism, Crime and Security Act 2001 to freeze the assets of certain Icelandic banks.

The Treasury has never fully explained why it chose to use the 1946 Act rather than primary legislation which could have been processed through a fast-track procedure in 2001. The Written Ministerial Statement of 27 January, and the Minister today, referred to the Government acting,

“in good faith based on their belief that section 1 of the United Nations Act was an appropriate legal vehicle”.—[Official Report, Commons, 27/1/10; col. 54WS.]

Did it never occur to the Government that they had taken too much power to the Executive, to the detriment of those who were targeted by the orders? Did they never stop to think that Parliament ought to have been involved in the decisions? Did they not recognise the rights and liberties of the individuals who might be affected? If they had done so, the only logical conclusion to have drawn would have been that the balance between the interests of national security and those of individuals were best decided by Parliament and not by the Executive alone.

If it did not occur to the Government that they were acting inappropriately in 2001, did they not pause for thought when the Judicial Committee of the Privy Council, chaired by my noble friend Lord Newton of Braintree, highlighted in 2003 the human rights issues involved in asset freezing? Or perhaps when the Joint Committee on Human Rights issued its sixth report of the 2003-04 Session? Or even when New Zealand and Australia replaced their regulations with primary legislation? The Government have known since the High Court ruled against them in April 2008, after a legal challenge, that their use of the 1946 Act was vulnerable.

It is unattractive when the Executive try to take maximum power for themselves and then are prepared to go right through the courts to defend it. I cannot help but think that it would have been more responsible for the Government to recognise the force of the arguments in the High Court judgment that have now been endorsed by the Supreme Court, and to have brought forward primary legislation in 2008.

Would the noble Baroness kindly give way? I am most grateful. The point that she made about the decision of the High Court in April 2008 is perfectly valid. However, I am sure that she will accept that the Court of Appeal reversed the decision—I think unanimously—a few months later.

From memory, it was not a unanimous decision: there was criticism of some aspects of it. However, I accept that the Court of Appeal ruled in favour of the Government. My point is that the Government were on notice that they were vulnerable, but they chose to battle on through the courts rather than put the legislation on a more secure basis by involving Parliament. It should have been clear to the Government that Parliament had not been properly involved in the early decisions, and that the proper way forward was to bring legislation that would involve Parliament in the construction of the way in which individuals’ assets would be frozen. However, they stuck it out until the very end and lost in the Supreme Court. That made it inevitable that we would have emergency legislation. We are in this position because the Government failed to act.

The Government first informed us nearly two weeks ago that they intended to take through the legislation, which was published in draft form last week, on an expedited basis. The Bill would replace the orders under the 1946 Act with a dedicated Bill. Dates had been provisionally agreed that would have allowed both Houses to consider the Bill on a rapid but acceptable timescale. The plan was for the Bill to start in the other place today and for it to have been completed in your Lordships’ House, with Second Reading, Committee, Report and Third Reading taken over the first two weeks of March. However, once the Government heard that their application for a stay had been rejected by the Supreme Court, they abandoned that Bill and opted for the minimalist Bill before us today. They have dressed this up as the virtue of pre-legislative scrutiny; but they showed no interest whatever in extensive or pre-legislative scrutiny right up to the time that their stay application failed.

There is also a puzzle. The Government have asset-freezing powers in the Anti-terrorism, Crime and Security Act 2001, which the noble and learned Lord, Lord Hope, the Deputy President of the Supreme Court, said could have been used for the cases covered by the appeals. I believe that that legislation has been used only once, in the case of the Icelandic banks to which I referred earlier. The Government have not properly explained why they do not use that legislation for terrorist asset freezing; in what ways their view differs from that of the noble and learned Lord, Lord Hope; or, indeed, why a simple amendment to that Act could not give them the legislative cover that they need.

The Bill has a sunset date of 31 December 2010. It could have been managed perfectly well with a 31 March sunset. It would have been possible and, in our view, desirable if the longer Bill putting terrorist asset freezing onto a proper footing had stuck with the timetable that we had already agreed. We told the Government last week that we were ready and willing to do that in addition to dealing with this emergency Bill this week. The chairman of the Human Rights Committee said yesterday in another place that 31 March would have allowed his committee enough time to scrutinise the longer Bill. The Government are still running away from proper parliamentary scrutiny.

We believe that it is about time there was a debate in Parliament about the balance between the rights of those who are the subject of asset freezing and the needs of national security. We need to debate whether there should be some involvement by the courts in the designation orders themselves, by way of review or confirmation. We should examine why terrorist asset-freezing orders are more draconian than asset freezing for money laundering or criminal purposes, for example under the Serious Organised Crime and Police Act 2005, where the courts have a greater involvement.

We need to debate whether the appeal processes first set out in the Counter-Terrorism Act 2008 are appropriate. They are based solely on judicial review processes and remedies and so are heavily weighted in favour of the Executive. I disagree with the Minister's analysis of judicial review. It does not allow an examination of the merits of the case and it also does not allow, for example, for orders to be varied, which is important when dealing with licences for the use of financial resources. We need to debate the way in which the various offences are constructed and why some of them are restricted to situations where significant benefit is involved while others are not. We need to subject the information provisions to scrutiny and ensure that the privilege regarding self-incrimination is not damaged.

We have a long list of more detailed points which can be taken forward only in the context of a longer Bill. We are denied the opportunity to deal with those points because the Government have chosen the minimalist emergency legislation. All the points that I have mentioned are relevant to the minimalist Bill but they cannot be debated given the structure of the Bill and the timetable to which we are working. I know that the noble Baroness, Lady Hamwee, has tabled amendments for our Committee stage this evening, but I do not think that this short Bill is the right place for them.

Let me reiterate that we believe in a strong and effective regime which can minimise the threat posed by terrorism in whatever guise it appears. However, we are mindful of the need to accord those suspected of involvement in terrorism the sort of rights that a civilised and libertarian society accords its citizens. The Bill does not allow a proper consideration of those issues. We shall return to some of them when we reconvene later today for the Committee stage but we shall not debate them properly until there is a full Bill to scrutinise. I regret that the Government are denying Parliament that opportunity.

My Lords, the judgment of the Supreme Court established three principles which the House will wish to have well in mind during the course of this debate. First, the Supreme Court decided that the international obligations of this country under the UN resolution extend only to those persons who are involved in terrorism. Secondly, the Supreme Court explained that because the relevant orders purport to go much further and apply to those in respect of whom there are only reasonable grounds for suspecting their involvement in terrorism, the orders were not validly made under the United Nations Act 1946. Thirdly, the court emphasised the destructive effect of these orders on the lives of those affected and the consequent need for considerable care and attention in ensuring the legality of any order so made. Some of the language of the justices has already been quoted in this debate.

The undoubted urgency of this matter has meant that there has not been an adequate opportunity for your Lordships to reflect on the important issues raised by this Bill. There has also been no time for your Lordships’ Select Committee on the Constitution, of which I am a member, or for the Joint Committee on Human Rights to consider and to report on the major constitutional and human rights implications of this Bill.

No doubt we have no choice but to accept this Bill. However, we should record and we should regret that we are in this difficult position because of the Government’s failure to heed earlier warnings that they were acting unlawfully in relation to these measures to combat terrorism. This Government have a very poor record of ignoring advice that their measures relating to terrorism are unlawful—detention in Belmarsh, control orders, stop-and-search powers and now the freezing of assets. I declare an interest as counsel in some of the litigation in relation to these matters. If the Government were to listen more carefully and with, if I may say so, a little more humility to bodies such as the Joint Committee on Human Rights and the organisations, JUSTICE and Liberty, for example, the Government would not need to come before this House today and ask for help in clearing up the mess that they have created.

I hope I am not the only noble Lord for whom the constitutional principles set out by the Supreme Court matter. I hope I am not the only noble Lord who is most reluctant to wave a magic wand over these measures to validate, even temporarily, what is otherwise constitutionally objectionable. It is ironic indeed that when the Supreme Court has found these orders to be invalid because of the absence of parliamentary debate and parliamentary approval we are now asked to negate that invalidity by a procedure which allows for the most limited debate in Parliament. Like the noble Baroness, Lady Noakes, I am concerned that the Government prefer orders rather than primary legislation precisely because they do not value debate on these important matters. We will need reluctantly to approve a temporary measure, but all its provisions must be scrutinised most carefully in Committee to ensure that they are necessary and proportionate.

Noble Lords will not dispute the need to validate freezing orders against people who have been found to be involved in terrorism. Noble Lords will also accept the need to validate such orders against people who the Secretary of State believes, on reasonable grounds, to be involved in terrorism. As the Minister rightly said, of course freezing orders must be available against people who have not yet been convicted for terrorism. But the orders go much further: they impose restraints on people merely because there are reasonable grounds for suspecting that they are involved in terrorism. That is unacceptable, especially as the United Nations resolution imposes no such obligation.

The noble and learned Lord, Lord Brown of Eaton-under-Heywood, in his judgment in the Supreme Court, said at paragraph 199:

“To suspect something to be so is by no means to believe it to be so. It is to believe only that it may be so”.

The House should not be asked to fast-track legislation that will have a destructive effect on the lives of people without the Minister being able even to say that he believes on reasonable grounds that the persons concerned are involved in terrorism.

Perhaps I may also ask the Minister about the retrospective effect of the Bill. He mentioned that Clause 2 has a retrospective effect, back to 4 February, to protect the interests of the banks. However, as I understand it, the Bill has no retrospective effect for the period before 4 February. That means, I assume, that someone whose funds were frozen last year and who asked the bank to release the funds on 27 January—the date when the Supreme Court handed down its substantive judgment—would have a good claim against the bank for damages. Will the Minister please clarify whether my understanding is correct, because I do not understand the point in distinguishing in this temporary Bill between what occurred on 3 February and what occurred on 4 February?

I also suggest that 31 July 2010 would be a much more appropriate date for the termination of this legislation, even allowing for the intervention of a general election. The date of 31 December in Clause 1 gives a strong impression to your Lordships that the Government are content to rush through this Bill and then relax, with the pressure off, rather than, as should be the case, ensuring that the substantive measures receive full debate as soon as possible.

Later today, the House will of course approve the Bill. But I ask noble Lords to remember the wise words of Mr Justice Frankfurter in the United States Supreme Court in 1950, that,

“the safeguards of liberty have frequently been forged in controversies involving not very nice people”—

or, in the context of this Bill, people who the Secretary of State has reasonable grounds for suspecting to be not very nice.

The noble Lord is obviously more familiar with the judgment than I am, but am I right in thinking that the noble and learned Lord, Lord Brown, was the only one of their Lordships to take the point about the difference between suspecting and believing? I think he was alone.

Other justices took the same point. Indeed, it was fundamental to the judgment because the United Nations resolution did not allow for action against those who were merely suspected of being involved in terrorism. Therefore, the United Nations Act was not a lawful instrument for the making of the orders.

My Lords, we are faced with a difficult situation, as the noble Lords, Lord Pannick and Lord Myners, said. I would like to express my appreciation of the way in which the noble Lord, Lord Myners, introduced the Bill, and of the difficult situation in which the Government find themselves. There is no doubt that statutory instruments are extremely useful if you wish to do something quickly. The speed with which the legislation was introduced after the Security Council resolutions were passed is commendable. The problem with legislation that proceeds in that way is that it is by no means as secure as primary legislation. Indeed, primary legislation in our country is so secure that no court can overturn it, except possibly the court in Luxembourg in cases where it is supposed to contravene European law.

The important difference is between primary legislation and secondary legislation. As the noble Lord, Lord Pannick, said—I shall not repeat what he said on this point—the Supreme Court decided unanimously that the two orders that it quashed went beyond the empowerment that the United Nations Act 1946 gave for the purpose of implementing United Nations Security Council resolutions because the reasonable suspicion basis was not included in that resolution.

That has another effect. So far as I know, the United Nations has not found it necessary to pass resolutions requiring member states to introduce legislation dealing with people against whom there is only reasonable suspicion, so these orders were without the authority of a United Nations Security Council resolution. That does not mean that, after a broad and careful assessment of the situation, the Government might not think that, because of our special circumstances, it was necessary to have legislation that went beyond the United Nations resolutions. I think I am right in saying that New Zealand and Australia took the view that that was necessary and passed primary legislation. We did not do that and have stayed with secondary legislation that enables one to take action very quickly but in which, in this case, Parliament was not involved because there was no need for a negative or affirmation resolution procedure.

The difficulty with that is that the legislation is nothing like as secure as primary legislation, and in due course the Supreme Court, having examined this with considerable care, came to the conclusion that these orders were beyond the powers conferred by the Act of 1946 and therefore should be quashed. That has the effect of making them null and void from the time they were originally passed. They have no authority whatsoever.

This was a situation of very grave difficulty for the Government if, as I assume, they believed that there was a serious risk to this country arising from people against whom they had no more than a reasonable suspicion. On that basis, it was necessary to take immediate action. My original thought, when I read of this occurrence, was that we have a range of anti-terrorism legislation which has been passed by Parliament over a number of years. It is quite a patchwork. Therefore, I wondered why it would not be possible to resort to one or other of these pieces of legislation to deal with this sudden difficulty. The answer to that is contained in the speech that the Exchequer Secretary made to the other place yesterday. She said:

“Let me deal with a point raised by the hon. Member for Twickenham”—

that is Dr Cable of the Liberal Democrats—

“Why do we not use other existing counter-terrorism legislation? It has been suggested that counter-terrorism legislation is already in place, and that we should use those powers rather than introducing asset freezing. We have a comprehensive framework to counter financing of terrorism, but none of the other legislation replicates the effects of the asset-freezing regime under the terrorism orders in its preventive nature and in its ability to restrict suspected terrorists' access to the financial system. Furthermore, no other legislation contains such a comprehensive range of prohibitions on third parties' making funds available to terrorist suspects, such prohibitions being essential to preventing terrorists from circumventing the restrictions and accessing funds.”—[Official Report, Commons, 8/2/10; cols. 697-98.]

That immediately shows that there was a huge hole in the primary legislation system for dealing with terrorism on the basis of the nature of the threats which the Government believe to exist.

We are going to deal with this today on the basis of this Bill, but I would venture to humbly suggest to the Government, and to any other Government who may have responsibility in the future, that it is vital that the counterterrorism legislation, which is important, should be primary legislation, even if one has to take secondary legislation in order to get quick action. It should be followed up by primary legislation.

Secondly, it is amazing, looking at the patchwork of counterterrorism legislation that we have had, that it was not appreciated that this risk existed. I can understand that we are all fallible—at least, that is the general view—and that this kind of loophole or difficulty may be overlooked. However, it is extremely important, in the light of what has happened, that the whole pattern of counterterrorism legislation should be examined to see that, in all its aspects, it is reasonably secure and fit for purpose in what is a fundamental protection for our citizens.

