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House of Lords Hansard
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Lords Chamber
27 July 2010
Volume 720

House of Lords

Tuesday, 27 July 2010.

Prayers—read by the Lord Bishop of Blackburn.

Introduction: Lord Beecham

Sir Jeremy Hugh Beecham, Knight, having been created Baron Beecham, of Benwell and Newcastle upon Tyne in the County of Tyne and Wear, was introduced and took the oath, supported by Lord Walton of Detchant and Lord Cunningham of Felling, and signed an undertaking to abide by the Code of Conduct.

Introduction: Lord Browne of Ladyton

The right honourable Desmond Henry Browne, having been created Baron Browne of Ladyton, of Ladyton in Ayrshire and Arran, was introduced and took the oath, supported by Baroness Scotland of Asthal and Lord Foulkes of Cumnock, and signed an undertaking to abide by the Code of Conduct.

Children: Trafficking

Question

Asked By

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To ask Her Majesty’s Government what support they will provide for trafficked children.

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My Lords, this Government are committed to tackling human trafficking and to supporting and protecting the victims of this vile crime. Responsibility for the care, protection and accommodation of child trafficking victims falls under the statutory responsibilities of local authorities. They must ensure that the child’s needs are assessed, that they are placed in safe accommodation and that they are given social work support to plan for their care.

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My Lords, I thank the noble Baroness for that positive response. Does she agree that these children are among the most vulnerable in society and, therefore, that they need collaborative efforts to help and support them? What efforts are being made across government departments and across systems at a local level to provide that support?

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I thank the noble Baroness for having given notice of her supplementary question and of the view she takes on the need for collaboration across government. We share that view. The previous Government issued extensive statutory guidance to local authorities and other interested parties—the latest guidance being Working Together, issued earlier this year—with precisely the aim of supporting closer working in areas such as finding suitable accommodation. We entirely agree that these children are extremely vulnerable and should get the best protection possible. I think it is true to say that CEOP is currently rolling out initiatives, the details of which I do not have, but I know that they are under way. At the national level, we are reviewing the operation of the national referral mechanisms—which I think my honourable friend the Minister with responsibility for immigration mentioned in the other place—with the aim of encouraging further co-operation among the agencies involved.

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How many children are involved in this terrible trade?

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My Lords, this is one of those things where you cannot always be certain what you do not know. However, we believe that the figure for the last year was in the order of 325 children.

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My Lords, I declare an interest as co-chair of the All-Party Parliamentary Group on Human Trafficking. I assume that the Minister has read the report from the Anti-Trafficking Monitoring Group, Wrong kind of victim?. In it, it appears that the national referral mechanism treats children who are trafficked as not in fact being victims for the purposes of the convention. What are the Government going to do about that?

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I had not heard that the national referral mechanism was not treating children as it should. I shall certainly look into that. But I think it fair to say that observations made by that organisation are among the reasons why the Government have agreed to look at the functioning of the national referral mechanism.

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My Lords, does the Minister accept that housing trafficked children in care accommodation could place those vulnerable children at risk of further exploitation, particularly of sexual abuse? Will she ensure that work with CEOP and other organisations looks at that in particular and bears it in mind?

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I entirely take the noble Baroness’s point and will certainly bear it in mind.

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My Lords, does the Minister agree that there are grounds for thinking that support for child victims is hampered by failure first of all to identify them, often wrongly criminalising them? No adequate facilities are in place to support them yet. Does she agree that that therefore implies that we should have more dealings with children’s services and NGOs at a much earlier time? Furthermore, is she confident that we are complying with Articles 10 and 12 of the convention?

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My Lords, the Government would agree that this is a very difficult area of policy and that we encounter considerable difficulties in identifying the status of children when they arrive. It is not always clear whether they have been trafficked or whether they have been smuggled into the country—and those are two different things. So dealing with some of these individuals lacks clarity. However, I do not accept that the Government are not trying to do their very best. One object of having the review is to see whether we cannot do things better. We believe that we are in compliance with our convention obligations.

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My Lords, how many prosecutions have there been in the past two years in respect of trafficking, and how many of those have ended in conviction?

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There certainly have been prosecutions. I am not sure that I can give the noble Lord the actual figure, but I shall certainly write to him. The most reverend Primate also raised this issue of criminalisation. There are people who have previously been trafficked who then exploit other children who have been trafficked for the purposes of criminal activity. There have been examples in cannabis farms. So it is right to prosecute those who engage themselves in criminal activity.

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The Minister has twice referred to CEOP, a very valuable agency created by the previous Administration which is very highly valued by the public. It is therefore not clear why the Government have decided, in their new regime, that CEOP should not exist any longer. Is it to be merged with another body? More importantly, can the Minister assure me that there will be no less funding than there is at the moment so that its valuable work can continue?

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My Lords, the functions of CEOP will certainly remain within the new structure for the National Crime Agency. There is no intention to abolish those functions. As to the budget figure, obviously I cannot give an assurance of that kind until we know the outcome of the CSR review. But I note the point that has been made.

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My Lords, we are aware of work going on to anticipate problems around the Olympics as regards trafficked women. Is this a problem that has been identified as regards trafficked children as well? If so, are steps being taken to address it during the two sets of Games?

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My noble friend is right to say that this is potentially a vulnerable point. We have the Olympics particularly in mind and will be looking to see what measures are necessary.

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My Lords, are these children returned to their countries of origin, and what protection is given to those children who have been sexually assaulted, who might be considered by their families to have besmirched the family honour?

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My Lords, I am not aware of any particular category of children who fall into those circumstances. But it is certainly the case that every child coming within the category of a trafficked individual has a social worker attached to them who examines and takes account of their needs before putting forward a plan for their safeguarding.

Agriculture: CAP Direct Payments

Question

Asked By

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To ask Her Majesty’s Government whether they have reached conclusions on the findings of the Department for Environment, Food and Rural Affairs-funded Dutch Agricultural Economics Research Institute (LEI) study of the likely impact on United Kingdom farmers if common agricultural policy direct payments were removed by 2013.

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My Lords, I declare an interest as a recipient of the single farm payment. The Dutch Agricultural Economics Research Institute’s report, commissioned by the previous Government, is an academic exercise to look at a hypothetical scenario. It should be noted that the data are from 2004 to 2006—a time when exchange rates were unfavourable to the United Kingdom—and fail to account for the 70 per cent increase in UK farm incomes that has since occurred. Finally, there is no chance of direct payments being withdrawn by 2013.

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My Lords, I thank my noble friend for that reply, but does he not agree that the LEI report indicates that 35 per cent of farms in the UK would become financially unviable if Pillar 1 payments were withdrawn, while 83 per cent of all EU farms would remain viable? Will he seek to reverse the previous Defra policy of abolishing single farm payments, as that would save many UK livestock farms that depend on those payments for their financial viability? The alternative is land abandonment. This subject is very important.

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My Lords, I acknowledge the first half of my noble friend’s contention, but in my initial Answer I explained that the report data are somewhat out of date and that there have been fairly substantial changes in the economic position for farmers since then. My noble friend is right that the financial perspective for 2014 to 2020 will be negotiated in a scenario of much more limited financial resources being available than before. The Government’s view is that Pillar 2 represents a more effective use of those limited resources. However, I am really not expecting direct payments to disappear immediately under the next financial perspective.

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As the noble Lord is a member of a Government who are more and more committed to the role of market forces but is not committing himself imminently to change, what plans do he and the Government have for introducing market forces to agriculture, thus contributing to the savings that they are looking for in every other area of public expenditure?

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My Lords, no one thinks that this is going to be easy. In my experience, however, there are very few farms that can claim that they have exhausted all potential for making more efficiencies, so I take the noble Lord’s point. Many would benefit from training to improve skills, especially in business management, cost reduction and better marketing strategies, such as through producer organisations. As a whole, the EU has been falling badly behind its global competitors in productivity growth over the past 30 years and the Government are working hard on how this can be reversed.

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My Lords, will the Minister consider—

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This side.

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My Lords, let us hear from the noble Lord, Lord Willoughby de Broke, and then from my noble friend.

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I am most grateful. Will the Minister reassure the noble Lord, Lord Livsey, and indeed the noble Lord, Lord Tomlinson, that successive French Governments have stated repeatedly that there will be no change whatsoever to single farm payments after 2013? Will he also therefore reassure the British taxpayer that they will continue to pay for French farming for the foreseeable future?

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My Lords, the noble Lord is a noted cynic on this subject. I assure him that the British Government will be negotiating hard at EU level for a reform to the CAP.

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My Lords, I apologise. I was slightly confused by the noble Lord, Lord Willoughby de Broke, because he said, “This side”, and the Front Bench opposite agreed with him. Will there be any move to deal with the power of the supermarkets in setting prices, which is having a detrimental effect, especially on hill farmers in livestock areas? Indeed, it is one of the major causes of depressed incomes for livestock farmers.

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My Lords, I very much take my noble friend’s point. He should be aware that the coalition programme for government, which was published on 18 May, made a commitment to introduce an ombudsman in the OFT to enforce the groceries and supply code of practice and to curb abuses of power that act against the long-term interest of both consumers and farmers.

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My Lords, what strategy are the Government putting in place to build up support among other member states for CAP reform and for promoting our interests? Given that the Lisbon treaty now gives the European Parliament a bigger say in agricultural policy, how are Conservative Ministers and MEPs planning to get support there beyond the small and very motley group of allies that they have at present?

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The noble Baroness is right that negotiation needs to go on at EU level; indeed, I can confirm that comprehensive negotiations are continuing. She is also right that it is now a matter of codecision, so those negotiations will need to go on with MEPs.

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My Lords, the Minister has already heard that land abandonment is likely to be one of the greatest challenges for a future CAP. The potential loss of upland farms could have a large impact in my diocese and, I know, in many other areas. What consideration is being given to preventing this from happening in future?

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I am grateful to the right reverend Prelate for that question. We recognise that the future of the uplands is a matter of considerable concern to a great many people and organisations. We have a wide range of policies and schemes in hand—the uplands entry level scheme and others—to address individual issues raised by the Commission for Rural Communities. We recognise the potential of the uplands for generating greater public goods and we are working on unlocking that.

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I declare an interest as a farmer receiving payments. Does the Minister agree that, to capture improved returns, agriculture needs to move beyond primary processing and up the value-added chain? What is Defra doing to help in this regard?

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I agree with that. I have explained a bit about what we think is the right way to go in terms of competitiveness. I will leave it at that for today.

Disabled People

Question

Asked By

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To ask Her Majesty’s Government whether they have discussed disability issues with the Royal Association of Disability and Rehabilitation.

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My Lords, my department engages regularly with RADAR to discuss disability issues. Ministers and officials at the Department for Work and Pensions are committed to a constructive dialogue with RADAR and will seek RADAR’s continued involvement in the Government’s disability equality agenda.

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I thank the Minister for that response. Can he be a little more forthcoming and tell us how often these meetings are held?

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My Lords, I believe the Minister for Disabled People, my honourable friend Maria Miller, phoned the chief executive of RADAR in her first week in office. RADAR then attended a round table event that she hosted last month. RADAR is a member of a group of organisations that meets regularly—four times a year—with the Minister. The first meeting of that organisation is tomorrow. RADAR is also a member of the Right to Control Advisory Group, which meets every six weeks with the Office for Disability Issues. There are also ad hoc meetings between RADAR and Ministers and officials across government.

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I welcome the discussions but that does not tell me what the Minister has said.

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My Lords, to make it clear, we have a regular dialogue with RADAR and the whole disability lobby. I know that my honourable friend Maria Miller has seen 15 different lobby groups so far.

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My Lords, I know that we are particularly interested in ensuring that disabled people can use transport and achieve places in education. What is the Government’s attitude towards those local authorities that are already cutting fees for transport? For example, there is a college where severely disabled youngsters are now being charged for their transport by their local authority for the first time. Is this the kind of policy that the coalition Government are looking towards?

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My Lords, I place on record the Government’s determination to push ahead with the equality agenda for people with disabilities. We are monitoring the situation very closely. We are signed up to the UN convention, as this House will know. Transport is one of those areas within the convention on which we are determined to fulfil our obligations.

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What steps have the Government taken in their discussions with RADAR to ensure their oft-repeated pledge that the cuts in public spending will not have a disproportionate impact on vulnerable and poor people?

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My Lords, we are making sure that all the impact assessments that we are obliged by law to go through are being done on a timely and appropriate basis.

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My Lords, will the Minister kindly tell us what representations RADAR and other disability organisations have made to the Government in light of the proposed severe cuts to disability living allowance?

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My Lords, we are just embarking on a process of investigating what to do in the context of DLA. As the noble Baroness knows, this is due to come in in 2013. We have to design a whole structure of making those assessments. We will do so in full consultation with members of the disability lobby.

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My Lords, when dealing with groups such as RADAR, will my noble friend bear in mind that, good as they are, they will never be able to cover the whole spectrum and government must always try to drag in such expertise as they can from across all the groups and then they must co-ordinate advice, because without advice we will pass more laws and achieve very little?

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My Lords, I thank my noble friend for that excellent point. Clearly, we make an enormous effort to see people right across the disability lobby, not just RADAR. RADAR is part of various groups. It is important that we consult. The House will be familiar with the motto “Nothing About Us Without Us”. We take that obligation very seriously.

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My Lords, I declare an interest as a recipient of disability living allowance. In last Thursday’s debate on the implications of the Budget in relation to poverty, the Minister stated that,

“some laxity has crept into the system”

regarding who is assessed as being eligible for DLA. What evidence is this based on? Which groups of disabled people did he have in mind? He also said:

“We remain absolutely committed to supporting those with severe disabilities”.—[Official Report, 22/7/10; col. 1133.]

To which groups was he referring when he said that?

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My Lords, DLA has grown from 1 million people in the early 1990s to more than 2 million at the beginning of this decade to more than 3 million now, which is a huge expansion. Many of those people were self-referred. Clearly, we need to ensure that the money which we spend on people with disabilities is directed at those who really need it.

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My Lords, the Minister will be aware that many disabled people are helped back into employment by a variety of organisations, including charities and social enterprises—some very small and at very local level. The Government now propose to pay those who provide this support in arrears and by results. Does the Minister accept that many of these organisations will not have the reserves to see them through this important work and that therefore the one size fits all, that is being proposed here, will not work? How is that compatible with big society support for the voluntary sector?