The Bill is temporary—there is argument about how temporary it should be—and the Government have indicated that they will replace it with primary legislation. I venture to think that that would be a superb opportunity for considering the whole range of anti-terrorism legislation, which has been introduced piecemeal, so that we have a comprehensive system that will work in all circumstances, so far as we can see. As my noble friend Lord King has noted, there is a rather difficult grey area between terrorism and serious crime, and the provisions for seizing assets from serious crime are extremely complicated, as I think anyone who has tried to operate them will agree. I know that the Government have other work to do, but this may be a good opportunity to consider whether these two systems could profitably be linked together.

My Lords, I start on a positive note by thanking the Government for keeping these Benches informed at the end of last week of what they were proposing—not, of course, that we on these Benches would have started from here—and for the command paper with the draft full Bill, which has provided some material for amendments, which we will discuss later. I should say to the noble Baroness, Lady Noakes, that some of them are relevant for now.

Like the noble and learned Lord, Lord Mackay, I very much appreciated the Minister’s introduction, although I would have appreciated it even more if I had been able to take it away and read it before responding to it. However, here end the compliments.

I put on record our thanks to JUSTICE and Liberty for their briefings. Second-hand compliments are often the most credible. One of my colleagues who questioned me about the Bill yesterday had read the briefing material as soon as it arrived, and the organisations should take that as a compliment.

Nothing that is said from these Benches should be taken as our opposing proper measures to stop funding getting to terrorist groups or as our resisting our international obligations. However, we detect the Government’s air of panic to which other noble Lords have referred. We, too, asked: why such a rush? The judgment was made at the end of last month, and a supplementary judgment was made when the Supreme Court refused to grant a stay on 4 February, but the case did not start this year. I accept that the High Court order to quash the relevant orders was superseded by the Court of Appeal, but it was made in April 2008, so the Government were clearly on notice, as the noble Baroness put it, of the issue, and, as the noble Lord, Lord Pannick, said, they have failed to heed warnings for a considerable period.

In the Supreme Court judgment, the noble and learned Lord, Lord Mance, expressed,

“concern about the development and continuation over the years of a patchwork”—

a word used by noble Lords this afternoon—

“of over-lapping anti-terrorism measures, some receiving Parliamentary scrutiny, others simply the result of executive action”.

As noble Lords have said, we have had a great deal of terrorism legislation and criminal, serious organised crime legislation. Speaking as a lay person in this, I find it difficult to believe that terrorism is not serious organised crime.

If the Acts of 2000 and 2001, which were used against the Icelandic banks, and 2008 did not cover the issue—the Government take that view but there is a dispute about this—why did they not make them? Even if the Government thought that Orders in Council were adequate, such important provisions, with such an impact, should have been brought into primary legislation. I follow the noble and learned Lord, although not as eloquently or no doubt as technically correct, in saying that the answer is not that an Order in Council is the usual way to go. Later today, there will be amendments from these Benches to seek to apply some existing primary legislation for the interim period.

As has been said, only small sums are currently frozen. Although I accept that it is not necessarily expensive to carry out an act of terrorism, the issue of proportionality obviously arises. It is right to protect the banks which are caught in the middle. But if an individual who is subject to freezing took proceedings to get his money back, it would not be dealt with overnight. That would, in effect, allow a little more time for the Government to take this in a rather more measured way. In any event—I think that I read this in the same way as the noble Lord, Lord Pannick—the rights of individuals against the Treasury are preserved. Taking legislation a little more slowly would simply extend by a small amount the period in respect of which an individual might claim. Having made that point, I welcome the fact that those rights are preserved.

We are unpersuaded of the need for emergency—or, as it is now perhaps a little euphemistically known, fast-track—legislation. But the House of Commons passed this Bill and it is clear that by tomorrow morning we will have a new Act of Parliament; so I do not want to spend much more time on this aspect.

The Government have been hauled over the coals by the Supreme Court for bypassing Parliament and now the use of emergency legislation is sought to overturn that judgment. Much as we might object to this, our task is to make the legislation more palatable. I hope that our amendments will help to achieve that end.

I said that it was right to protect the banks which have been caught in the middle. But that is not as important as protecting the citizens in the face of disproportionate interference with their human rights in ways not required by the UN resolutions. The terms “remorseless”, “devastating”, “draconian” and “paralysing” are used to describe the conditions imposed on those who are merely suspected—these are the Supreme Court’s adjectives and have been used by other noble Lords today. No evidence is required and there is no possibility of judicial challenge.

It is important that permanent legislation is scrutinised thoroughly. We would support pre-legislative scrutiny perhaps by a Joint Committee of the two Houses or some other bespoke procedure. There is no reason why one should not design a procedure for this unusual circumstance. But it is far from clear that, even with a general election intervening, it is necessary to wait for as long as the end of this year. It certainly is clear that the asset-freezing regime to which an individual is made subject should itself be subject to supervision by the courts. Such orders should not just be made by the Executive. To quote the noble and learned Lord, Lord Mance, again, he said that the wording of UN resolution 1373,

“does not suggest that the Security Council had in mind ‘reasonable suspicion’ as a sufficient basis for an indefinite freeze”.

The 2001 Act has the test of “reasonable belief”. However, the Government come nowhere near evidence in the Bill, although I heard what the Minister had to say. Furthermore, promoting a Bill with no judicial oversight when a person is designated and no appeal—in other words, no judicial oversight at the beginning and no appeal at the end—and no appeal in respect of the licence terms that might apply is something that we find offensive; that would not be the wrong word. The Minister referred to judicial review and said, I think, that it was not a light touch. I believe that it is the wrong touch for this situation. It is about process and as described it accepts the premise on which the original order was made. That of course is one of the matters about which we complain.

It is of great importance that the orders are themselves proportionate, but their impact has been described as “very burdensome” on all members of the designated person’s family. The impact on normal family life is remorseless and can be devastating. Noble Lords have heard of some of the restrictions. The wife of one respondent could not even receive welfare benefits until the regime was relaxed. It was what amounted to an invasion of privacy of a wife who was not a listed person. Solicitors have reported to the Supreme Court the break-up of the marriages of some of the individuals concerned. Although the Minister covered some of this in his opening speech, I want to ask particularly about what is routinely licensed. What is the approach and how are the needs of the whole family assessed? Indeed, how are their representations heard? Incorporating some sort of minimal level would be right, and I would say too that it goes against every principle that the actions of providing money to fund a challenge to an order or legally to represent a designated person should be an offence. That is itself offensive. The noble Lord mentioned legal aid. I am a little perplexed because it is difficult to imagine that someone subject to one of these orders would have the funds not to require legal aid. As we have seen in the draft longer Bill, the Government consider that periodic reports from the Treasury and an independent review of the process would be proper, so why not import those here?

This is an emergency largely of the Government’s own making. The Minister referred to human rights legislation and has made a statement under the Human Rights Act that the Bill complies with the Act. Can he confirm that it complies only because the Human Rights Act and the European Convention on Human Rights do not apply? The UN charter trumps them both. As I understand it, the Supreme Court thought that as the Al-Jedda case is still continuing, that precluded it from considering the human rights position. The Minister quoted the noble and learned Lord, Lord Mance, who said that he was not taking a final view.

It is with the greatest reluctance that we see before us legislation that amounts to control orders by another name. Liberal Democrats in the Commons made it clear what they thought by voting against Clause 1— the guts of the Bill. We will do our best later today to ensure that the legislation that emerges is appropriate and not excessive. I can certainly assure the noble Lord, Lord Pannick, that no magic wand will be waved from these Benches.

My Lords, I apologise for not being here for the first part of the debate, but I was taking part in important discussions in the Joint Committee on Human Rights appertaining to another issue, and I had to be there. As has just been mentioned by the noble Baroness, Lady Hamwee, the noble Lord, Lord Myners, states on the front of the Bill that nothing in the Bill is incompatible with the European Convention on Human Rights. How do the Government know that? The noble and learned Lord, Lord Hope of Craighead, suggested that the JCHR could have looked at it, but we have not looked at it. For the Government to say that the legislation is compatible with the ECHR without even subjecting it to parliamentary scrutiny is, I regret to say, fairly disgraceful. Obviously the Bill has got to go through, but with my human rights hat on, I must raise the strongest objection to how it is being done. This rush and panic reflect the Government’s track record of totally disregarding the liberties of the subject, about which some of us feel very strongly.

My Lords, this has been a stimulating debate, one that I approached with considerable trepidation given the contribution we could expect from Members of the House with great experience in matters of the law.

As the whole House recognises, the threat to the UK today from international terrorism is very real and significant. Terrorists need financing to be able to carry out attacks, the costs of which, as we have seen, do not have to be great. Terrorists also need financing to maintain their infrastructure; for training, equipment and recruitment, and to promote their ideology. The capabilities of terrorist groups are severely constrained without access to funds.

The asset-freezing regime, implemented in good faith under Orders in Council, has proved over the years to be a valuable tool for disrupting and preventing terrorist financing. The Supreme Court ruled that the Terrorism (United Nations Measures) Order 2006 and the Al-Qaida and Taliban (United Nations Measures) Order 2006, implemented in good faith, were beyond the scope of the power provided by Section 1 of the United Nations Act 1946 and quashed both orders. This had effect from 4 February.

National security and public protection continue to be an absolute priority for the Government. Our aim is to prevent a gap in the asset-freezing regime and ensure that suspected terrorist funds cannot be diverted and used for terrorist purposes, and that suspected terrorists do not get free access to the UK’s financial system.

That is why this legislation is being moved today. We considered it necessary to the UK’s national security to act swiftly to restore the asset freezing on a temporary basis under primary legislation, while we introduce permanent legislation with time for Parliament to fully scrutinise our proposals in great detail.

I welcome the many points made by Members of the House. I will deal first with the points raised by the noble Baroness, Lady Noakes. The noble Baroness kindly offered support for the intention of the legislation, and we welcome and greatly appreciate that. At the same time, the noble Baroness quite correctly lost no opportunity to point out what she regarded as the Government’s failings, which led us to have to introduce this legislation on a fast-track basis. No doubt there were warnings which could have led many to believe that primary legislation should have been introduced from 2001. The noble Baroness referred to the work produced by the noble Lord, Lord Newton, in 2003 in that respect; and also, as the noble and learned Lord, Lord Mackay of Clashfern, referred to, the actions taken in primary legislation in New Zealand and Australia.

However, I remind your Lordships’ House that the Government were acting in good faith and under advice that it was correct and proper to rely on Section 1 of the United Nations Act 1946. We cannot rush to Parliament every time a piece of legislation goes through some form of court challenge, certainly not in a situation where the Court of Appeal found in favour of the line that the Government had taken. However, the judgment from the Supreme Court required us to take the necessary action to protect the country and our people from the risk of terrorism facilitated by the use of financial assets and access to the financial system, while at the same time putting in place detailed legislation that can be subject to intensive scrutiny as it makes its way through the House.

The noble Baroness is correct in observing that the decision of the Supreme Court to reject a stay in respect of its decision led us to require urgent action. The Supreme Court in its judgment directs us towards the need for fairer scrutiny, which is precisely what we are going to achieve by the process of putting forward two pieces of primary legislation—one to be adopted through the fast-track mechanism and the other through the very detailed scrutiny that this House and others will apply to the legislation, as we wrestle with reconciling the need to preserve security against the risk of terrorism while not encroaching unreasonably or disproportionately on individual freedom and rights, which we regard as of the highest possible importance. The noble Baroness in her various questions demonstrated why we need a very serious debate and scrutiny of the permanent legislation, which is precisely what we plan to ensure.

The noble Lord, Lord Pannick, referred to the undoubted urgency to validate orders and asked why the Joint Committee on Human Rights and the Constitution Committee had been circumvented. The House will be aware that the answer is simply the lack of time. The Bill was introduced only on Friday, and the Joint Committee on Human Rights does not meet until tomorrow, and the same applies to the Constitution Committee. Both committees will have a very full role to play in scrutinising our permanent Bill, and we very much welcome that.

The noble Baroness asked why we were not using the Anti-terrorism, Crime and Security Act 2001. The answer was provided largely from her own Benches by the intervention from the noble and learned Lord, Lord Mackay of Clashfern, in referring to the answer given in the other place yesterday by the Exchequer Secretary to Dr Cable. I might respond also to another point that the noble and learned Lord, Lord Mackay, made, relating to what he described as the patchwork of legislation. There is much to commend his observation that we should at an appropriate moment review the myriad pieces of legislation which deal with terrorism—to go back to the earlier intervention in my opening speech from the noble Lord, Lord King—to satisfy ourselves that the interface with other forms of legislation, particularly those relating to serious organised crime, is looked at in its totality to ensure that they are comprehensive and complete and that there are no inconsistencies or gaps. I have had the opportunity already to discuss this matter with my noble and learned friend the Attorney-General. It is a matter on which we will no doubt reflect—but we can rest assured without any doubt that the permanent legislation that we propose to follow this temporary Bill will receive very close scrutiny.

The noble Baroness asked why we did not simply amend the Anti-terrorism, Crime and Security Act 2001. The Act covers a wide range of threats but is primarily aimed at countering threats from overseas and is framed appropriately. Amending it to allow for a meaningful terrorist asset-freezing regime that could be used to tackle threats within the UK would substantially change the nature of the Act, and we judge that this would not be an efficient way of addressing our particular concerns.

I will go back to answer some more points made by the noble Lord, Lord Pannick. He expressed concern about the speed with which the Bill is being rushed through. I fully sympathise with his comments, and I think everybody on the government Benches and elsewhere in the House would rather we never had to use fast-track processes. However, the House also recognises that this is not necessarily a case, as the noble Baroness, Lady Hamwee, suggested, of a hint of panic; rather we are acting expeditiously and with appropriate urgency in the light of developments. We are not, of course, asking noble Lords to accept permanent asset-freezing legislation on such a fast-track basis. This Bill simply restores the existing regime for a temporary period to provide time for Parliament to consider permanent legislation more fully.

Concern was also raised about our use of reasonable suspicion tests, and whether this exceeds our international obligations under United Nations Security Council Resolution 1373. I accept that UNSCR 1373 does not spell out precisely that action should be taken on the basis of reasonable suspicion. However, it is clearly intended to be preventive, and the international Financial Action Task Force has made it clear that, in its reasonable view, suspicion is a proper standard for implementing UNSCR 1373. I suggest to your Lordships’ House that this is also an area where one operates within the framework of UN thinking but according to the particular circumstances as they are perceived to apply in one’s own territory. I am afraid we know from very painful and tragic experience that the United Kingdom is a country in which the threat of terrorism is particularly pronounced, as indicated by my right honourable friend’s decision recently to raise the security level. That ability to form a judgment as to the particular circumstances that will apply to our situation in this country, within the framework of 1373, is a reasonable way of proceeding.