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My Lords, if the noble Baroness is referring to the work programme, clearly that is a structure in which consortia will come together and help people right across the spectrum with differential pricing—something which is not currently in existence and means that people concentrate on the easier to help. The work programme will not. The capital is a key ingredient of the work programme. Clearly, capital must go in to support not just the prime contractor but the whole consortia. That is how the smaller organisations will get the resources in order to help the people who need help the most.

EU: European Investigation Order

Question

Asked By

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To ask Her Majesty’s Government whether they plan to opt into the European Investigation Order.

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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 a patron of Fair Trials International.

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My Lords, the Secretary of State for the Home Department has today made a Statement in the other place to the effect that the UK has today formally indicated to the President of the European Council that the UK wishes to opt into the EIO.

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My Lords, I am grateful to my noble friend for that response, but I hope she will forgive me if I ask her to recognise that many people were very disturbed by this decision. Is she aware that at present, inter alia, there is no agreed basic standard across Europe for pre-trial evidence gathering and analysis, no implementation of basic minimum procedural defence safeguards and no coherent data protection regime? As a result there is a widespread view that there is likely to be an inequality of arms between defence and prosecution, and that will cover important areas such as proportionality, extraterritoriality and double jeopardy. Given this, would it not have been better for us not to opt in, bearing in mind that we cannot opt out once we have opted in, until we saw the final shape of the document and could be certain that its contents would provide satisfactory safeguards for our civil liberties? Otherwise, are we not signing, or have we not signed, a blank cheque?

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My Lords, I have to disagree with my noble friend. We believe that opting into the EIO is in the interests of justice. It does not transfer any jurisdiction, which is what many might have feared, and we actually believe that the system of mutual legal assistance, which is already operating, deserves to be improved by one of the main innovations that will take place as a result of the EIO—setting deadlines for the receipt of evidence that is sent from one country to another. That is one of the current defects of mutual legal assistance. In other respects, the EIO does not change the present regime.

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My Lords, I welcome today’s decision by the Government, which perhaps gives little comfort to the noble Lord who asked the Question. Should it not be the case—will the Minister agree?—that there should be greater consideration of the rights of the suspect, and should this not include judicial scrutiny at both the issuing and executing stages?

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I am afraid that I did not hear the noble Lord’s question. Can he repeat it, please?

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Fortunately it was brief. Does the Minister agree that there should be greater consideration of the rights of the suspect and that it should include judicial scrutiny at both the issuing and executing stages?

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My Lords, there are certainly some reservations about the operation of mutual legal assistance, which is a separate issue from the actual operation of, or changes to, the regime that the EIO will bring. Some of the matters that we are reviewing include the reservations expressed about the operation of mutual legal assistance.

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My Lords, does the noble Baroness agree that this is a great extension of the European Union’s power and influence over policing in this country and, indeed, over the judiciary? Can I have her assurance that this matter will be discussed in full by both Houses of Parliament?

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An understood procedure for considering issues of this kind was laid down by the noble Baroness, Lady Ashton. The Government are following that procedure. The order resulting from that will follow the normal procedure in the European Union.

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My Lords, does my noble friend think that opting into an arrangement whereby foreign police and other authorities can instruct British police to gather evidence on their behalf sits very well with the proposal for elected police commissioners, in the interests of the big society?

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I have to say to my noble friend that there is no provision whereby and no way in which, under the EIO, foreign police authorities can exercise jurisdiction in this country. It is not a provision of the EIO, is not a feature of the MLA, and will not happen.

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My Lords, my noble friend may have misunderstood me. I did not suggest that foreign police officers would be able to exercise jurisdiction. I suggested that, as I understood it, this new departure would allow foreign police authorities to instruct British police authorities to gather evidence on their behalf. Is that so or not?

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I apologise to my noble friend if I misunderstood his question. Foreign police may request the assistance of British police. They may not instruct.

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My Lords, is that not a transfer of sovereignty which, under coalition policy, ought to be put to a referendum?

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The noble Lord is entirely mistaken. This is mutual legal assistance between national legal regimes.

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My Lords, does the Minister agree that this is one of a number of steps that will make it more difficult for people to forum-shop for the legal jurisdictions that best suit them?

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It is certainly the case that mutual legal assistance regularises the likelihood of trials taking place in the proper place.

Referendum (European Union) Bill [HL]

First Reading

A Bill to make provision for the holding of a referendum in the United Kingdom on the United Kingdom’s continued membership of the European Union.

The Bill was introduced by Lord Willoughby de Broke, read a first time and ordered to be printed.

Pensions Regulator (Contribution Notices) (Sum Specified following Transfer) Regulations 2010

Occupational Pension Schemes (Levies) (Amendment) Regulations 2010

Motions to Approve

Moved By

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That the draft regulations laid before the House on 1 and 2 March be approved.

Relevant document: 10th Report, Session 2009-10, from the Joint Committee on Statutory Instruments. Considered in Grand Committee on 21 July.

Motions agreed.

Privileges and Conduct

Motion to Agree

Moved By

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That the Report from the Select Committee on Mr Trevor Phillips: Allegation of Contempt (First Report, HL Paper 15) be agreed to.

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My Lords, this report has been made further to the Motion agreed by the House on 25 February of this year that referred certain allegations against Mr Trevor Phillips to the Committee for Privileges, as it then was. The committee, on the advice of the noble and learned Lords, Lord Irvine of Lairg, Lord Mackay of Clashfern and Lord Scott of Foscote, concluded that Mr Phillips was not guilty of contempt of the House. I hope that the committee’s findings speak for themselves and I shall say no more about them at this point.

The committee has also made two substantive recommendations, to which I seek the agreement of your Lordships. The first is that the guidance issued to witnesses appearing before House of Lords Select Committees should in future state explicitly that any contact between witnesses and the committees should be made through the clerk or the chairman. We hope that this will provide greater clarity for witnesses. Our second recommendation is that the Procedure Committee should be invited to consider the procedure to be followed in a case where a committee intends to make personal criticisms of a named individual other than a Minister. We accept that more work is needed before any changes are made to the House’s procedure, but we felt on principle that the issue should be looked at. I beg to move.

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My Lords, I was on the Joint Committee on Human Rights when these allegations were made. We were advised by our clerks that this was a clear breach of privilege. The effect of the lobbying—which there undoubtedly was—was obviously going to be minimal, because the three people whom others attempted to nobble were grown-up and intelligent enough to maintain the views that they had maintained the whole way through the discussion on Trevor Phillips’s behaviour. Admittedly, there was discussion in the committee and some people favoured a harsher report than others, but we came up with what was in effect a unanimous opinion. However, I am quite disappointed—that is the best way to put it—that this is what the Committee for Privileges found. I yield to no man in my admiration for the noble and learned Lord, Lord Irvine of Lairg. He obviously has an extremely clever legal brain, so it would be a foolhardy person who disagreed with what he said. However, at the time it seemed to us that there was a clear breach and I maintain that opinion.

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I will say a few words on the judgment of the committee, because I dissent from it. Perhaps I may take the time of the House to refer to a number of documents that underline my view. Paragraph 21 of the report states:

“We therefore conclude that, however inappropriate and ill-advised, Mr Phillips’ actions did not significantly obstruct or impede the work of the JCHR”.

The judgment of the Committee for Privileges seems to have turned on the words “significantly obstruct”. That should be seen in context. The chairman of the Joint Committee, Mr Dismore, in his submission to the House of Commons Standards and Privileges Committee, stated:

“The Committee’s consideration of its draft report on the EHRC was hampered by Mr Phillips’ actions. We were unable to agree a report on 9 February. Although we did agree a second version of the draft report on 2 March ... I am in no doubt that Mr Phillips wanted either to tone down any criticisms we made of him in the draft Report or to delay the Committee’s deliberations so that we were unable to report before dissolution. Whether or not he was assisted by being familiar with the contents of the draft, he sought to achieve this aim by persuading Members he thought were ‘friends’ that the Committee’s inquiry was unbalanced and was motivated by hostility to him on the part of me or other Members. This represented a significant interference with our work which is why we looked to refer the matter to your Committee”.

The key words in that statement are:

“This represented a significant interference”.

We therefore have the chairman of the Joint Committee on Human Rights saying that, in the view of the committee, this was a significant interference; we also have the judgment of the Privileges Committee that it “did not significantly obstruct”. The matter turns on those words.

However, if we look back to an inquiry that took place in the Commons in 1994, we have some guidance on how the Privileges Committee deals with these matters. I think that it is worth explaining to the House that this matter was dealt with by the Privileges Committee in the House of Lords because the Commons went into recess and was not in a position to consider the matter fully, although it put into the public domain a number of memoranda that had been submitted to the committee for consideration for a report that it subsequently did not produce.

In the Willetts inquiry in 1994, Mr Willetts, a member of the other place, had been accused of trying to nobble the chairman of the Select Committee on Members’ Interests, Sir Geoffrey Johnson Smith. In response to a remit from the House to investigate an allegation of improper pressure brought to bear on a Select Committee, the conclusion of that inquiry was that,

“we have to consider how far the term ‘pressure’ is synonymous with ‘influence’. We recognize that, while assent to or reinforcement by one Member of an opinion held by another could be regarded as influence, something further is required, in the form of a positive and conscious [effort] to shift an existing opinion in one direction or another, for a Member’s words and actions to constitute pressure”.

I argue that there was a positive and conscious effort to shift existing opinion because the draft report of the Joint Committee on Human Rights had, in part, been leaked to Mr Phillips. My noble friend Lord Dubs says no, but perhaps I may refer him to another document, which provides us with evidence of that. It is a submission from Mr Phillips himself to the Standards and Privileges Committee, in which he states that he received a memorandum on 22 March this year. I am sorry to delay the House on this matter but it is extremely important, because it is about nobbling the members of a Select Committee prior to the publication of their report. An e-mail received by Mr Phillips from a member of staff of the Equality and Human Rights Commission dated 6 February 2010 states:

“I was talking to someone this evening”—

that is, a member of his staff is being quoted—

“who had had sight of the current draft of the JCHR report. He said the report, in its current state, was fairly weak and emphasised a few points”.

The leak of that report advises Mr Phillips of the contents that are critical of him, which is why he was seeking to influence the individual members of the committee.

All I am saying to the House is that this is an important matter. We are not going to divide on it, but I believe that the Privileges Committee could have produced a far stronger document. It has not taken into account the precedent of pressure on Select Committee members and I believe that today the House is taking the wrong decision.

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My Lords, it is rare that I intervene in one of these discussions—in fact, I have never done so. However, I feel that I need to because two of our most distinguished Members seem to indicate that the Joint Committee was so wimpish that it could not stand up to being, as it were, lobbied. Who of us has not been lobbied from time to time about the issues that we have been discussing in a committee? I believe that the report before us takes a sensible view of this matter—someone had found out through a leak that they were being strongly criticised by a report, but they had absolutely no way of addressing that matter. That is the main, important recommendation and I congratulate the committee on its balanced report. It takes a sensible view. Furthermore, I say to the noble Earl, Lord Onslow, that I thought that he was a stouter man than that.

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My Lords, rather surprisingly, I go along with what the noble Baroness, Lady Thornton, said. If we read between the lines, it seems clear that the committee found that there was a leak. It gave a good reason for not holding a leak inquiry, which appears at the end of paragraph 17 of the report. However, leaks are extremely serious matters and I believe that a leak inquiry should now be carried out.

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My Lords, I rise rather unexpectedly, because I had not anticipated taking part in the debate. However, I rather think that I was chairman of the Commons Committee on Standards and Privileges at the time to which the noble Lord, Lord Campbell-Savours, referred. I totally take his point that these are important matters and are certainly not trivial. However, I come closer to the noble Baroness, Lady Thornton, and my noble friend Lord Skelmersdale in thinking that the House would do itself no service by disregarding the considered recommendations of a committee containing the noble and learned Lord, Lord Irvine, and my noble and learned friend Lord Mackay. I for one would not wish to participate in any overturning of such judgment.

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My Lords, after an interesting debate, I am not sure that whatever I say will satisfy the noble Lord, Lord Campbell-Savours—possibly not even my noble friend Lord Onslow. However, it might be helpful if I briefly explain how the committee went about its inquiry into the allegations against Mr Phillips.

First, we waited until the Commons Committee on Standards and Privileges had completed its work. Although that committee did not publish a report, its chairman, Sir Malcolm Rifkind, wrote to me to indicate that his committee saw no basis for investigating the allegation further. That letter is on the record. The Commons committee also published extensive written evidence online, which I think is what the noble Lord, Lord Campbell-Savours, was quoting from.

As I said in my opening remarks, we then invited three former judges who sit on the Committee for Privileges and Conduct—the noble and learned Lords, Lord Irvine, Lord Mackay and Lord Scott—to consider the allegation in more detail. Their unanimous conclusion was that no contempt had been committed. The reasons are as set out in the report in detail. It was, however, clear to us that Mr Phillips’s actions were inappropriate and ill advised. He should have known better than to contact members of a Joint Committee with whom he was personally acquainted in order to persuade them to influence a committee in his favour. However, a charge of contempt is a grave one, not to be upheld lightly. In this case, there was a lot of misunderstanding and uncertainty over the rules and no clear proof that harm had been done or that the Joint Committee’s work had been seriously compromised. The noble Baroness, Lady Thornton, made the point that the members of the committee are perfectly capable of standing up for themselves.

I do not think, therefore, that it would have been appropriate in the circumstances to have done anything other than to dismiss the allegations of contempt. It might be interesting for your Lordships to know that there has not been a case of contempt in this House since 1870, when the offender was reprimanded at the Bar of the House. Clearly, it is not something that we do too often.

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Before the Chairman of Committees sits down, would he clarify one point? The fact that the attempt to influence members of the committee was unsuccessful is surely not entirely relevant. The fact that the members were successful in resisting any attempt to influence them is of course important in the outcome, but if someone attempted to bribe a Member of either House but was unsuccessful, would it not still be contempt and a very serious matter? The success of members of the committee in resisting the attempt to influence them is not crucial in this matter, contrary to what the noble Baroness, Lady Thornton, said.

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My Lords, I agree with the noble Baroness that it was the crucial issue in the matter. The report makes it clear that no contempt was committed.

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Before the noble Lord sits down, may I press him? The attempt was successful, because the report was withdrawn and rewritten prior to the general election.

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My Lords, these matters were all looked into by the Privileges Committee and the noble and learned Lords thereon. They were not looking into the content of the Joint Committee’s report as such. It would be quite wrong to suggest that the report had been changed on that account. I certainly do not endorse that suggestion.