The noble Lord, Lord Pannick, also said that he was a little puzzled as to why Clause 2 gives retrospection to the banks only back to 4 February, and raised the question of what would happen if banks were to be sued for having maintained frozen accounts on 27 January, after the first Supreme Court judgment. We believe that retrospection should be used only where absolutely necessary, especially in a fast-track Bill. The reason we do not provide banks with retrospective cover predating 4 February in this Bill is that the Supreme Court judgment did not take effect until 4 February. Prior to that date, the banks were therefore in a position where they could reasonably argue that they properly thought they had a valid legal base to freeze terrorist assets. The noble Lord also expressed concerns about why we—

I hear what the Minister says on retrospection. Am I right in thinking, as the noble and learned Lord, Lord Mackay, indicated, that as a result of the Supreme Court decision, these orders have been null ab initio—from the very beginning? Therefore, previously, if a person failed to comply with a prohibition or obligation—prior to 27 January, for example—they might have been guilty of a crime. However, is the Minister saying that no crime will have been committed if a person failed to comply with a prohibition or obligation under these orders prior to 4 February, or even 27 January?

I thank the noble Lord, Lord Wallace, for his intervention. I will no doubt reflect on that question while I complete my answers to the noble Lord, Lord Pannick. With assistance, I might provide him with the accurate and precise answer that his question justifies, and which I know that he would expect. As I think I said, we abhor retrospection—particularly in a fast-track Bill—and would only seek to use it where we believed that the arguments for so doing were compelling.

The noble Lord, Lord Pannick, also raised the issue of the length of the sunset clause. The noble Baroness, Lady Hamwee, also mentioned that, and preferences were expressed for an earlier date. That will no doubt receive our attention during the Committee stage, if noble Lords so wish. We believe that 31 December is the right deadline to allow sufficient time for pre-legislative and parliamentary scrutiny. We also believe that our existing regime is tried, tested and fit for purpose, that it has appropriate human rights safeguards already in place, and that it can reasonably continue in operation until the end of the year and until we are able to introduce permanent legislation.

As I am sure the noble Lord, Lord Pannick, would appreciate, 31 December is the absolute deadline. We will seek to bring this legislation forward and to have it debated by the House—and passed into legislation, if that is the wish of Parliament—well before 31 December. As must already be clear from this excellent Second Reading debate, there are significant issues that will require debate when we come to the substantive measure.

I am very grateful for that response, but can the Minister give us any indication of when proceedings will commence on the substantive Bill either in this House or in the other place? Does he have a date for the Second Reading?

I do not have a date for Second Reading now, but I will certainly use my good offices to encourage that it is brought forward as soon as possible and as soon as it is compatible with good pre-legislative scrutiny. As the details of the Bill are already available, that scrutiny process has already commenced within an informal structure. Having reflected carefully on the question from the noble Lord, Lord Wallace, I can now advise him and the House that the orders are void. There are therefore no offences to prosecute; and, in any event, no prosecutions have been brought. I trust that that answers his question.

I thought that there was an old convention in this House that nobody should seek to anticipate the Queen’s Speech. With respect to the Minister’s response to the noble Lord, Lord Pannick, he seemed to be anticipating somebody else’s Queen’s Speech.

The parliamentary experience of the noble Lord, Lord King, once again shines forth for the benefit of the whole House, and my own inexperience is visible to all. However, I think that I said words to the effect of, “if it were left to me” or, “I would use my own efforts”. Far be it for someone as humble as me to anticipate the content of the Queen’s Speech. I am grateful to the noble Lord for correcting me if I seemed presumptious in that respect.

The noble Baroness, Lady Hamwee, made a very thoughtful contribution. I am sure that we will see much more of the logic behind her arguments displayed in Committee. In my opening comments I endeavoured to address some of the issues that will be raised by the amendments, but no doubt she will reflect on whether I have provided an adequate response or whether she still wishes those amendments to be placed before the Committee. I heard what she said about judicial review but I emphasise that it is not a light touch. It is a serious challenge and we should not disregard its powerful protection against abuse of privilege by the Executive.

The noble Baroness, Lady Hamwee, asked about the basis of individual need. The Treasury carefully evaluates, and it has certainly sought to ensure that its understanding of the needs of individuals is properly taken into consideration in the permitted licensing arrangements.

I go back to the question raised by the noble and learned Lord, Lord Lloyd of Berwick, in respect of the amounts of money frozen. The 2006 order was quashed on 4 February. The 2001 and 2009 orders are still in force but are at risk of being quashed on the same grounds as the 2006 order. As regards frozen funds, all £150,000 remains frozen; £135,000 under the 2001 and 2009 orders, because they remain in force, and £16,500 under the 2006 order because we are giving the banks retrospective legal cover in this Bill.

The noble Baroness, Lady Hamwee, also asked about a Section 19 statement based on the ECHR not applying. I advise her that we do not rely on the al-Jedda judgment. As regards Section 19 certification, we believe that the Bill is fully compliant with human rights requirements. I re-emphasise that I absolutely agree with the noble and learned Lord, Lord Mackay of Clashfern, about the importance of primary legislation. With hindsight, we wish that we had not relied on the powers in the United Nations Act 1946, but we are now somewhat belatedly seeking to rectify that with primary legislation.

I think that I have covered most of the points raised. I must emphasise again that these are times of severe threat to our national security. We cannot afford to fail to take the necessary steps to prevent terrorists raising and using funds for terrorist purposes. Without the primary legislation before this House, we would leave gaps in our defences which people who intend serious harm to the British public would be able to exploit. At the same time, the Bill will provide Parliament with the time needed to consider and debate the permanent legislation in full. I therefore commend the Bill to the House.

We tabled this probing amendment to ask the Government for reassurance about the operation of the public sector equality duty in relation to small organisations. Our amendment would provide an exception to the public sector equality duty, which would mean that any public authority, or a non-public authority that had been subcontracted to carry out functions of behalf of a public authority, should not be subject to the public sector equality duty if it employed fewer than 250 people.

Research carried out by the Government to analyse the functions of the public sector equality duty and its impact was carried out predominantly on large organisations. Research to support extending the duty to other protected characteristics was based on research by Schneider-Ross Ltd. Most of the respondents in that case were large organisations. Some 30 per cent of the 174 organisations that replied to the survey employed between 1,000 and 4,999 people. Only 2 per cent employed fewer than 150 people. Has any further or alternative research been undertaken that concentrates more fully on small businesses?

Concerns have been expressed to us that the public sector equality duty may be too onerous on businesses with fewer than 250 employees and that no information has been provided to suggest otherwise. Without any such reassuring information, it is perhaps premature to saddle smaller businesses with this burden until further research has been undertaken. This is a particularly pertinent question because, if the organisations subject to gender pay gap reporting are only those with more than 250 employees, might that not make sense in this case as well?

A second concern is the potential lack of clarity in this area. We have been informed that Section 6(3) of the Human Rights Act 1998 states that a person may be defined as a public authority for exercising public functions. Would that mean, therefore, that a single person could be classed as having to abide by the public sector equality duty? Certain groups are worried because, as the Bill stands, it is unclear exactly to whom the public sector equality duty would apply.

I have another question about smaller organisations that have had public functions outsourced to them. We covered most of this in a debate on a previous day and I will not go over those arguments. However, will the Minister confirm that if public functions are outsourced to a small charity—for example, one based on religious principles—the employment exceptions in paragraph 3 of Schedule 9 would still apply? In other words, will the charity continue to function under the terms of its foundation charter even though it would be performing a service on behalf of a secular public authority? Will the Minister clarify where the terms of a charity's foundation charter would apply and where they would not? If a public sector authority has outsourced some of its functions, in terms of those functions, will the public sector authority duty or the charity’s foundation charter have pre-eminence?

Finally, there is a question to be asked about organisations where jobs cannot be neatly segregated into those that would be tied into the public sector equality duty and those that would come under the private functions of a small organisation. For example, if a small care home operates under a Christian ethos, would that care home have a right to demand that staff were of the same religion? Moreover, if the care home also had some of the public care provision outsourced to it, under the terms of the public sector equality duty would it be able to ask for all staff to be of the same religion? I ask this because in such organisations it would not be possible to separate the roles into those which clearly came under the new equality duty, and those which remained under the small, private organisation. I see the Minister looking confused, and we are confused, but these are genuine concerns which have been raised with us, so I look forward to her response and hope she can shed some light in this area. I beg to move.

My Lords, this amendment, I am sorry to have to say, is regressive. It would exempt from Clause 148 any public authority with fewer than 250 employees.

The Race Relations (Amendment) Act 2000, made in the wake of the recommendations of the Stephen Lawrence inquiry, introduced general statutory duties on scheduled public authorities which apply irrespective of the number of employees within their workforce. That is in respect of race. So did the Disability Discrimination Act 2005, supported by the Conservative Party.

The Equality Act 2006 introduced similar public sector duties as regards sex discrimination which apply irrespective of the size of the public authority. The fair employment amendment Act of 1989, introduced by the Thatcher Administration to combat religious discrimination in the workplace, contained no such exception for public authorities with fewer than 250 employees. That is why the amendment is regressive. It is going back on the whole of that—race, religion, with regard to Northern Ireland here, with regard to gender, with regard to disability.

We know of no evidence to support the amendment, nor do we understand why Her Majesty’s Official Opposition should seek to weaken the scope of the public sector duty and the protection it gives to vulnerable minorities, including women, ethnic minorities, disabled people, religious minorities, gays and lesbians and the elderly, and we are opposed to it.

Could I add my voice in opposing this amendment, and to agree with the noble Lord, Lord Lester? For example, whether a care home is under a religious foundation’s auspices or not, it would be totally unrealistic to restrict those staff who actually do the caring to people of a particular faith, race or anything else, because they just would not work any more. It would be totally contrary to the aims of the Equality Bill.

I fail to understand why the figure 250 has been picked. What matters is that people are not discriminated against either overtly or covertly and it does not matter whether the employees are five, 20, 100 or 1,000. Discrimination is discrimination, so I am surprised by the number. It may sound interesting, but mathematical calculations in a Bill such as this are never helpful. I do not understand why the figure has been asserted, and if, as the provision says, a public authority has a public duty, I do not understand why mathematics is beginning to come into it. Maybe I need to go back to primary school and then I will know that 250 is the level at which it is impossible to discriminate.

My Lords, I would like to interject briefly, as this issue has been worrying me a lot because I knew it was buried somewhere in the Bill. If I have understood the amendment correctly, it is about procurement and where it is in the supply chain. Already small and medium-sized businesses have a huge problem in getting business and contracts from government bodies. There are a lot of barriers in their way, and a lot of contractual obstacles are put in their path. SMEs employ about half the non-public sector workforce in this country. They are very large employers. Most are tiny companies employing five people or fewer, but some are larger companies. Innovation and growth in the economy come from the SME sector: they do not come from large companies, which tend to rationalise and downsize. Therefore, future pensions will be paid by these companies. In some areas, the local authority is almost the only employer. Therefore, there is a huge problem if people cannot do business with the local authority.

My Lords, I will say briefly that I, too, strongly agree with the noble Lord, Lord Lester, and with my noble friend. If I am picking up the vibes correctly, the Minister may be able to answer the query. It may be thought that small charitable bodies that might be asked to undertake work via a public authority would run into a problem because of this. From reading the Bill, I cannot see that. However, I will leave it to those who have more detailed knowledge. I am not in favour of this amendment.

My Lords, I will say briefly from these Benches that I strongly support what the noble Lord, Lord Lester, said in opposition to the amendment. Many people in this country are employed in small companies, as has already been indicated. The Bill is about individual rights as much as anything. If an amendment of this kind, with this sort of arrangement, were to be on the statute book, a large number of people would not have the benefit of employment rights of any kind. That would be totally unacceptable. I understand that in some instances it may be felt that very small companies may have problems, but one cannot have a situation in which 250 people—quite a high number—do not have access to the employment rights that other people have.

Perhaps I may respectfully correct one matter. This does not limit the scope of the non-discrimination provision, from which there are no small-employer exemptions, thank goodness. It limits the scope of the public sector duty, which is very serious for reasons that are clear. It would not be fair to the Opposition to say that they are seeking to emasculate individual discrimination provisions. They are seeking to weaken the public sector duty.

My Lords, Amendment 114ZA, tabled by the noble Baronesses, Lady Warsi and Lady Morris of Bolton, would exclude from the equality duty public authorities with fewer than 250 employees, or organisations discharging public functions but not listed in Schedule 19 that have fewer than 250 employees.

Despite the progress that we have made, inequality persists in our society. The equality duty is an innovative approach to tackling discrimination. It requires public authorities to show leadership in proactively rooting out entrenched systems of discrimination and in promoting equality of opportunity. The roles of the public sector and of the bodies that provide public services are central to our equality goals, as public services are used by all, with many of the most vulnerable citizens dependent on them.

The noble Earl, Lord Erroll, probably wished to speak to Amendment 115B, which concerns procurement. The noble Baroness, Lady Morris, asked about the impact on SMEs and what further research had been done. I do not know, but I will come back to her in writing.

The equality duty requires public bodies and other organisations which provide public services to have due regard to the need to eliminate discrimination, to advance equality of opportunity and to foster good relations. It is difficult to understand why the size of an organisation should matter in considering the need to eliminate discrimination and promote equality. I think I am at one with the most reverend Primate on this. A number of small organisations provide services that could impact the lives of many in the community. For instance, at times, some of the health service bodies will have fewer than 50 employees but the service that they provide could have an impact on hundreds of people in the area. The same could be said for many schools.

I understand that in the current fiscal climate some people think that compliance with the new integrated equality duty could lead to extra administrative burdens and bureaucracy. I do not think that is the case because, as the noble Lord, Lord Lester, informed us, at the moment we have three different duties, each with different requirements and reporting timescales. Bringing them together into one duty should decrease bureaucracy, and our emphasis on specific duties on proportionality—outcomes rather than processes—should lead to less form-filling and increased results.

The exclusion of public authorities, listed in Schedule 19, which have fewer than 250 staff, or of private organisations that are discharging public functions but have fewer than 250 staff, would seriously limit the coverage of the equality duty. For instance, the amendment would exclude around 70 per cent of all central and local government bodies from the equality duty and that is plainly wrong.

I accept that the amendment is probing but, should it be passed, it would seriously damage the good progress made by the current duties, as it would exempt from the new duty hundreds of public bodies which are subject to the current duties, and would result in serious regression.

The noble Baroness, Lady Morris, asked whether the charity foundation document or the equality duty would take precedence where a public body contracts out some of its functions to a charity. The charity would have to comply with its foundation document but, in performing public functions, it would also need to have due regard to the need to eliminate discrimination and promote equality in accordance with the duty, so it would have to look at both things.

The noble Baroness asked whether the equality duty would apply to a single person performing a public function. Yes, it is important to remember that public functions are vital services which impact on the well-being of the public and, therefore, it is irrelevant whether it is delivered by a large organisation or a single person—a GP or a Secretary of State. She asked whether, if a public function were outsourced to a religious organisation, the exemption in paragraph 3 of Schedule 9 would still apply. Yes, it would. The equality duty operates alongside provisions prohibiting discrimination in the rest of the Bill.