Motion agreed.

Energy: Annual Statement

Statement

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My Lords, with the leave of the House, I shall repeat the Statement made in another place by my right honourable friend the Secretary of State for Energy and Climate Change. The Statement is as follows.

“In making this Statement within three months of coming into office, we are signalling the importance of this policy. We are setting out a clear strategy for creating the 21st century energy system that this country urgently needs for an affordable, secure, low-carbon energy future.

We face short-term challenges as a result of the legacy inherited from the previous Government. We have the third lowest share of renewable energy in the European Union of all 27 member states—the same ranking as in 1997. In the longer term, we must meet the challenges of a volatile oil market and increased energy imports. We are taking three big steps: we are creating a market for energy savings through the green deal; we are ensuring a properly functioning electricity market; and we will be strengthening the carbon price.

Our action must be informed by the best information about the future. That is why I am also publishing our work on the 2050 energy pathways. That has been worked up in consultation with industry, scientists, engineers and economists. We are making the data and analysis available and inviting comments over the summer. We want to start a grown-up debate about what the low-carbon future will look like and the best way of achieving it.

Those are possible pathways. We are not claiming to be able to see the future with certainty, but we cannot continue on the current pathway: high-carbon, high dependency on imports and highly volatile fossil fuel prices.

Like the other industrial revolutions, the low-carbon revolution will be driven by entrepreneurs, the private sector, local communities, individuals and businesses, scientists and engineers, not government. However, industry needs stable policy and functioning markets. The role of government is to provide the framework and act as a catalyst for private sector investment. As the 2050 pathways work demonstrates, we need to apply these principles to the challenge of changing fundamentally the way we both produce and consume energy.

The cheapest way of closing the gap between energy demand and energy supply is to cut energy use. We need to address the state of our buildings. We have some of the oldest housing stock in Europe. Our green deal will transform finance for improving the energy efficiency of Britain's homes. It will get its legal underpinning from measures in the first Session energy Bill. We are also accelerating the rollout of smart meters. These provide consumers and suppliers with the information to take control of their energy management. Alongside this Statement, the Government and Ofgem are publishing a prospectus for smart meters which sets out how we will do this.

Openness is important to us, as it is to business and the public. Alongside this Statement, I am publishing an analysis of the impact of energy and climate change policies on both household and business energy bills up to 2020, and I will continue to do so on an annual basis.

At the moment the UK is an economy reliant on fossil fuels. As UK oil and gas production declines, this leaves us more exposed to volatile prices and increasing global competition for the resource. The challenge is to spur the capital investment required for new energy infrastructure. The volatility of fossil fuel prices and continuing uncertainty about the carbon price makes such investment high risk, pushing up costs and slowing development. So the first step is to support the carbon price. In addition, I can announce that we are carrying out a comprehensive review of the electricity market and will issue a consultation document in the autumn. This will include a review of the role of the independent regulator, Ofgem. The Government will also be putting forward detailed proposals on the creation of a green investment bank.

The coalition agreement is clear that new nuclear can go ahead so long as there is no public subsidy. The Government are committed to removing any unnecessary obstacles to investment in new nuclear power. In the memorandum, I have outlined some clear actions to aid this. As a result, I believe that new nuclear will play a part in meeting our energy needs.

In the heating sector, I can confirm our strong commitment to action on renewable heat. The Government are considering responses to the renewable heat incentive consultation and will set out detailed options following the spending review.

The UK is blessed with a wealth of renewable energy resources, both on and off shore. We are committed to overcoming the real challenges in harnessing these resources. We will implement the “connect and manage” regime, and I am today giving the go-ahead to a transitional regime for offshore wind farms. Both these measures will help speed up the connection of new generation to the grid. We remain committed to developing generation from marine energy, biomass and anaerobic digestion. Biomass investors promised help under the renewables obligation will continue to benefit.

We also need incentives for small-scale and community action. We are currently consulting on a new microgeneration strategy. I am today laying an order to allow local authorities to sell renewable electricity to the grid.

Fossil fuels can also have their place in a low-carbon future provided we can capture and store most of their carbon emissions. We will introduce an emissions performance standard, and we intend to launch a formal call for future CCS demonstration projects by the end of the year.

This is a bold vision. We will not be able to deliver it without a 21st century network that can support the 21st century infrastructure. The Statement sets out practical measures that we are taking to improve network access and to begin the building of a truly smart grid.

This vision, however, needs to be grounded in reality. The low-carbon economy must happen, but it will not happen tomorrow. There are potentially 20 billion barrels of oil equivalent remaining in the UK continental shelf, but we must maximise economic production while applying effective environmental and safety regulations. We are doubling inspections of offshore oil and gas rigs and will undertake a full review of the oil and gas environmental regime.

We must also remain mindful of our inherited responsibilities. My department is responsible for managing the country’s nuclear legacy. I am committed to ensuring that these essential duties are carried out with the utmost care and consideration for public safety.

The UK does not stand alone. This Government will work together with our international partners in efforts to promote action on climate change and energy security across the world. We are working hard to put Europe at the front of the race for low-carbon technology. This will help refresh the appetite for action across the world after the disappointment of Copenhagen.

In conclusion, this Statement is about planning ahead, providing clarity and confidence in the policy framework. That is why I am also publishing today my department’s structural reform plan to show how we are carrying out our priorities. Once we have completed the spending review, we will publish a full business plan. At last we have an energy policy with real direction and purpose and a Government willing to take bold steps. I commend this Statement to the House”.

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My Lords, I thank the Minister for repeating the Statement with his usual eloquence.

The Government told us that this would be the greenest Government ever—an ambition which we would and should welcome—but what a disappointment today’s Statement was. I turn first to the long-term transition to a low-carbon economy that Britain needs. Contrary to what the Statement said, the previous Government did have a clear plan—the UK Low Carbon Transition Plan, published in the summer of 2009—which was widely applauded around industry, among employers and green organisations. But the current Government seem determined to unpick it.

The Minister talks about the challenges posed by the legacy that the current Government inherited. As the Energy Minister in the previous Government, perhaps I may remind him that that legacy included a massive development of power-generation infrastructure, with more than 20 gigawatts in the pipeline. We paved the way for smart meters and the smart grid. We had bold policies on microgeneration. We reformed the planning system. We also made real progress on renewable energy, including being number one in the world in operational offshore wind farms.

As for renewables, one of the major problems with onshore renewables was the record of Conservative-controlled planning authorities. Why are the Government abandoning the key measures which are essential to achieving the targets for onshore wind set by the previous Government? We are told that the Government want more wind power, so why have they abolished the local and regional targets to make it happen? On 5 July, the Minister himself said in relation to onshore wind that,

“It is our determination that there should be no dramatic increase”.—[Official Report, 5/7/10; col. 5.]

Given their energy strategy, the Government will be deep in trouble if there is not a dramatic increase. Moreover, if we are to see progress on onshore wind, why are the Government proposing to abolish the Infrastructure Planning Commission and bring major infrastructure decisions back to Ministers? I can tell the Minister with absolute confidence that that will lead only to delay and uncertainty for investors.