I can answer the question which the noble Baroness asked about whether small authorities were consulted on the extension of the new duty to new strands. Yes, in June 2007, we launched a three-month public consultation on the proposal to extend the equality duty. Around 4,000 organisations and individuals responded, including small organisations and representatives of small organisations, such as schools and health service providers. I ask the noble Baroness to withdraw her amendment.

I am most grateful to all noble Lords who have joined in this short debate. I am also grateful that the Minister pointed out, as I did at the beginning, that this is simply a probing amendment. We do not seek to be regressive in any way, although I very much enjoyed the brief history of equality law given by the noble Lord, Lord Lester, and I look forward to reading that again. The point raised by the noble Earl, Lord Erroll, shows that there is confusion in this area about what applies where. I am most grateful to the Minister for answering some of those concerns on the record. I beg leave to withdraw the amendment.

My Lords, in moving Amendment 114ZB, I will also speak to the other amendments in our name. These amendments are in line with recommendations from the Delegated Powers and Regulatory Reform Committee. I welcome the fact that the Minister tabled amendments on Friday which would meet with some of these recommendations and address most of the concerns raised by our amendments.

Amendment 114ZB is tied into Schedule 18, which is about the public sector equality duty exceptions. Our amendment, following a recommendation by the DPRRC, would ensure that only primary legislation could amend the list of exemptions in this schedule with reference to judicial and parliamentary functions. We are very pleased that the Government have now accepted that there is no need to retain flexibility in this instance.

Furthermore, perhaps there is a case for suggesting that it might be inappropriate for a Minister to be able to alter the exceptions relating to other organisations. Can the Minister clarify, for example, when there might be a case for removing the exemptions relating to the Security Service, the Secret Intelligence Service, the Government Communications Headquarters and part of the Armed Forces? Is there a specific need to retain the flexibility that regulations would allow, or does she agree that this sort of decision should be subject to primary legislation?

Our second set of amendments in this group, Amendments 115A and 135AA, add a similar power which is awarded to Clause 150(1). This subsection would allow the Minister to update Schedule 19 to include or exclude different bodies. In accordance with the recommendations from the DPRRC we tabled Amendment 115A. It would exclude judicial and parliamentary bodies from the regulation by which amendments can be made to the schedule and so make them subject to the public sector equality duty. Amendment 135AA would mean that the reduced power would also be subject to affirmative resolution for greater scrutiny. We welcome the Government’s amendments which, like ours, are designed to meet this recommendation. I apologise; I have been editing my notes as a result of today’s events and I think that I have probably edited them too much.

However, the government amendments retain the negative power for the changes that occur when an entry is removed just because it has ceased to exist, or because it has changed its name. That seems sensible. Have the Government had any response from the DPRRC about whether this would meet its concerns? It seems a critical factor in knowing what their response is. Furthermore, what consultation has occurred with the devolved Ministries about the changes to their powers here? I beg to move.

My Lords, we too have edited our notes down. I am just reading through them and cannot see any reference to one of the noble Baroness’s amendments. I am hoping that somebody will send me a note about it.

I am going to speak to government Amendments 114ZC, 115ZA, 135AB, 136ZZD, 136ZZE, 136ZAA, 136ZAB, 136ZAD, 136ZAE, 136ZAF, 136ZCA, 136ZCB and 136ZCD, which reflect the recommendations made in paragraphs 11 and 13 of the Delegated Powers and Regulatory Reform Committee’s third report of Session 2009-10.

I shall speak first to government Amendment 114ZC. This seeks to achieve the same aim as the noble Baroness’s Amendment 114ZB, in response to the committee’s question whether it would be appropriate for the exceptions to the equality duty relating to judicial functions or those relating to parliamentary bodies to be removed or limited by statutory instrument. This amendment limits the power in paragraph 5 of Schedule 18 so that it cannot be used to remove these exceptions from Schedule 18. Primary legislation would therefore be required to remove or limit these exceptions. While there is no difference between the intentions of the noble Baroness’s amendment and this one, we think that the wording of our amendment provides more precise clarification.

Government Amendment 115ZA reflects the committee’s recommendation that the power in Clause 150 to amend the list of public bodies subject to the duty, as referred to by the noble Baroness, should not be capable of listing the judicial and parliamentary bodies that are currently excluded from the scope of the duty by Schedule 18. The intention behind this amendment is the same as that behind Amendment 115A, which the noble Baroness spoke to. Again, however, we think that our wording provides greater clarity on this important matter.

I turn now to Amendment 135AB, which reflects the recommendation made in paragraph 11 that the power in Clause 150 should be subject to the affirmative procedure. The amendment is seeking the affirmative procedure to apply to the power to make changes to the list of bodies subject to the equality duty, except where we simply want to amend the entry for a body whose name may have changed or where a body is removed because it ceases to exist. We think that it will be more appropriate for the negative procedure to apply in these particular cases. To have to use the affirmative procedure for such minor issues is likely to be a waste of valuable parliamentary time. Of course, if Parliament wishes to debate any use of this power, it can still choose to do so by praying against a negative resolution order. The noble Baroness asked about removing exemptions on organisations such as security services, Armed Forces and so on. We are retaining a measure of flexibility because those organisations are susceptible to change and because they could change their names or merge.

Amendment 135AA—this was missing from my notes—would delete what the Government have proposed and our Amendment 135AB would amend it. Amendments 136ZZD, 136ZZE, 136ZAA, 136ZAB, 136ZAD, 136ZAE, 136ZAF, 136ZCA, 136ZCB and 136ZCD ensure consistency with the Welsh and Scottish Ministers. I therefore invite the noble Baroness not to move Amendment 135AA.

I thank the Minister for that comprehensive reply and it gives me great pleasure to withdraw my amendment.

My Lords, this is a simple, probing amendment and I will make some brief remarks. The debate about whether Ofqual should be included under the public sector equality duty was covered concisely and effectively in another place. I recall that in relation to this the Solicitor-General said:

“I completely agree that Ofqual should be subject to the equality duty”.—[Official Report, Commons, 30/6/09; col. 594.]

She said that that would be done after the Apprenticeship, Skills, Children and Learning Bill had passed through your Lordships' House and become an Act, thus giving Ofqual statutory status.

Of course, we now have the Apprenticeship, Skills, Children and Learning Act, but I cannot see an amendment here to bring Ofqual into Schedule 19 and make it subject to the public sector equality duty. It may well be that there is a simple answer to this. Perhaps I have missed something that would explain this entirely. However, I have not seen an explanation, and it would be marvellous if the Chancellor of the Duchy of Lancaster could enlighten me. I beg to move.

My Lords, I very much welcome this amendment, moved by the noble Lord, Lord Hunt, to clarify the application of the public sector equality duty, for Ofqual is just the start. On further examination, the schedule proves to be full of holes. I am very concerned to observe that it contains numerous omissions—if an omission can be said to be “contained”. I hope that that is just the result of the sort of unfortunate oversight that the noble Lord, Lord Hunt, was so exercised about the other day. On the assumption that it is, I hope that the Government will commit to remedying the deficiencies in the schedule before it leaves this House.

The Government have given numerous commitments that all organisations covered by the current duties will be covered by the integrated duty. Exclusions that I have noticed include the Electoral Commission, which is surprising when one considers that only recently we were debating political diversity. The NHS is included, but none of its regulators are. The omission of regulators in general is concerning, as is the omission of a number of educational bodies. The General Teaching Council is just one example. As an avid supporter of the arts, I was particularly concerned not to see the Arts Council in the schedule. I could go on, but I shall not. It just remains for the Government to fulfil their commitments and put the schedule to rights. Of course they have the power to change the list by regulation, but they should not expect the Committee to buy a pig in a poke like that. They should populate the schedule comprehensively and reserve their order-making power for amending the list when bodies are created or wound-up. I therefore very much support the amendment.

Amendment 115 would insert the Office of the Qualifications and Examinations Regulator—Ofqual—into Schedule 19, which is the list of public authorities subject to the equality duty. Ofqual, which will be formally established in April and will be the new independent regulator of qualifications and tests in England, must of course be subject to the equality duty. The Government would not contest that. I recognise what the noble Lord, Lord Hunt, said about the comments in the other place by my right honourable friend the Solicitor-General. However, we have since established that we do not need to add Ofqual to Schedule 19 to deliver the desired outcome. The Bill will achieve that without the noble Lord’s amendment. The Apprenticeships, Skills, Children and Learning Act, which received Royal Assent this autumn, establishes Ofqual as a non-ministerial government department, and government departments, including non-ministerial ones, are already covered in Part 1 of Schedule 19. This means that there is no need to include it as a separate entity within Schedule 19.

The noble Lord, Lord Low, suggested that Schedule 19 is practically empty and that the duty covers very few bodies. Schedule 19 as it stands is not the end of the story. At the moment it contains only core generic bodies, such as government departments, local authorities, NHS bodies, educational bodies and the police. We have been clear that we intend to update the schedule with more bodies. Now that we have publicly set out the requirements of the general duty, we want to talk further with other bodies that we think should be included in the schedule. Let me stress that, in broad terms, the duty will cover the same bodies as the current duties and there will be no reduction in coverage. I assure the noble Lord that we are not offering noble Lords a pig in a poke. The two-stage approach is the process that was used to build up the list of bodies subject to the race duty, and we are simply following that precedent. It has allowed us to have informed discussions with those who we propose to list, and we will include them via regulations. There are no inconsistencies, and I hope that this brief explanation will persuade the noble Lord to withdraw his amendment.

Perhaps the Chancellor of the Duchy of Lancaster can clarify the position. I was following her in reading Part 1 of Schedule 19, which is entitled “Public Authorities: General”. I saw under the heading “Ministers of the Crown and government departments”: “A Minister of the Crown”, and

“A government department other than the Security Service, the Secret Intelligence Service or the Government Communications Headquarters”.

She was, however, referring to another type of body. Then, when I looked in the remaining part of Part 1, under the same heading, I did not see the words that she is now explaining appearing anywhere. I am simply seeking further clarification. Could she, please, give noble Lords a little more chapter and verse of exactly where this can be found?

My Lords, before the Minister responds to the noble Lord, Lord Hunt, perhaps she can say whether she means that the regulation-making power will be used to update the schedule—I think that she used the words “update the schedule”—so that the additional bodies with whom she wishes to have discussions with a view to bringing them within the public sector equality duty will not just reside in regulations, but will be introduced into the schedule by the regulation-making power. Is that what she had in mind?

While the noble Baroness is considering the important point made by the noble Lord, Lord Low of Dalston, can she give us an idea of the timescale within which she proposes to give noble Lords and others the clarification that we seek?

Yes, my Lords. Non-ministerial departments are included in Part 1 of Schedule 19, because non-ministerial departments are considered to be government departments. That is what I am informed and that is how they are covered. In response to the questions from the noble Lord, Lord Low, our plan is to publish the list of organisations that we intend to be covered under Schedule 19 in the summer, at the same time as we consult on the draft regulations for specific duties. That is the timescale to which we are working. When we impose the specific duties, the regulations will be subject to the affirmative procedure, which means that government will have the opportunity to debate proposals fully. I think that that is correct. I am looking to the Box for assistance.

Perhaps the noble Baroness can further clarify the point. I always tend, when looking at the interpretation side of any proposal before this Committee, to look at Clause 204, entitled “General interpretation”. I could not see that a government department was defined there in the way that the noble Baroness is describing. It may well be that it is defined elsewhere in a generic way, but I could not see it in Clause 204. We have not yet reached Clause 204, but we may well a little later. It may be helpful if the noble Baroness could explain.

May I have a go, although I will probably get this quite wrong? In Clause 149:

“A public authority is a person who is specified in Schedule 19”.

The definition is extended in subsection (4) to “certain specified functions”—so it is broken down there. Subsection (5) then defines a public function as:

“a function of a public nature for the purposes of the Human Rights Act”,

which has a flexible definition. The power to add to a list of who the public authorities are is the subordinate power, which will be subject to the affirmative procedure, which then gives the flexibility to apply the definition in Clause 149 to particular bodies. I hope that that is right.

My Lords, I understand that that is correct. Does that answer the noble Lord’s questions about a non-ministerial government body?

I think the Minister said that a non-ministerial body is a government department. Is it not better to say that it is a public authority?

Yes, my Lords, just as the department of the Treasury Solicitor, for example, is a non-ministerial department. It is a similar sort of body.

Again, I will clarify for the noble Lord, Lord Low, that we will bring forward a consultative list in the summer at the same time as we consult on the draft regulations for the specific duties. The regulations that add the list to Schedule 19 will be subject to the affirmative procedure, so there will be proper scrutiny of the list.

My Lords, are the non-departmental public bodies in or out? “A government department” is not a good phrase to cover the non-departmental public bodies.

As I understand it, the Equality and Human Rights Commission is one such body and would be covered. My understanding is that such a body is a public authority, not a government department.

My Lords, non-departmental public bodies will be listed in Schedule 19.

My Lords, I reassure the Minister that she has one satisfied customer. I am grateful for her reassurance about the timescale and that the expanded list will be subject to parliamentary scrutiny.

My Lords, I am very grateful to the noble Lord, Lord Low of Dalston, for making some very important points, and I join him in thanking the Chancellor of the Duchy of Lancaster for clarifying the position and in particular for heeding and accepting the advice of the noble Lord, Lord Lester of Herne Hill. As he is a solicitor of the senior court—I think that I am no longer allowed to say the Supreme Court—I normally have to pay substantial sums to obtain that sort of advice. I do not want to debase the advice by saying that the noble Lord gives it completely free of charge, but he does that on so many occasions in this place and I am very grateful to him for clarifying “public authority”, “government department” and “government authority”. I share the slight confusion of my noble and learned friend Lord Mackay of Clashfern as to exactly where we are. I thank the noble Lord, Lord Lester of Herne Hill, for pointing us in the right direction, but I am not sure that I have yet reached the destination that he would advise me to reach.

I do not know whether the noble Lord can afford to go on like this, but he should remember the well known maxim, “No good deed goes unpunished”.

My Lords, clarity has come from the fact that non-departmental public bodies will be listed. The definitions in Schedule 19 are only for those that are there already. A great number will be added in the course of our beautiful summer that is coming.

I do think that we have got somewhere. That is the important thing. I was a little misled at first by the description of a non-departmental public body as a government department, but I have now reached an adequate pausing point for further consideration. I am very grateful to the noble Baroness for the clarity that she has introduced, and I beg leave to withdraw the amendment.

My Lords, the purpose of the amendment is to invite the noble Baroness to explain what appears on the surface to be incompatibility between the Government’s proposals on public procurement and one, or perhaps even two, directives in the European Union.

Clause 154 gives the power to a Minister of the Crown, or to a Scottish or a Welsh Minister, to impose specific duties on public authorities listed in Schedule 19 that are also contracting authorities for public procurement purposes. The Minister may correct me if I am wrong, but I assumed that the Government’s intentions are for public procurement to be another area in which the goal of equality can be pursued.

We therefore tabled this probing amendment, which would make any order made under Clauses 152 or 153 subject to public sector directive 2004/18/EC and directive 2007/66/EC, merely to inquire as to the status of the European directives on public procurement that seem to undermine the Government’s intentions in this area. I immediately apologise to the Committee for any confusion that may have been caused by the reference in the amendment to the “Public Sector Equality Directive”. What was meant, of course, was “public sector directive”.

The intention is that public sector authorities should be able to use procurement as an extra tool to secure equality. The amendment seeks to clarify the extent to which the Government have taken the EU directives into account on this issue. I am sure that they have; I merely seek reassurance, which I believe the Minister will give. However, the Committee may find it useful if I explain why this is a complicated area.

Public sector directive 2004/18/EC requires that public contracts are awarded on the basis of only two award criteria: “the most economically advantageous tender” or “the lowest price”. In what way do the Government expect the public procurement provisions to work given these constraints?

Public sector directive 2007/66/EC has provisions within it that state that there must be review procedures, which would include the award of damages to any person who is harmed by an infringement of the specifications of the directive. We therefore have one European directive which states that public procurement can be based only on two very narrow criteria, and one which states that any infringement of this would result in the award of damages to the party that has lost out. Have these directives been taken into account? What is the solution for ensuring that the Government’s objective of equality-based public sector procurement can also occur? I look forward to hearing the response of the Chancellor of the Duchy of Lancaster. I beg to move.

My Lords, Amendment 115B, tabled by the noble Baronesses, Lady Warsi and Lady Morris of Bolton, seeks reassurance that any regulations that impose specific duties on public authorities listed in Schedule 19, which are also contracting authorities in relation to their public procurement activities, will comply with the European legislation that regulates public procurement. I can offer that reassurance.

Any regulations made under Clause 152 would have to be made with the EC directives in mind and any failure to comply with the directives, whether in the specific duties or any other legislation, could result in infraction proceedings. For this reason, it is superfluous to have an express provision in the Bill. Directive 2004/18/EC specifies the procedures that public bodies, known as contracting authorities, have to follow when awarding certain contracts for goods, services and works. Directive 2007/66/EC sets out the remedies that are available to economic operators who think that a contracting authority has breached the provisions of directive 2004/18/EC.

Both directives have been transposed into UK law by the Public Contracts Regulations 2006 and the Public Contracts (Scotland) Regulations 2006. I should like to make it clear that the Government do not propose to use the specific duties to alter either the procedures set out in directive 2004/18/EC or the remedies prescribed in directive 2007/66/EC and that any attempt to put this in the Bill is unnecessary.

The public sector spent approximately £220 billion last year on goods and services. That is a huge amount of money and much of it went to private providers following the public procurement procedures. The public sector has an important opportunity to use its purchasing power to promote equality wherever possible and it has legal obligations under the equality duty to do so. Achieving value for money and delivering wider and improved social outcomes, such as equality objectives, often go hand in hand. The procurement proposal in the Bill makes this relationship clear.

In June 2009, the Government consulted on policy proposals for the specific duties, including proposals relating to public procurement. Last month, the Government published a policy statement in response to the consultation. The policy statement includes proposals for specific duties requiring contracting authorities to consider the use of equality-related award criteria where they relate to the subject matter of the contract and are proportionate, and to consider incorporating equality-related contract conditions where they relate to the performance of the contract and are proportionate.

Both those proposals require any proposed action taken by a contracting authority to be proportionate and to relate to the subject matter of the contract in accordance with public procurement procedures. For example, as part of a major estate renovation scheme and in an attempt to redress the local and national under-representation of women in building trades, a local council could include a contract condition that requires 10 per cent of the person weeks required to complete the works to be delivered by women who have either an apprenticeship, traineeship or employment contract with the contractor or sub-contractor and are engaged in a training programme which is accepted by the employer. The current procurement regulations allow for this contract condition because 10 per cent would be considered proportionate and the proposals in the Bill will not change this.

Perhaps the Minister will be able to assure the noble Lord, Lord Hunt, that it was because of the brilliance of the noble and learned Lord, Lord Howe of Aberavon, in the European Communities Act 1972 that we made quite sure in this country that even if all of that were not the case, European law in this area would have to be given either direct effect or indirect effect because the Conservative Government at the time produced that admirable mechanism. I mention that only because I know that the noble Lord, Lord Hunt, would like that additional reassurance that his own party has helped, in its most European phase, to achieve the right result.

My Lords, I would certainly endorse that and I pay very warm tribute to everything that the noble and learned Lord, Lord Howe of Aberavon, did in ensuring that we are such a strong partner in the European Community and that we can comply with these directives.

My Lords, I am a little nervous about saying anything, except to point out that the Whip on the legislation was provided by Mr Kenneth Clarke. As I represent the party of Europe, I am particularly pleased that the noble Lord, Lord Lester of Herne Hill, should have singled out praise for my noble and learned friend in the way that he did. But I am not quite sure what relevance that has because I had already been persuaded by the Chancellor of the Duchy of Lancaster that these amendments were surplus to requirements, although I will now carefully study every word that she has spoken. My understanding of these provisions has been increased considerably and her reassurance is very welcome. In those circumstances, I beg leave to withdraw the amendment.

My Lords, I shall speak also to Amendment 118A and to the group as a whole in a single speech. I should emphasise that we on these Benches strongly support both clauses and oppose any dilution of them, and that both clauses are permissive, not mandatory. My amendment to Clause 157 is probing in nature and not intended to hobble or curtail its scope or effect. The amendment to Clause 158 is intended to state in the Bill, in the interests of legal certainty, what is required by EU equality law; namely, compliance with the principle of proportionality. That would be in accordance with the recommendations made by the Joint Committee on Human Rights at paragraph 289 of its report on the Bill.

Positive action is a necessary element in the concept of equality, as the European Court of Human Rights reaffirmed in the DH and others v Czech Republic case. Article 14 of the convention does not prohibit a member state from treating groups differently in order to correct what it calls “factual inequalities between them”. In some circumstances, a failure to attempt to correct inequality through differential treatment may in itself give rise to a breach of Article 14. That is also true of EU equality law. Article 7 of the framework directive provides that with a view to ensuring,

“full equality in practice, the principle of equal treatment shall not prevent any member state from maintaining or adopting specific measures to prevent or compensate for disadvantages linked to any of the grounds listed in Article 1”.

It recognises that a concept of literal equality is too narrow. In William Blake’s words:

“One Law for the Lion and the Ox is Oppression”.

The relevant Explanatory Notes are important. Both here and throughout, they are expressed with great clarity, for which we should be grateful to their authors. I want to mention that particularly because I have not read Explanatory Notes of this quality before, and although I must not name their authors, I think that if I could do so, I would say that Melanie Field and James Maskell between them have done the most extraordinary job I have ever seen. I hope that future Bill teams will work to that high quality. Paragraph 525 explains that Clause 157 provides that,

“the Bill does not prohibit the use of positive action measures to alleviate disadvantage experienced by people who share a protected characteristic, reduce their under-representation in relation to particular activities, and meet their particular needs. It will, for example, allow measures to be targeted to particular groups, including training to enable them to gain employment, or health services to address their needs. Any such measures must be a proportionate way of achieving the relevant aim”.

Paragraph 526 explains that:

“The extent to which it is proportionate to take positive action measures which may result in people not having the relevant characteristic being treated less favourably will depend, among other things, on the seriousness of the relevant disadvantage, the extremity of need or under-representation and the availability of other means of countering them. This provision will need to be interpreted in accordance with European law which limits the extent to which the kind of action it permits will be allowed”.

To comply with the principle of proportionality, the positive action measure in question must both pursue a legitimate aim and be necessary to achieve that aim. Clause 157(1) relates to the European legal principle that measures must be shown to be necessary and focused on a specific disadvantage, requiring that the person concerned reasonably thinks that paragraphs (a), (b) or (c) apply. Clause 157(2)(a), (b) and (c) define the legitimate aims that may be pursued. I note that the Official Opposition have not tabled any amendments to limit the scope of Clause 157 by substituting “can demonstrate” for “reasonably thinks”, as they have done in the next group in relation to Clause 158, to which I now turn.

It is important to record that paragraph 532 of the Explanatory Notes explains that Clause 158,

“permits an employer to take a protected characteristic into consideration when deciding who to recruit or promote, where people having the same protected characteristic are at a disadvantage or are under-represented. This can be done only where the candidates are as qualified as each other. The question of whether one person is as qualified as another is not a matter only of academic qualification, but rather a judgment based on the criteria the employer uses to establish who is best for the job which could include matters such as suitability, competence and professional performance. The clause does not allow employers to have a policy or practice of automatically treating people who share a protected characteristic more favourably than those who do not have it in these circumstances; each case must be considered on its merits”.

The clause defines recruitment broadly so that, for example, it includes a pupilage or tenancy in a set of barristers’ chambers such as my own. It is intended to allow the maximum extent of flexibility to address disadvantage and underrepresentation where candidates are as good as each other, within the confines of European law. The Explanatory Notes explain in paragraph 535 that the clause is new:

“While current legislation allows employers to undertake a variety of positive action measures, for instance, offering training and encouragement for certain forms of work, it does not allow employers to take any form of positive action at the point of recruitment or promotion. This clause extends what is possible to the extent permitted by European law, and applies in relation to all protected characteristics”.

This is an important advance on current law. When I helped prepare the sex discrimination and race relations Acts in the mid-1970s, we included narrowly restrictive provisions allowing positive action to be taken to encourage women and members of ethnic minorities to apply for jobs where they were underrepresented, and to provide them with special training. But we were unable to obtain agreement to allow any form of positive action at the point of recruitment or promotion. That was regrettable and is one reason why employers have made insufficient use of the positive action provisions. They may encourage women or ethnic-minority individuals to apply for work where they are underrepresented, such as in the police service, and they may give them special training to equip them for the work, but they may not use underrepresentation as a reason for appointing, say, a woman or a person from an ethnic minority who is as qualified as other candidates in preference to a candidate who does not share the relevant protected characteristic.

As regards my own profession as a barrister, the Equality and Diversity Committee of the Bar Council, in a 2007 response to a government consultation on the Bill, explained why greater and clearer positive action measures are needed under the law. The committee pointed out that the current law limits positive action measures to a greater extent than is permitted by the relevant European directives. Currently, for example, apprenticeships and other on-the-job training schemes cannot be used as positive action measures. It argued for the need for a wider range of “voluntary balancing measures” to be available to organisations and employers. Thinking of the profession of the noble Lord, Lord Hunt, the Law Society in response to the same consultation also indicated that further “balancing measures” are needed. We therefore welcome the changes made in Clause 158 to encourage much greater use of positive action.

The Official Opposition seek, in Amendments 117 and 118, to restrict the scope and effect of Clause 158 and apparently intend to oppose the Question that Clause 158 should stand part of the Bill, even though in the other place they did not seek to remove the clause. It is questionable whether the amendments would make any practical difference other than to cause confusion and limit the effectiveness of Clause 158. It is ironical that they should do so, for it was the Thatcher Government who, in the Fair Employment (Northern Ireland) Act 1989, introduced a far more robust system of positive action to combat discrimination against Catholics and Protestants in the workplace, drawing on the Canadian employment equity approach which incorporated monitoring and affirmative action, but not quotas. The 1989 legislation of the noble Baroness, Lady Thatcher, provided for compulsory religious monitoring by both public sector and private sector employers. It required employers, at least every three years, to review their employment practices and to compare the religious composition of their workforce with available labour in the catchment area. The legislation also provides for affirmative action measures which exclude quotas but include the setting of goals, timetables and outreach measures.

Monitoring covers about 70 per cent of all employees in Northern Ireland and all employments with 11 or more employees. The Equality Commission for Northern Ireland has kindly informed me that the data reveal that substantial progress has been made and that a sizeable body of independent research evidence shows that the legislative provisions and their implementation have been successful in improving employment equality. The Conservative Party may and should claim credit for introducing the 1989 scheme. It is therefore ironical that it now opposes the much narrower provisions of Clause 158, which are entirely permissive and voluntary and subject to the proportionality principle. My amendment seeks to put the proportionality principle explicitly on the face of Clause 158, and I hope that the Government will be able to accept it.

I should add that this group also includes Amendment 119, tabled by the noble Baroness, Lady Knight, which would give blanket permission to discriminate in favour of the over-50s and disabled people without reference to proportionality. That would clearly violate European law. There is of course nothing to prevent more favourable treatment of disabled people; Clause 13 so provides. The positive action provisions in the Bill apply to disability, unlike the Disability Discrimination Act, to permit positive action between different types of disability—for example, permitting an employer to target training at people with learning disabilities, or to target advertising at people with sight impairments. In relation to age, as well as the positive discrimination measures permitted by Clauses 157 and 158, Clause 13 provides that age discrimination is not prohibited where it is a more proportionate means of achieving a legitimate aim.

I am sorry to have taken so long, but I will not make a second speech on those issues.

My Lords, as the noble Lord, Lord Lester, moved into the 10th minute of his speech, I thought to myself that perhaps it would have been a much shorter speech had he been able to hear my explanation of why these amendments have been tabled, and particularly of why we wanted a debate on Clause 158 stand part. It is not to get rid of Clause 158, because we are happy with “positive action”; it is to allow us to raise our concerns about the operation of the clause. I will come to that and I am mindful of all the points that he raised.

Amendments 117 and 118 are designed to change the language of the clause from “as qualified as” to “equally qualified to”. As I have already explained, we raised Clause 158 stand part to allow further discussion about what is a very important clause. We do not like the clause if it is to be used as positive discrimination, but we would be happy with it if it were to be used as “positive action”, as the title suggests. We are concerned that without our amendments the clause will verge towards the former, which we could not agree to.

The first point that I want to raise is that I was under the impression that the Government intended this clause to be about “positive action”. This is made clear not only by the title of the clause itself, but also by the statement made by the Minister for Women and Equality, Harriet Harman, at Second Reading in another place. She presented this clause on that occasion saying that,

“the Bill includes the power to take positive action”,

to change the situation whereby, if an employer,

“is faced with two equally qualified candidates, one a man and one a woman”,

in this example,

“the employer cannot actually say, ‘Right, we've got two equally qualified people for this job, but I'm going to take you, because you're a woman and I want to diversify my management team’”.—[Official Report, Commons, 11/5/09; cols. 557-58.]

It seems clear that the Government agree with us that this clause should be used for a tie-breaker situation between two candidates who are equally qualified. We would very much support the use of positive action in this way. It is clear that there may sometimes be a desire to discriminate in favour of a candidate with one particular characteristic. The example which has been done to death is one where a job vacancy has opened up in a primary school, when all the interviews, checks and tests have been carried out and the two candidates left are equally qualified to do the job. In this presumably rare situation, the employer would then be allowed to choose the male candidate, with the protected characteristic of gender being the factor which gave him the lead over the other candidate, who was equally qualified.