The previous Government pledged that the renewable heat incentive would come into effect in April 2011. That could help thousands of consumers who are off the gas network to lower their fuel bills and gain a cash reward for greening their heating supply. Micropower Council’s chief executive has warned that the industry faces a confidence crisis if clarity about the renewable heat incentive is not provided soon. We were set to be the first country in the world to have such an incentive. The Government, however, are not prepared to make a decision. They have again postponed making a decision until after the spending review, so the uncertainty in the industry will continue.

Something positive has finally been said about nuclear energy. The trouble is that no one thinks that the Secretary of State’s heart is in it. We had the usual negative briefing about nuclear over the weekend to pave the way, no doubt, and comfort the Minister’s partners in the coalition. I only hope that this really lukewarm attitude will not dampen investment in the future. Nuclear energy is a vital part of our low-carbon energy mix. It can provide crucial balance to the intermittency of much renewable energy, and it could be a source of huge growth in jobs, in the industry and, crucially, in the development of the supply chain in the United Kingdom. I ask the Minister to understand that the ambiguity of the coalition agreement, coupled with the Secretary of State’s at best lukewarm support of the industry, puts this at risk. I remind him that we said in our national policy statement that we believe that new nuclear could be free to contribute as much as 25 gigawatts of new capacity. Does he agree?

Then there is the issue of Sheffield Forgemasters. The Minister may laugh, but the Government’s handling of the cancelled loan to Sheffield Forgemasters has been quite extraordinary. It has included misleading statements by both the Prime Minister and the Deputy Prime Minister in the other place. Why did the Minister’s department not defend the loan? Did the Secretary of State’s prejudice against nuclear power play a part, or was the decision taken because a high-level Conservative donor in Sheffield lobbied the Government against nuclear power?

We had a Written Statement this morning from Mr Vince Cable saying that affordability is the issue, but it is not true that the loan was unaffordable. Money was set aside in the Strategic Investment Fund, which was announced as part of the 2009 Budget. It was passed as value for money by the Industrial Development Advisory Board at Vince Cable’s own department. Why was it right to give Nissan a grant to make electric cars—a proposal that we support—but wrong to provide a commercial loan to help a British company to be at the centre of the nuclear supply chain? Will the Minister assure this House that funds will be made available if, as was said in the Written Statement this morning, the Government are ready to work with the company?

The Written Statement also referred to the potential of the UK continental shelf, and I would be grateful if the noble Lord could expand on what action his Government propose to take to ensure that that happens. He will be aware of the incentives which the previous Government introduced to help to develop small and hard-to-exploit fields, and I hope that the Government will feel able to continue the work in this area.

In the light of this Statement, the picture for positive government intervention looks bleak. The Government cancelled the £1 billion investment in the green investment bank, and there is continuing uncertainty about the incentive for electric cars and about investment in ports for offshore wind manufacturing. This is a tragedy. The transition to a low-carbon economy offered so much to this country, and the Government are at risk of dashing those hopes.

Finally, on fairness, we all accept the huge challenge of fuel poverty amid the green transition. Why have the Government not confirmed that the coalition will go ahead with the plan for compulsory social tariffs to ensure help to those who are less able to pay their bills? All that can be said is that they await the spending review. I ask the Minister what his plans are for tackling fuel poverty. We heard much about this from noble Lords on the Liberal Democrat Benches when they were in opposition, but they appear nowhere in relation to the green deal.

We had hoped for a major Statement on energy policy. Instead, it looks rather like a disappointing set of platitudes that raise more questions than they answer.

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My Lords, I will try to avoid getting in any cross-party banter, which the noble Lord thinks is appropriate. After all, energy and energy supply require a broad coalition of all parties to deliver the long-term supply to this country. It is ridiculous to have small cross-party scraps and I do not intend to do that. We have been faced with difficult fiscal circumstances, as would the Labour Party had it been in government. Certain things need dramatic and careful looking at in order to see whether we can afford them. Unfortunately, we have gone from a “yes yes” Government to a “perhaps not” Government. If something does not make sense we will not do it.

I take exception to being quoted out of context by Ed Miliband in the other place and the noble Lord, Lord Hunt, over onshore energy windmills. I was clear that we endorsed the scenario of 14 gigawatts, a scenario that was presented to us by the previous Government. I merely said that going beyond that was not our main focus. Our main focus is to build offshore, nuclear, renewables, et cetera. For those who wish to study it, the 2050 pathway—a very impressive discussion document which I commend to the House—will show clearly that in order to achieve our energy commitments by 2050 we will have to push hard on all fronts. That is why I can say with great confidence, and reiterate what I have said earlier, that we are committed to nuclear. One reason for removing the IPC is to deliver much quicker and much more effective planning decisions without the bureaucracy that has been alluded to. In the past few weeks, we have given seven grants to seven British companies to deliver products for the offshore market, so we are very committed to that.

The noble Lord also knows that we take poverty very seriously, which is why yesterday we had a special instrument to extend the work of the current Government, which we applauded, to embrace more people who are in fuel poverty into the net and to give them support in the future. I disagree with the noble Lord on a number of these subjects.

Sheffield Forgemasters is not a matter for our department. It is a matter for BIS. It has been discussed endlessly through various Question Times. Just because a commercial decision was made, it does not mean that our commitment is not to nuclear. I re-emphasise what my right honourable friend the Secretary of State said. We are committed to nuclear and we are committed to it without a subsidy.

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My Lords, having been mentioned by the noble Lord—

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As regards the Statement made by my noble friend on the Front Bench, and perhaps at the risk of being accused of party squabbling, I must say that the party opposite attacking the Government on their nuclear policy takes some beating. The previous Government spent the first 10 years in office believing that they were going to dismantle the entire nuclear industry. It took a lot of argument before they were prepared to change that view.

My noble friend has made a number of important Statements, leading to the Bill and the final Statement in the autumn. It will not be his decision, but will he take note of the fact that this House would very much welcome the opportunity when we resume to debate the Statement that he has made and to express our views on the many issues?

I should like to raise two points. The first is that the Government have inherited a system of support for low-carbon electricity which is in fact fragmented. It is a whole lot of separate systems for different forms of low-carbon energy. Does my noble friend not agree that there is a case not for multiple markets for the different technologies, but a single market for all low-carbon technologies, as was advocated a short while ago in a very authoritative report?

My second point follows up on what my noble friend has said about dealing with nuclear waste. It does not make sense for this very long-term programme, which will stretch over many decades, to be financed on a series of three-year spending programmes. Will the Government take account of that? And when they publish their policy, which I understand will have to be after the comprehensive spending review, there should be a longer term financing structure to fund the Nuclear Decommissioning Authority and the many companies and bodies that work under its authority.

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My Lords—

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My Lords, the noble Lord, Lord Jenkin, as always, has raised some fundamental questions. I hope very much that we will have a debate on the broader aspects of this subject. We will have assimilated and responded formally to the report of the Committee on Climate Change by 15 October, and that will give us an opportunity to have a major debate, as we did last year. On the low-carbon technologies, one of the important things we have announced in the Statement is that we are addressing the carbon price, which is one of the areas that needs to be fixed. I agree with my noble friend that to have one structure is obviously beneficial to the customer, so we will continue to review this. Lastly, we will have a review of spending, but as I said earlier, that will come after the spending review in the autumn.

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My Lords, I apologise for rising, but I thought that the Minister had already answered the question because the Statement included the statements made by the noble Lord. I, too, welcome the commitment to nuclear power, but I wonder whether we will do more than simply build new nuclear plants. Will the science improve sufficiently to lead us to nuclear fusion, because in the long run that is probably the area we need to go into. Are the Government looking at the possibility of researching it?

The Statement says:

“The cheapest way of narrowing the gap between energy demand and supply is to cut energy use. We need to address the state of our buildings. We have some of the oldest housing stock in Europe”.

I am confused. For example, the school rebuilding programme was aimed at addressing some of the worst school buildings, which can waste a lot of energy, but most of the projects that have been cut are those that were most needed. Is there still a commitment to this kind of rebuilding because the condition of some schools is really not good enough? Does the Minister see that the aim of using less energy requires a lot of improvements to be made to our school and other buildings? If so, why have these cuts been made?

Finally, the previous Government were at least committed to ensuring that listed buildings undergoing repairs and being made more energy efficient were able to claim relief on VAT. Some churches and other buildings consume too much energy, so part of helping to address this was to ensure that VAT relief was available. I have not seen anything about that relief in the Statement. Will it continue?

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The comments of the most reverend Primate the Archbishop of York are most welcome. The point about our building stock is that it is very old, and indeed one of the oldest in Europe because we are a mature country. The policy we have announced is the green deal, which will accelerate the use of cavity wall insulation, loft lagging and so on, which reduces carbon emissions and the use of electricity. Obviously this will naturally flow through to many schools and government-owned buildings because we are committed to a 10 per cent reduction in carbon emissions in such premises within 12 months. The issue of listed buildings is a significant problem which is outside my scope. However, it is without doubt a problem if you want to put a cavity wall in a listed building.

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I thank the Minister and congratulate him on the Statement made on biomass grandfathering rights. I am delighted—

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My Lords—

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I congratulate the Minister on the Statement on grandfathering rights for dedicated biomass plant. It is very welcome and an important step forward.

Does the noble Lord agree that the support given for offshore wind through the renewable obligation requirements on energy suppliers is an important element in securing investment in offshore wind; that this is reflected in electricity prices and could reasonably be said to avoid a public subsidy? Does he agree that electricity prices reflect support through renewable obligations rather than public subsidy? If so, do he and his coalition partners in the Liberal Democrat Party agree that this is a potential way forward for supporting nuclear power generation?

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I thank the noble Lord, Lord Woolmer, for his comments. His knowledge of biomass is well known and I defer to no man with greater knowledge. I am glad that he welcomes the Statement on that subject because, as he well knows, it is important that we have ROCs to incentivise and encourage the 400 megawatts of development that we think we can achieve between now and 2013. That is an important and significant step forward. As I indicated earlier, we are committed to nuclear. We shall help nuclear in terms of planning and so on but it will be without subsidy—and an ROC could be considered a subsidy.

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My Lords, the Minister said that he was speaking for a 21st-century energy system. I remind him that in the 20th century the House of Commons Select Committee on Energy recommended a number of things: that we should save energy through the better insulation of houses, factories and public buildings; that we should have more cover from coal generation; and, finally, that we should exploit oil resources in a much slower way. So, basically, we have in the 21st century the same policy as could have been operated in the 20th century if the Government had only listened to the House of Commons Select Committee on Energy. They did not.

Secondly, the noble Lord said that he would welcome comments from all kinds of people in the debate. Can he assure the House that when people say they believe in climate change but do not necessarily believe that it is caused by CO2 emissions from buildings, they will not be called silly names such as “climate change deniers” and that he will have a grown-up discussion with them?

Can the Minister explain why the Government are prepared to subsidise wind power—this point has already been raised—which is the most inefficient kind of renewable power and, at the same time, refuse any subsidy for nuclear power, another renewable source? I am not a great enthusiast of nuclear power but I cannot understand why the Government would want to subsidise an inefficient method and not subsidise a more efficient method.

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Let me first assure the noble Lord that we will not be making any derogatory remarks—or I hope that noble Lords do not hear them from me, anyway—about denial. All views are welcome, and I have invited many noble Lords to the department to hear their views during the past week. We have had views ranging from all sides of the House, both political and in terms of climate change. Those views are fed into our 2050 document and will be treated with the respect that they deserve.

I am glad to have a history lesson on what the Commons did or did not do, but I would take issue on the subject of coal, which is a very dirty and not carbon-friendly product. We need to ensure that it is clean, which is why we are having CCS trial cases, on which we will push the button towards the end of this year. I am delighted that we will have a grown-up discussion on that. We are pump-priming offshore wind technology because, as the 2050 pathway document shows, we need to have energy from many sources. Nuclear is a mature source, whereas offshore wind is not as mature. To see whether it has the economic benefits that we think it has, it must be proceeded with.

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My Lords, a number of questions have been asked of these Benches about our position on nuclear power. It is clear that, as this Statement was made by my right honourable friend Chris Huhne, this reflects Liberal Democrat and coalition policy. It quite happily states the position that we have always had on nuclear power—that we would support it as long as there was no public subsidy. That was repeated in the Statement. So I do not think that any deviation can be claimed from the policy that we have had for a very long time. I have expressed that to the noble Lord, Lord Hunt, on a number of occasions. Personally, I am a nuclear sceptic, but that is a personal opinion.

I welcome this Statement for a number of reasons, not least because, as chairman of the Anaerobic Digestion and Biogas Association, it leads the way to the grandfathering of double ROCs for anaerobic digestion. That will be a very helpful step in decarbonising the gas grid. I have two questions. First, in the rollout of smart meters, will the Minister consider making it a requirement to have a reprogrammable chip in the smart meter? It would be unfortunate if we put in millions of these smart meters and then decided to change their specification—if we did not put in simple technology that we understand so that it can be reprogrammed from outside rather than our having to insert a new smart meter. Secondly, the Government have talked about a consultation document on the roles of Ofgem. Could the Minister also consider a consultation on the roles of Ofwat, which has acted as a massive hindrance to the decarbonisation of the water industry, which is one of the biggest users of electricity and therefore carbon in the country? Will the Minister consider whether, if Ofgem is to be looked at, Ofwat could be not only looked at but probably abolished?

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I shall be brief. I think that the noble Lord’s idea of a chip in a smart meter is a good one, and I shall investigate it. I do not have the answer. I do not recall the smart meter that I have seen having a chip, but it is a very sensible idea.

We are reviewing all the bodies that govern electricity. Ofgem is obviously the primary one, but we have been reviewing all the other bodies to see whether they are fit for purpose and serve the current Government’s requirements.

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My Lords, the Minister has already said that there is going to be no possibility of subsidy, but I suggest that he be very careful about offering some kind of nuclear/ROCs arrangement, because 8 per cent of domestic electricity bills are already accounted for by that form of consumer subsidy and it is therefore very dangerous to put any more on it. If he wants to increase investor confidence in the nuclear industry—I speak as the chair of the nuclear industry—he ought to look speedily at the question of a carbon price and a carbon floor. Could he perhaps provide a paper for us, which would enable us to see the relative merits of the various positions on this? Until this question is resolved, the massive investments which will be required to realise the nuclear ambitions of this country are not going to happen. With that and the Forgemasters decision, we have the kind of climate in which we get the uncertainty that frightens off potential investors, and that mood has to be changed quickly.