I hope very much that the noble Baroness the Chancellor of the Duchy of Lancaster can confirm the Government's views on this clause. We have heard what Harriet Harman said about it in May in another place. By the time the Bill reached your Lordships' House, however, a different tune was being played. The Minister introduced the clause saying that it,

“allows … but does not compel”,—[Official Report, 15/12/09; col. 1408.]

employers to recruit a person from an underrepresented group in their workforce when choosing between otherwise equal candidates for recruitment or promotion. This seems to give a different emphasis on the clause. My understanding from this statement is that employers would be allowed to make a choice from a pool of candidates rather than select one person in a tie-break situation.

The Explanatory Notes lend a little more credence to this. One of the examples states that, where the police service employs disproportionately low numbers of people from an ethnic-minority background, and where a number of candidates were,

“as qualified as each other”,

preferential selection can be made,

“to a candidate from an ethnic minority background”.

Our fear is that this clause is there to allow, in effect, positive discrimination. It appears that, instead of a clause which allows employers to make decisions based on protected characteristics in a tie-break, this clause is going to be much broader. We need to clarify this. In fact, would it allow employers to make a decision based on a protected characteristic when there is a pool of candidates who are considered all to be above a certain level of qualification and so can be considered as “qualified as each other”? We could not support that. It would be helpful, for the sake of clarity, if the Minister could confirm whether the Government's policy is indeed that this should only be used in a tie-break situation.

Clarity is necessary because the Minister in another place said that we should not worry because Clause 158(4)(b) prevented any kind of “policy” decision. In other words, this would mean that a company could not have a policy of favouring groups who shared a protected characteristic. I wonder whether this fits with the Government's seeming change of heart about whether this provision should relate to a tie-break or pool situation. The example given in the Explanatory Notes about the police recruiting ethnic minorities seems to show instead what I would have assumed subsection (4)(b) was designed to prevent. Therefore I look to the noble Baroness the Chancellor of the Duchy of Lancaster to clarify that for us. Does subsection (4)(b) prevent a blanket policy—a policy in relation to all recruitment drives—but allow a general policy in relation to one appointment?

To put it another way, is it the Government's intention that a company should be able to say, “We have not employed many of this particular section of people recently”, then advertise a job, interview people from all backgrounds but, when it has found a pool of 20 candidates with the relevant qualifications and skills, to pick the candidate representing what it believes to be an unrepresented class of people over the others? We welcome the commitment to positive action, but this is not the clause we felt we were welcoming when it was first introduced in another place. We are now looking for some reassurance.

We believe that a clause which allows a decision to be made on a protected characteristic for a legitimate reason is very sensible and gives employers a reasonable freedom. If, however, the policy is broadened so that it is likened to positive discrimination, then it will do more damage than good to the cause of equality in a society which believes also very firmly in a meritocracy.

We have seen that many of the business organisations agree with the principle of this clause, but they need essential clarity to allow it to operate effectively. The CBI, for example, has told us that it welcomes the intention, but feels the clause is poorly drafted. It is uncertain how it will work in practice. It calls it a tie break. It would be helpful if the Minister could address that point directly in her remarks. The British Retail Consortium also supports the clause, saying that,

“businesses should be supported to address under-representation in their workforces”.

However, it believes that,

“it is imperative that legislation and accompanying guidance is clear on how this should be done to ensure employers do not end up falling foul of the law”.

The British Chambers of Commerce agree with this point, saying that the language is too confusing. The Bill uses “as qualified”, but the Solicitor-General uses “equally acceptable”. To be consistent with European law, we believe that we should use “equally qualified”, as the amendment does. They also think that the situation the Government are trying to describe is one where there are two equally qualified candidates. We are looking to the Minister to make this entirely clear in her response. I hope also that she will agree that, for the sake of clarity and the correct use of the provision in the Bill, it is possible to accept our amendments. I also await with interest her response to the amendments tabled by the noble Lord, Lord Lester. He has explained that they are to clarify the use of this procedure and ensure that it is used only in the correct specific circumstances, namely when it is a,

“proportionate means of achieving a legitimate aim”,

concerning positive action regarding those with a protected characteristic which might otherwise disadvantage them. However, the most important area to clarify is that which we have raised—namely, the need to make absolutely clear that positive action can apply only in a tie break.

I shall mention the amendment tabled by my noble friend Lady Knight, who sadly is unable to be with us. It raises an interesting issue. We would hope that nothing in this Bill would prevent those over 50 or who are disabled from being integrated into the workforce to address discrimination against these groups, if they were the suitable candidates for the job. However, we cannot support positive discrimination, so this must happen only when a tie break has occurred and two people who are equally qualified have been identified. It is only at this point that a selection on the basis of a protected characteristic should be made.

My Lords, Clause 157 begins with the same phrase as Clause 158, “reasonably thinks that”. The noble Lord, Lord Hunt, does not quarrel with those words in Clause 157, so why does he quarrel with them in Clause 158? The wording must be “reasonably thinks” because it is very difficult to demonstrate that the employer has all the facts and reasons, and I am not always convinced that things are as transparent and clear to the person being interviewed. If you have reason to believe that you have been discriminated against, that is all that you require. Then it is for the employer to demonstrate that they have not done that. I should rather put it that way round than require the person who “reasonably thinks” that they have been discriminated against to demonstrate it. For those reasons, I do not think that the words in Clause 158 should be changed, as they are not being asked to be changed in Clause 157.

The noble Lord, Lord Lester, wants to change the words from,

“which is a proportionate means of achieving the aim”,

to,

“provided it is a proportionate means of achieving the aim”.

I only probed on that and did not intend to pursue it.

I want to continue probing on the noble Lord’s behalf. The proviso he provides would save us a lot of bother in future. The words “which is” are slightly weaker. Many people whom I have dealt with genuinely believe that they have been discriminated against and have gone through the tribunal and all kinds of different things and still think that they are being discriminated against. You then realise that what they want to do is not proportionate. If there had been a proviso right at the beginning, there is a chance that it would have concentrated the mind. I support the noble Lord’s change to “provided it”, because it subtly asks whether a person really has grounds and whether it is so proportionate that it will achieve their aims and objectives. The noble Lord and I know of many cases which we have pursued and have been taken all around but which have achieved nothing. I want the noble Lord’s probing amendment to be more than probing and to be inserted, because it says it better that simply “which is”.

We have already meandered from Clause 157 to Clause 158. I prefer the phrase “as qualified as”, because “equally qualified to” is mathematical. How would you measure it? How will someone know that I am equally as qualified? I sit in your Lordships’ House, and I do not think that I am equally qualified as some of your Lordships. It is better simply to say “as qualified as”. It is more humbling and more genuine, so I shall stick with that phrase.

Finally, on “to be recruited or promoted”, I do not understand why that should be narrowed. I would rather have both. Of course, some people always worry that positive action means positive discrimination, but the word discrimination can be used in two different ways. In the Latin as well as the Greek, discrimination is the same word as discernment. I understand in this sense that positive action and promotion or recruitment means that it is discerning, not simply leaving someone out. I should rather use the same phrase—which for me is not positive discrimination but positive discernment. Unfortunately, some people do not discern that. I would not quarrel with the drafting as it is, except to say that “provided it is proportionate” is a much stronger way in which to put it.

My Lords, before I address Amendments 115C and 118A, tabled by the noble Lord, Lord Lester, Amendments 117 and 118 in the names of the noble Baronesses, Lady Warsi and Lady Morris, and Amendment 119 from the noble Baroness, Lady Knight of Collingtree, it might help the House if I explain the Bill’s positive action provisions.

Clause 157 builds on and simplifies the current legislative framework for positive action. For the first time, these provisions will be extended to cover all protected characteristics and will apply to them all in exactly the same way. As long as the relevant criteria are met, these provisions can be used to address disadvantage, encourage participation where people with a particular protected characteristic are underrepresented, or meet particular needs. For example, a construction firm wishing to diversify its male-dominated workforce could add a statement to its job advertisement inviting women to apply.

Clause 158 enables employers to take targeted action with regard to recruitment and promotion. This will assist employers to address underrepresentation and disadvantage, fill skills gaps, and create a more diverse workforce. The decision to extend the existing, more limited, provisions has been welcomed by businesses as a beneficial move. Any use of these provisions remains entirely voluntary; it is not a mandatory requirement. However, to ensure that employers do not misuse these voluntary measures, Clause 158(4) ensures that employers cannot adopt a blanket policy of favouring candidates simply because they have a protected characteristic and are disadvantaged or underrepresented. Each case must be considered on its merits.

Clause 158 does not permit positive discrimination, nor is it contrary to the “merit principle”. It simply allows an employer, when faced with two candidates who are as qualified as each other to carry out a specific job, to use the desirability of widening the diversity of the workforce as the criterion for choosing between them. I reassure the noble Lord, Lord Hunt, that my emphasis is no different from that expressed by my right honourable friend Harriet Harman in another place: there has been no change of heart. I am grateful to the most reverend Primate for his very reasonable support for these clauses.

Before I turn in detail to the various amendments, I thank the noble Lord, Lord Lester, both for raising the important issue of proportionality in relation to positive action and for his insightful comments on the importance of positive action more generally.

Amendment 115C would substitute “which” with “provided it”, so that the clause would permit positive action provided it is a proportionate means of addressing disadvantage, meeting different needs or reducing underrepresentation. I completely agree with the noble Lord: we would not want the provision to permit action which is disproportionate, or to allow employers or service providers to misuse positive action measures in any way. However, to the great disappointment of the most reverend Primate, I can assure the noble Lord that Clause 157 as drafted will not allow positive action in any circumstances where it is not proportionate. Accordingly, replacing “which” with the alternative suggestion would have no impact on the intent or effect of this provision. Therefore, I urge the noble Lord to withdraw his amendment.

Amendment 118A would make it explicit that any positive action measure taken in recruitment and promotion under Clause 158 has to be a proportionate means of achieving the aims set out in subsection (2) —helping people overcome a disadvantage or participate in an activity. While we consider that Clause 158 as drafted already implicitly embodies a requirement for proportionality, I accept that there are benefits to making proportionality an explicit requirement: it would make clearer what this clause is about, allowing employers to take positive action where proportionate, and also better reflect the terminology used in Clause 157, where proportionality is already explicit. I am therefore content to accept Amendment 118A.

Amendment 117 would change the present wording of the provisions in Clause 158(4)(a) from “as qualified as” to “equally qualified to”. Amendment 118 seeks to delete “to be recruited or promoted” from the qualification criteria. We believe these amendments are misconceived and we will therefore resist them.

It has been claimed that Clause 158 would allow employers to set an artificially low qualification threshold for a job to enable them to gerrymander the selection of the successful candidate—the idea that the pass mark is set so low that almost everyone will make the grade, in the hope that at least one candidate has a targeted protected characteristic. Clause 158 does not permit an employer to recruit or promote a candidate who is less qualified than another just because the employer wants to address disadvantage or underrepresentation—in any event, this would make no business sense. Where the assessment process, in whatever form it takes, evaluates one candidate as having scored, say, 95 per cent and another 61 per cent, those candidates cannot be considered as being as qualified as each other to undertake the job. It is immaterial whether the pass mark was set at 60 per cent, 50 per cent or 40 per cent; the clearly superior candidate must always be offered the job. We are confident that the clause as drafted achieves that effect.

We consider that the amendments could have the effect of leading employers to interpret the clause too narrowly by considering the provisions as being solely about the equality of qualifications per se. An employer might misinterpret such wording as a requirement that candidates should have identical qualifications, whereas the provision is designed to be available where both candidates have demonstrated that they have met the employer’s particular requirements for the post to a comparable standard. Any assessment of candidates’ suitability will depend on a number of factors relevant to the job in question, such as experience, aptitude, physical ability, or performance during an interview or assessment. Formal qualifications are only one way in which a candidate’s overall suitability may be assessed.

The impact of such a misinterpretation could be that employers will be reluctant to use the provision unless they have a situation in which candidates have absolutely identical qualifications, or identical scores if a scoring system is part of the assessment process, rather than looking at the respective ability and suitability of each candidate in the round. This would limit the scope for delivering real equality outcomes for women particularly, people from ethnic minority communities and disabled people, for example, who still experience disadvantage and underrepresentation in the labour market. For those reasons, I urge the noble Lord not to press the amendment.

I will briefly mention Amendment 119, tabled by the noble Baroness, Lady Knight of Collingtree, which would appear to permit any action intended to increase the participation of people aged over 50 and disabled people in the labour market. This amendment is unnecessary. The noble Lord, Lord Lester, helpfully explained how the disability and age discrimination provisions in the Bill permit a wider range of differential treatment than is available for the other protected characteristics. In addition, this Government have done much to increase the labour market participation of people aged over 50 and disabled people through targeted programmes such as the Flexible New Deal, which provides tailored help for jobless people of all ages, including those aged 50 and over. I therefore suggest that the noble Baroness’s amendment is superfluous, but I also ask the noble Lord to withdraw his amendment.

My Lords, I am extremely grateful to everyone who has taken part in this debate, particularly to the most reverend Primate the Archbishop of York for his contribution. When I listen to him on the subject of discrimination, I always feel that he speaks not only as a very distinguished archbishop, but as a human being who understands exactly what the problems of discrimination are, and looks at these issues not as a lawyer but in a common-sense way to make the law work in practice.

I am only a lawyer, but I have experience within my chambers as a small employer; I doubt we employ more than about 30 people, with probably not more than 75 barristers. We have a different kind of experience, because we are constantly seeking to choose pupils and tenants on the basis of individual merit. I have discussed these provisions of the Bill with the diversity team in my chambers, and they are happy to work within that framework. I have been persuaded by what the Minister has said that proportionality is already fully within Clause 157, and that my words add nothing—although I am very grateful that the most reverend Primate prefers them to those already there. It is not for me to second guess parliamentary counsel, once I am satisfied that the substance is there.

I am very grateful indeed that proportionality has been written into Clause 158 by the Minister indicating that she will accept Amendment 118A. The most reverend Primate was also talking about “reasonably thinks”. I think that is in the next group of amendments, so although I agree with him, we will come back to that later. I share the view of the Minister and the Government about the other amendments. This is, therefore, an opportune moment for me to withdraw the amendment.

My Lords, our Amendment 1 is grouped with Amendment 1A. Our first amendment would bring the end of the time over which these provisions can apply—in other words, before both Houses have had an opportunity to consider fuller legislation—forward from 31 December to 31 July. Last night, the Commons voted to reject the proposal to bring the period’s end forward to 31 March. We believe from these Benches that it would be wrong to allow what are acknowledged to be temporary provisions to continue any longer than necessary. Indeed, as the noble Baroness, Lady Noakes, reminded the House, not many days ago the Government were considering introducing the long Bill now, rather than putting any temporary arrangements in place in the interim.

My honourable friend the Member for Cambridge rumbled the Government’s objections to the July date because, had they accepted it, it would have amounted to acknowledging that the general election will be on 6 May. The Minister said yesterday that it was “not certain”—I think that she used those words—that it would be possible to undertake the proper scrutiny of the Bill, given the upcoming general election and recesses, if it were earlier than 31 December. However, December really is a long period in which to allow an unsatisfactory situation to continue to apply. We are talking about provisions that relate to the liberty of the subject. In our view, a Bill relating to the liberty of the subject—the longer Bill—should have priority.

As we are all human, the temptation must be that, if we have a period that runs until December—I say “we” because I suppose that noble Lords will know that we have until December, whereas those in the other place will not know precisely who is batting until then—it is unlikely that anything very energetic will happen until after the Summer Recess. In other words, that would be October, and minds need to be focused and steps taken before that.

I see that Amendment 1A, tabled by the noble Baroness, Lady Noakes, proposes the long-stop date of 30 April. In real terms, I am not sure whether that is any different from 31 March; I wonder how firmly her tongue was in her cheek in proposing that. She indicates that it was not, but I shall wait to hear what she says. There will certainly be some elections in early May, whether or not the general election is then. We believe that ours is a reasonable mid-point, and I beg to move.

My Lords, my Amendment 1A is in this group, and as the noble Baroness, Lady Hamwee, said, it would replace the sunset date in Clause 1(1) with 30 April, rather than 31 July as she has put forward in her amendment. The key issue for the Committee is when we can scrutinise primary legislation, because there is agreement on all sides of the Committee that the previous regime of orders under the 1946 Act has to be replaced by primary legislation. Not even the Government will claim that if the Bill completes its passage in your Lordships’ House this evening there will have been full parliamentary approval for the three orders that were damned by the Supreme Court’s judgment. Our support for the Bill is linked exclusively to the consequences of dealing with terrorism if the vacuum caused by the Supreme Court’s judgment is not filled immediately.

Both the structure of the Bill and the timing constraints of our deliberations mean that parliamentary approval is more formal than substantive. We cannot realistically debate the contents of the three orders, and it is pretty certain that we would not want to approve the 2001 or 2006 orders if they were before us on a stand-alone basis. We might have less difficulty with the 2009 order, in that it has taken on board some of the criticisms made in the courts, but it, too, has problems, or at least substantive issues that ought to be debated. The noble Baroness, Lady Hamwee, has tabled amendments to the Long Title of the Bill in order to accommodate some substantive amendments which we will consider later. As I said earlier, however, I do not believe that that is an ideal way to proceed.

The Government have laid Command Paper 7806, which contains a full draft Terrorist Asset-Freezing Bill, complete with Explanatory Notes and an impact statement. As I explained on Second Reading this afternoon, we had agreed timing with the Government such that the Bill would have had two days in the other place—today and in the week after Recess—followed by three days in your Lordships’ House, over a period ending roughly in mid-March. The chairman of the Joint Committee on Human Rights confirmed that his committee could have handled that March timing. The Government have now put that longer Bill on the back burner and proceeded only with this temporary provisions Bill, which is not entirely unsatisfactory. We, like the Liberal Democrats, believe that the Bill should not remain on the statute book any longer than necessary.

Amendment 1A says that the Bill can stay on the statute book until the end of April. My honourable friend Mr Mark Hoban moved a similar amendment in another place yesterday, with the date of 31 March. The noble Baroness, Lady Hamwee, accused me of having my tongue in my cheek when I moved that date to 30 April. Perhaps I might explain that I have used that slightly longer date because of the Government's decision not to proceed along the lines earlier agreed; that has set back the timetable of getting the Bill through. If a general election comes along before we have concluded our deliberations on a longer Bill, I would hope that we could have completed sufficient scrutiny to allow that arcane process known as wash-up to deal with the rest of the Bill. That might have to stretch into April, depending on when the election is called—assuming, of course, that an election is held on 6 May. I think that that is most people’s working assumption, although it could be later.

The date of 31 July, proposed by the noble Baroness, Lady Hamwee, causes real problems in the context of the general election, which is why if she chooses to test the opinion of the Committee, we will not support her on it. If the Government do nothing in respect of the draft Bill in Command Paper 7806, a new Government formed in early May would not have enough time to process the Bill in the ordinary way—that is to say, using the normal intervals and processes by 31 July. I would hope that if my party formed that Government, we would review and amend the draft before putting it before Parliament. A July sunset would be the most undesirable outcome in that context. If we cannot deal with the issue this side of an election on an expedited process, then, as I explained, we will need a longer period—quite possibly until the end of this year—to prepare legislation and then subject it to scrutiny in the normal way.

I could have done as the noble Baroness, Lady Hamwee, has done and tabled detailed amendments to the Bill in order to debate the substantive concerns that remain with the formulation that appears in the 2009 terrorism order, but that is merely to tinker with an interim solution. Our strong preference is for Parliament to scrutinise the detailed legislative proposals in the context of draft legislation set out in Command Paper 7806 or something like it. I cannot force the Government to bring a draft Bill to Parliament, but if the sunset clause is set at a modest end-April date, that would require the Government to act now by introducing a draft Bill or something else, rather than sit on their hands and wait for another Government to clear up the mess.

Of course I hope that my party will form the next Government and that Treasury Ministers will be led by my honourable friend Mr George Osborne. If we come to power, those Ministers will have quite enough to do to clear up the economy and the mess that it is in without having also to deal with the aftermath of a decade of incorrect use of statutory powers. That is why I hope the Government will think again and put proper primary legislation through the House as rapidly as possible.

My Lords, there is an overwhelming case for the sunset clause to last at least as long as 31 December this year. There may well be a case for having an even longer period, but it seems to me that if any of the amendments proposing other dates were carried, the House would impose on itself a wholly unnecessary straitjacket. Of course, when we are dealing with legislation that is accelerated in this way, there is a legal and moral incumbency on us to see that it is operated for as short a period as is humanly possible. However, we are dealing with extremely complicated situations that need a great deal of thought. Although the draft Bill has been proposed for this short term, it has to be considered from all possible angles. It seems to me that there should be the maximum consultation with all manner of bodies. Why, therefore, confine it to a matter of weeks or, indeed, a few months, if one is speaking of 31 July as a time limit? That is the first reason. It seems to me that there is no case for a wholly unnecessary spectacle of speed and, indeed, of thoughtlessness in this matter, when there is every possible reason for taking as much time as is reasonably necessary in the circumstances.

The second reason is perhaps somewhat less clear, and that arises from the speech of the noble Lord, Lord Myners, at Second Reading, when he indicated—I hope that I do him no injustice—that the Government’s mind was not closed not only in relation to the idea of a longer-term Bill on this matter but in relation to consolidating powers of confiscation, freezing and exercising authority over the property of persons who may be involved in serious crime or, indeed, in terrorism. I appreciate that the noble Lord, Lord Myners, most certainly did not give any undertaking in that regard. I also appreciate that consolidation is now rather different from what it was about 40 years ago when I was a Member of another place and served on one or two consolidation Bill committees, when it was a very mechanical exercise altogether. One did not have to worry about creating anything new at all. It was simply a question of arithmetic, of adding two and two and two and two and coming to a conclusion. Consolidation now is much more creative. One has to consider not only the sheer crude mathematics of various statutory provisions but how one must flesh out a little here or pare a little there. Few Governments in the past 20 or 30 years have ever applied their minds to that sort of consolidation, but certainly on a matter as complicated as this—I think of the ordinary simple lawyer who has to advise a client on where he or she stands in relation to such a matter—it would be a very great blessing indeed. However, you probably could not do it in a matter of months and probably not by 31 December 2010. In those circumstances, therefore, I urge the Committee to consider that all the alternatives to 31 December 2010 are utterly impractical.

My Lords, I take a different view from that of the noble Lord, Lord Elystan-Morgan. We are being asked today to approve a temporary measure on the basis that we will not have a proper opportunity fully to debate the substantive measures. I think that we all accept that those substantive measures will have a very serious effect on the individuals concerned. It is therefore incumbent on the Committee to ensure that the sunset clause is as near to today as is reasonably practicable. As I see it, the only issue is how long it will take as a matter of practicality before the substantive Bill can be properly scrutinised. That covers pre-legislative scrutiny, as well as the debate in this House and in the other place. I am surprised that the Government take the view that it will take as long as another 10 months for that to occur, even allowing for the general election and the Summer Recess. I suggest to the Committee that it is incumbent on the Minister to explain—with respect, he has not yet explained this, nor was it explained in the other House yesterday—why it is not practical for Parliament to address the substantive matters more speedily than a sunset clause of 31 December suggests.

My Lords, we believe that 31 December is the right deadline to set for the expiry of this temporary legislation. As we have discussed today, the issues raised by the asset-freezing legislation are clearly complex and very important. Essentially, we all want to strike the right balance between the needs of national security and the protection of human rights, but reasonable people can and do differ about where the appropriate balance lies. Should the legal test be reasonable suspicion or something higher? Is the judicial review procedure a sufficient legal check on executive power in this area, or do we require more? These are very significant issues that require careful analysis and consideration and where we need to take account of the views of a wide range of interested parties. With a deadline of 31 July, or the end of April, as proposed by the noble Baroness, Lady Noakes, I do not think that we leave ourselves sufficient time to address these and other important issues.

I will attempt to answer the question that the noble Lord, Lord Pannick, raised about timetables. We can reasonably expect pre-legislative scrutiny to take three months, and then around a further three months of parliamentary time will be required for a Bill to go through Parliament. We have to be mindful that with an election pending there will be significantly less parliamentary time available between now and the end of July than there would normally be, so I do not think that an earlier date than 31 December is the right approach. However, in putting this forward, I reassure the Committee on two points. First, we will ensure that serious pre-legislative scrutiny will occur. Secondly, we will progress legislation in a timely fashion, though I am mindful of the strictures of the noble Lord, Lord King of Bridgwater, that I must not seek to write a Queen’s Speech in advance of the appropriate time.

Noble Lords should bear in mind that 31 December is the latest point at which the existing regime will expire. If we are able to legislate more quickly than that, a new regime approved by Parliament with full consideration will come into force earlier. But I believe that the deadline of 31 December ensures that we will have all the time that is required, in a reasonably practicable manner, to complete parliamentary processes.

Why would pre-legislative scrutiny take three months? It would not take your Lordships’ Constitution Committee or the Joint Committee on Human Rights anything like three months to address the important and, I agree, difficult questions that are raised.

Pre-legislative scrutiny requires us to consult widely with a broad group of people who will be affected by this legislation. We have every reason to believe that, given the speed of representation that has already been made and some of the important points that have been raised by your Lordships today, there are critical and complex issues here that require serious scrutiny.

To pick up an observation from the noble Lord, Lord Elystan-Morgan, we should be careful not to put an unnecessary straitjacket on Parliament that would be inappropriate given the complexity of the issues and the need to give them close scrutiny. If we had put an earlier date on the sunset clause such as the end of April or the end of May, the predominant view expressed in the House is that we would be allowing inadequate time for scrutiny and that that ran the risk of legislation that had not been critically examined. Parliament would wish to see us strike a balance. We would like to be able to complete the process before 31 December and, with a fair wind, that is possible. The noble Lord, Lord Elystan-Morgan, is right in observing that we should not impose such a tight straitjacket that we would not permit Parliament sufficient time to carry out the necessary review.

My Lords, it is worth mentioning that, ordinarily, if the pre-legislative scrutiny were to be done by a Joint Committee of both Houses, which might be appropriate here, that committee would normally call for evidence from people who had an interest in the matter—of whom there will be a great number in this case, although one or two of them may have disappeared. Pre-legislative scrutiny given by the Constitution Committee and the Human Rights Committee is rather different. It is certainly pre-legislative scrutiny, but the idea is that a Joint Committee would be very comprehensive and include the kind of consultation to which the Minister referred. If one is to do this exercise properly—and it is quite a difficult exercise—and finish it before 31 December, the parliamentary system will have to work very well.

My Lords, what are the Government’s intentions towards pre-legislative scrutiny? Do they intend to seek to set up a Joint Committee of both Houses to commence the work of scrutinising the draft legislation and when do they intend to do that? Alternatively, do they intend to start a consultation process with a public call for people to comment on the command paper that they issued last week? The command paper is rather curious. It is a wrapper around a draft Bill with Explanatory Notes and an impact statement, but without a foreword or any kind of explanation of why it is there. The Minister has referred to pre-legislative scrutiny, but it would be helpful to know what the Government’s intentions are.

My Lords, I understand that whether a Joint Committee is established is a matter for both Houses to determine, but I can certainly see merit in a Joint Committee. I would expect others to express views on that matter. I have already indicated my expectation that there should be a call for evidence and an expression of views and opinions and that that should be wide and comprehensive because of the delicate and sensitive matters involved. We are trying to strike the right balance between protecting national interests from the threat of terrorism while at the same time not encroaching on the civil liberties of individuals. Parliament needs to show itself to be open to a wide range of opinions and questions.

I am sorry to press the Minister, but he said that he expected that this would happen. Surely the Government have plans. They have come in with a proposal for a sunset date of the end of December. What plans do the Government have to consult? As I pointed out, the command paper containing the draft legislation was issued in a sort of void last week and did not constitute the start of the consultation process and did not call for evidence. What plans do the Government have and when will they start?

I have already indicated to the Committee that my expectation is that we will issue a call for evidence and set up a comprehensive pre-legislative scrutiny process. Whether that matter is conducted by a Joint Committee of both Houses is for both Houses to determine not the Government.

My Lords, the noble Baroness and others are not persuaded by my July date and I am not persuaded by the April date. The practical reason that the noble Baroness is suggesting is that one should get to the full Bill, if I may call it that, by the end of April and then return to it at leisure afterwards. The reality is that there would be no appetite for that. We know the pressures on parliamentary time. It is unlikely that either House, having got fuller legislation in place, would see it as a priority to review it so quickly.

The term “straitjacket” was used. This is a matter on which we should impose a straitjacket on ourselves. The position now is unsatisfactory and how we deal with that and the conditions we impose on ourselves should not be for our convenience, but with a view to getting the best outcome, which involves many factors.

Of course, the Minister referred to balancing the needs of national security and we did not vote against the Second Reading of the Bill. I welcome his acknowledgement of the human rights matters. It is difficult to believe that it is necessary to give three months to pre-legislative scrutiny. Organisations with a particular interest in the bigger Bill are already well appraised of the issues. I asked a representative from one yesterday about the time needed—I will not say which one it was because I do not want to pin it down without prior warning—but the message that I got back was that this is something they could do very quickly indeed. The July date would have been a balance. However, I would not like to hear an excuse at a later date that insufficient time had been given to looking at what would be an extremely important Bill. On a more practical note, I can see that I am on a loser and so I beg leave to withdraw the amendment.

In moving this amendment, I will speak also to Amendments 3, 4, 5, 6, and 7 that are grouped with it. Amendment 2 refers to the decision of the Supreme Court on 27 January that struck down the 2006 order. It was confirmed by the later decision of the Supreme Court that it had no discretion to suspend the order. It had the effect of declaring that the 2006 order had never possessed legal force and that it had been void from the start. It was therefore never an order in any legal sense. Your Lordships will recall this was a matter that was discussed at Second Reading this afternoon. It is only a “purported” order and the amendment corrects the description of the orders in the context of this Bill. It has the effect of protecting the clause from the argument—as, for example, in the Anisminic case—that a legal nullity cannot be used to give rise to further obligations.

The Bill currently gives the provisions of the orders retrospective effect and cloaks them in the authority of the United Nations Act 1946 if they derive their force from that Act. Amendment 3 removes the restrospectivity and the reference to the 1946 Act altogether so that the orders would now, instead, have their own freestanding legal force as primary legislation.

Amendment 5 is consequential. Its effect is to preserve a consequence of the current lines of the Bill which is that the provisions of the Counter-Terrorism Act 2008—about special procedures to preserve security in proceedings about financial restrictions—will apply to asset-freezing proceedings under the Bill.

Amendment 6 goes with Amendments 4 and 7. Its effect is to carry over the effect of any current purported directions of the Treasury, which the Supreme Court has said have no legal effect, into new interim orders as established by the new clause. It would mean that the Treasury would have one month from the passage of the Bill to apply to the High Court for full orders. The amendment also preserves the effect of current licences granted by the Treasury. Amendment 12 is consequential to that, so that the current orders would continue under this proposal.

Amendment 7 is the important amendment which inserts a new clause into the Bill. The effect of that new clause is to alter the process by which a person becomes subject to the asset-freezing regime, to change the length of time that a person can be subject to the regime on the basis of reasonable suspicion alone, and, importantly, to introduce an appeal mechanism for the licensing process. Under the order as it currently stands, the Treasury, acting on the basis of reasonable suspicion alone and without any prior supervision by the courts, may subject a person to the full asset-freezing regime. There is no appeal and no limit to the number of times a direction, which lasts for a year, may be renewed. Your Lordships heard all these criticisms at Second Reading this afternoon.

The amendment and the new clause replace the existing process with one under which the Treasury applies to the High Court for an order to impose the asset-freezing regime on an individual. The court may impose an order on the basis not of reasonable suspicion but on the basis of findings of fact that the person concerned—the individual against whom the order is directed—is connected with terrorism and that the order is necessary to protect the public from terrorism. Reasonable suspicion would not be enough for such a full order, which would last up to a year and which may be renewed on further application from the Treasury as long as the findings of fact remain valid.

For emergency situations, this draft clause provides that the Treasury would be able to apply to the High Court for an interim order on the basis of reasonable suspicion alone, but that interim order would last for a month only. In that month the Treasury would be expected to bring proceedings for the full order in the High Court which would have control of the proceedings. The interim order could be extended beyond a month but only to cover the time taken for the subsequent proceedings for a full order, or for any relevant criminal trial or other proceedings. The purpose is to replace the reasonable suspicion test with a finding of fact that the individual is connected with terrorism.

The 2009 order introduced a licensing system under which the rules that forbid giving support to the subject of the asset-freezing regime might be relaxed for certain purposes. The amendment to Article 17 of the 2009 order maintains that licensing system but does allow an appeal to the High Court both for the refusal of a licence and for the refusal to vary a licence. Your Lordships will recall that the judgment of the Supreme Court criticised many things, but one of them was the lack of any provision for appeal. The purpose of these amendments is to recast the power of making orders, to make those orders ultimately based upon fact, to provide a temporary solution for up to a month, to make sure that it is the High Court and not the Treasury which controls the making of the orders, and to provide for the right of appeal. I beg to move.

My Lords, the noble Lord, Lord Thomas, has made a good case for the amendments in this group. I will not go through the amendments in detail or comment on the particular drafting of the amendments because I sympathise with all the points that he has made. As I explained at Second Reading today, we do not regard this Bill as one to which substantive amendments should be made. Essentially the fast-track process does not lend itself to this kind of amendment. Our normal process is a deliberative one, with pause for thought after Second Reading and again after Committee. I do not know about the Liberal Democrat Benches, but I do not feel as if I have paused for thought at all today.

If the Government had introduced a Bill along the lines of the draft issued last week, we would have had a better opportunity to reflect on these amendments. If we were going to try to perfect the 2009 order, there would be other amendments that we would think worth considering. We will not be able to support these amendments today. However, is saying that, I agree that they raise valid points and I hope that we shall have a proper opportunity to consider them in the context of a full Bill at some point.

My Lords, the noble Lord, Lord Thomas of Gresford, makes a number of points with which I have very considerable sympathy. However, I say with the utmost respect that Amendments 2 and 3 may well be unnecessary. It is not a case of saying that these provisions shall have the effect as if they were primary legislation—they are primary legislation. Although there is a history that leads us back to the realms of various elements of delegated legislation, that has no real relevance to these provisions at this time.

I have immense respect, regard and admiration for the noble Lord, Lord Myners, in every context, particularly in this one. If he had been spending or mis-spending his life for the past 30 years in the courts, he could not have made a better fist of it than he did at Second Reading today. However, he said that we were interpreting UN Security Council Resolution 1373 as including a situation where a person not only was proven to have taken part in terrorism but was indeed suspected of that. That is an utterly logical and understandable attitude to take, but technically very probably a wrong one for this reason. Although that is the historical narrative of what has brought this crisis to your Lordships’ House today, with regard to the actual legislation that we are considering, the United Nations resolution is totally irrelevant. If there never was such a thing as the United Nations, the legislation would stand or fall on its own feet. The fact that you may in legislation refer to or quote from poetry, from the Bible or from anywhere else makes no difference. Once you have incorporated the words in an Act of Parliament, it is the Act of Parliament under the sovereignty of Parliament that counts, not its origin.

It is often said that Parliament can do whatever it likes except make a man a woman and a woman a man. I am not sure that that restriction applies any longer. Be that as it may, Parliament has total sovereignty. It is in the exercise of that sovereignty that we are entitled to do this. We are referring to the wording of what were once delegated powers and incorporating those powers in primary legislation. It is the primary legislation that will be judged from now on. On that basis, much as I sympathise with the views expressed by the noble Lord, Lord Thomas of Gresford, on the other matters, I respectfully submit that Amendments 2 and 3 are not necessary.

My Lords, perhaps I could ask the noble Lord about Amendment 7. The Bill extends to Scotland, but I do not see any reference to the jurisdiction of the Scottish courts. Perhaps the noble Lord can tell us what role, if any, the Scottish courts might play, and what happens to somebody in Scotland whose assets are frozen.

The noble Lord makes a valid point. Fortunately we have a Report stage at which all these matters can be verified.

My Lords, I share the concern of the noble Baroness, Lady Noakes, about whether today, in debating the Bill, we can address the important and difficult issue of the substantive conditions that must be satisfied before an asset-freezing order takes effect. I am also concerned that the amendment moved by the noble Lord, Lord Thomas of Gresford, seeks to confine the substantive order to circumstances where there is a finding of fact that the individual is connected with terrorism. There is a strong case for maintaining such a power in circumstances where the individual is reasonably believed to be associated with terrorism. It is a much stricter test than the test merely of reasonable suspicion that the Government wish to maintain.

First, I will make a small technical point. Clause 1(2)(d) refers to the Terrorism (United Nations Measures) Order 2009. Under Amendment 2, it is to be called “purported”. When it comes to later amendments, it has suddenly dropped its “purported” and has become—what should I say?—fully fledged.

There is a Scottish point that must be dealt with. We are in grave difficulty when we attempt to alter the test that was used in the orders that have been quashed, because it is hard for us now to take the view that the Government’s protection is more than is necessary in the circumstances, with which they are much more familiar than any of us can be. I would not wish to take the risk of reducing the ambit of the orders without a full discussion, for which we have neither the time nor the opportunity. This is meant effectively to put in place the orders that have been quashed or are liable to be quashed. Therefore, to alter them would be beyond the present exercise, and beyond the scope of the time that we have allotted for the purpose, in order that the Bill might become law later this evening or early tomorrow morning.

My Lords, I respectfully agree with the comments made by the noble and learned Lord, Lord Mackay. The debate that we have just had is illuminating because it identifies how complex and different the views expressed on this issue are. It is clear that the amendments proposed by the noble Lord seek to bring about a fundamental change in the nature of the terrorist asset-freezing regime that we have. I make no comment for the moment on whether they are soundly based: I simply say that that is their purpose. We will not be able to deal with them adequately—I would almost say “at all”—this evening. Justice should be done to them, because we know from the Supreme Court decision that it wanted Parliament to have an opportunity to have a mature, reasoned and seasoned debate. That is what we have decided to do in relation to the management of the Bill.

My Lords, I refuse to accept any criticism on the drafting or principles because the Bill was published only a couple of days ago, which has not given anybody a chance to look at it in depth. I accept the criticisms about Scotland: I spend much of my time in Scotland, so I am very concerned about Scottish legislation. I am also concerned by the point made by the noble Lord, Lord Pannick, about whether the test should be reasonable belief or a stronger finding of fact by the court. Obviously these matters should be pursued when the full Bill is brought before us, and I shall do that on another day, as the noble and learned Baroness invited me to do. For the moment, I beg leave to withdraw the amendment.

I shall speak also to Amendment 6C. These amendments concern the further directions which the Government might make under the orders made under the United Nations Act. I fully accept that the Government may need to make directions that further persons are designated for the purposes of asset freezing between the time that this Bill receives Royal Assent and the time when it is replaced by substantive primary legislation. I also accept that the Government may need to renew or vary a direction. Therefore, I accept the thrust of Clause 1(3)(a).

However, my concern is that, as drafted, it appears that further directions can be made under all the orders listed in Clause 1(2). My amendment deletes the reference to “further directions” in subsection (3)(a). Amendment 6C inserts a new subsection into Clause 1 which specifically says that:

“Further directions may be made under”,

the 2009 order only but not under the 2001 and 2006 orders.

The 2009 order is far from perfect; we had a small taste of that on the previous group of amendments. The advantage of the 2009 order is that it is an improved version of the earlier orders: the 2001 and 2006 orders allow the Treasury to designate someone who may reasonably be suspected to be or may be a terrorist. That was removed following the Court of Appeal judgment and does not appear in the 2009 order. The 2009 order made other beneficial changes.

I am aware that the 2006 order repealed part of the 2001 order and that the 2009 order repealed part of the 2006 order. It may well be that my amendment is unnecessary because no further directions can be given under the earlier orders. However, I am not absolutely sure of the position, and that is why I have tabled the amendments. If directions can be given only under the 2009 order, can the Minister explain why subsection (3)(a) is drafted as it is? It refers to all the orders. I beg to move.

Perhaps I could ask a question which follows on from what the noble Baroness, Lady Noakes, has asked about the earlier orders. In what circumstances would the Government want to rely on the earlier orders?

I can clear this up. The noble Baroness, Lady Noakes, says that she seeks, by these amendments, to provide that any future directions can be made only under the terrorism order 2009. We agree that any future directions will have to come under that order and, therefore, we do not think it is necessary.

Article 26 of the 2009 order revokes the 2006 order, with savings only for current directions, and similar provisions in the 2006 order revoke the 2001 order. Therefore the 2009 order power is the only live direction-making power which the Treasury can legitimately use. I think that is the clarity which the noble Baroness wanted. The drafting makes that clear once you know that that is the only power. We think that matter has been covered. I thank the noble Baroness, first, for being so quick on the uptake and noticing that there might be a lacuna and, secondly, for helping us to try to close it. I can reassure her that there is nothing there to worry about.

I am entirely satisfied with what the noble and learned Baroness has said. I beg leave to withdraw the amendment.

Amendment 6B adds the words,

“after the date that this Act comes into force”,

at the end of Clause 1(3)(c). This deals with the degree of retrospection involved in this Bill, particularly in relation to criminal offences created by orders. That was raised during Second Reading by the noble Lord, Lord Wallace of Tankerness. I had already prepared this amendment for tabling and in view of the timing of this Committee stage I cannot check exactly what was said in Hansard so I apologise if I go over old ground, but I thought it wise to ensure that there is clarity on this point.

The effect of my amendment is to ensure that prohibitions and offences in the orders can apply only in relation to any acts after the Act comes into force. I know I do not need to recite to the House why retrospectivity in relation to criminal offences would be unacceptable.

It has been put to me by Justice, which has provided very helpful briefing, as other noble Lords have said, that the effect of the retrospective deeming contained in Clause 1(2), which subsection (3) expands on, is that the prohibitions referred to in paragraph (c) are similarly retrospective. I can also see that subsection (1) refers only to the period after the Act comes into force. If there is any scintilla of doubt or ambiguity about a matter as important as retrospectivity for criminal purposes, we must be quite clear in our resolve to remove that ambiguity. I hope that the Minister agrees with that. I beg to move.

I can reassure the noble Baroness that the amendment is unnecessary as Clause 1 already provides for this. The Bill does not provide for criminal liability for any acts or omissions before the Act comes into force. For the period between 4 February and the commencement of the Bill, failure to comply with the asset freeze will not be a criminal offence. The Bill makes that clear in Clause 2(5)(b). In any case, Clause 1 sets out clearly that the provisions of the Bill have effect only when the Bill has received Royal Assent. Therefore, I invite the noble Baroness to withdraw her amendment. I am very happy to have been able to clear that up.

I thank the noble and learned Baroness for that. I thought that was what I heard during Second Reading this afternoon but, as I explained, I thought it wise to have another go to be absolutely clear. I beg leave to withdraw the amendment.

This amendment would replace the first clause of the Bill with a provision applying the relevant section of the Anti-terrorism, Crime and Security Act 2001 to the situation which this Bill addresses. We tabled this amendment because the Government said that the power in Section 4 of the 2001 Act to make freezing orders does not apply because the object of the order must be a foreign resident or a foreign country. It seemed to us that rather than the slightly crab-wise approach of this legislation, one could simply make it apply by leaving out the conditions relating to foreign residents and so on.

The 2001 Act has some important attributes. Some judicial oversight is already provided by the Act but it is perhaps limited in light of the discussions we have had already on the Bill. Under Section 63 of the Counter-Terrorism Act 2008, application to the High Court or to the Court of Session can be made in connection with any decision of the Treasury and in connection with its functions under the 2001 Act. In parenthesis, I ask the Minister—I have given notice of this and it is important—whether she can tell the Committee whether Section 63 of the Counter-Terrorism Act will apply to the Bill we are considering now when it is enacted. Section 63(1) refers to the UN terrorism orders, to Part 2 of the 2001 Act and to a schedule to the 2008 Act.

Under one paragraph of the schedule to the 2001 Act, regarding orders which can be applied, the Treasury must, if asked, give the reasons for including an individual in the order. Individuals also have a right to seek compensation. There are also provisions regarding licences—that is, bluntly, arrangements for funds to be made available to allow individuals to live. There are even provisions in the schedule that would, I think, benefit the Treasury. It includes in primary legislation some things that might be a matter of practice. We might be told that those provisions already apply, but this will make it certain. What is most important, in the light of the judgment that has led to our proceedings today, the 2001 Act has had the benefit of parliamentary process. I beg to move.