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I totally agree with the point made by the noble Lord, Lord O’Neill, on a carbon price floor. As we have committed to in this document, that is something which we will be reviewing with great urgency. We intend to legislate early in 2011 in the energy Bill, having reviewed it during the Recess. The problem with the carbon price, as he quite rightly identifies, is that it has ranged from €30 per tonne in July 1989 to €16 per tonne in July 2009. It is such a volatile price that it makes planning very difficult, particularly in the noble Lord’s sector, so we will be looking at it.

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My Lords—

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My Lords—

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This side!

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Do the Government believe that it is actually possible to meet our energy requirements over the next 30 or 40 years without a new generation of nuclear power stations?

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Perhaps I might draw the attention of my noble friend Lord Maples to the 2050 pathway document. It quite clearly indicates that the best way forward is a mix that includes nuclear, as I have said earlier, and many other types of electricity generation to fulfil the nation’s requirement, which is expected to double by 2050.

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My Lords, I am learning fast what megaphone diplomacy means in this House. First, I take issue with the noble Lord, Lord Jenkin, about the position of the previous Administration on nuclear power. I was one of the Energy Ministers during that first 10 years, and I bow to no one in my support for the nuclear industry. In fact, I was the one who began the process that led to the decision on a new generation of nuclear power.

Can the Minister give some indication of what measures are being taken to reassure the nuclear industry about the new generation of build? It is not enough to say that there will be no subsidisation. The mood music has not been good. In the Statement, the noble Lord referred to the fact that the Government should act as a catalyst for private sector investment but, at the same time, the strongest part of the Statement on nuclear says: “nuclear can go ahead”. If we are to meet our climate change goals, nuclear must go ahead. It will not if the environment towards it is negative. It is a major investment.

The Minister is much more knowledgeable than I am about the climate for investment. However, there are the decisions on Sheffield Forgemasters and the Infrastructure Planning Commission, the coalition with the Lib Dems and the issues around planning—all of us who remember the Sizewell B inquiry know the difficulties around planning for new nuclear. Given that mood music, what reassurance can he give to me and to the House that he will meet with the industry and give powerful signals that will show the scientists—the particle physicists and the engineers who are needed to secure a future for this industry—that it can go ahead?

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I congratulate the noble Baroness for her question. I think that it is her first question and I thank her very much. The fact of the matter is: I am not going to say any more than I have. I have said it until I am almost blue in the face, and we have said in writing that we are committed to nuclear. I am not entirely sure that we are inheriting a paragon of all virtue, as she indicated, or that the Labour Party in the previous Government was so committed to new nuclear. I do not see the country awash with new nuclear power stations. The good thing is that we have three consortia who have announced 16 gigawatts of nuclear energy to be built by 2050. The good news is that it will encourage 30,000 jobs.

Terrorist Asset-Freezing etc. Bill [HL]

Second Reading

Moved By

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That the Bill be read a second time.

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My Lords, the Terrorist Asset-Freezing etc. Bill makes provision for imposing financial restrictions on, and in relation to, certain persons suspected of involvement in terrorist activities, for amending Schedule 7 to the Counter-Terrorism Act 2008 and for connected purposes.

As we are all aware, this month marks the fifth anniversary of one of the worst terrorist attacks in the UK’s history, and the threat to the UK from international terrorism is still judged to be severe. Our police and security services work tirelessly to combat this threat and to reduce it. The Government must ensure that those organisations have the powers that they need to keep people safe, both here in the UK and abroad, while ensuring that we also protect civil liberties.

Asset freezing is an internationally used and recognised tool that aims to prevent and disrupt the financing of terrorism. The United Nations requires that all states,

“Freeze without delay … assets or … resources of persons who commit, or attempt to commit, terrorist acts or participate in or facilitate the commission of terrorist acts”.

Attacking the financial flows between those people is essential. Some of the most devastating attacks in the past decade, including those in London in 2005, cost less than £10,000 to carry out. Around £150,000 is currently frozen in the UK under this regime, so the magnitude of what could be done with such a relatively small sum is clear. By freezing money intended for terrorist purposes, we can help to prevent individual attacks and the devastating injury and loss of life that they may cause. Focusing on the movement of money can also help to detect when it is being used to sustain wider terrorist networks, a crucial element in many investigations, and helps us to maintain effective relationships with international counterterrorism partners. No other tool in the Government’s counterterrorist finance toolkit can fully meet our international obligations in this area.

Against this background, the purpose of the Bill is to put the terrorist asset- freezing regime on a secure legislative footing. I shall explain why this is necessary. The previous Government relied on Orders in Council, made under Section 1 of the United Nations Act 1946, to give effect to the UK’s obligations under UN Security Council Resolution 1373. In February this year, the Supreme Court ruled that, in doing so, the Government had gone beyond the power conferred by Section 1 of the UN Act. Given the impact of asset freezing on fundamental rights, the court concluded that such a judgment on what is expedient should be expressly made by Parliament, not the Executive. The court quashed two of the Orders in Council and, in response, the previous Government put temporary legislation in place to validate those orders until 31 December of this year.

I will now explain the scope of the Bill and its provisions. The Bill focuses on the domestic terrorist asset-freezing regime that the UK is required to have in place under United Nations Security Council Resolution 1373. This is the regime where decisions to freeze assets are taken at a national level, by HM Treasury in the case of the UK, and freezes apply only nationally. The Bill does not cover al-Qaeda and the Taliban. These groups are covered by a separate asset-freezing regime, under UN Security Council Resolution 1267, where decisions to freeze assets are made by the UN and freezes apply globally. That regime is already implemented across the EU by a directly applicable EU regulation.

I should also make it clear that the asset-freezing powers in this Bill are not related to those in the Anti-terrorism, Crime and Security Act 2001, which were used to freeze the assets of Icelandic banks in 2008. That action and the legislation that permitted it should not be confused with the provisions that we are discussing today.

The Bill also includes some amendments to Schedule 7 to the Counter-Terrorism Act 2008. The legislation that we are discussing today makes a number of valuable improvements to the current terrorist asset-freezing regime and I have deposited in the House Library a schedule setting out these changes.

First, it makes the legal test for freezing assets clearer and more consistent with other counterterrorism legislation. The language clarifies but does not change the current legal test, under which past terrorist activity is relevant in determining whether someone is a person who is involved in terrorism. This is not an extension of HM Treasury’s power to designate. Secondly, it focuses the prohibitions more narrowly to minimise the impact on third parties. I will return to this. Thirdly, it makes it clear that state benefits paid to spouses or partners will no longer be caught by the asset-freezing regime. We believe that this is unnecessary to prevent terrorist-financing risks. The Bill is in line with a recent ruling by the European Court of Justice. Fourthly, it improves the transparency and accountability of the regime by requiring it to be independently reviewed nine months after this legislation is passed and every 12 months thereafter. The Bill also formalises the requirement for HM Treasury to report to Parliament on a quarterly basis on the operation of the regime. On Monday, I laid the most recent report before the House. As well as providing useful statistics, it makes it clear that HM Treasury has an active policy of reviewing designations. In the last quarter alone, nine reviews resulted in six delistings.

However, welcome as I hope the changes to the regime will be, I recognise that they do not fully address some of the civil liberties concerns that have been raised about the asset-freezing regime, both in Parliament and in the public consultation that HM Treasury has conducted. Chief among these are the legal test for asset freezing, which stands at reasonable suspicion, and the role of the courts in making and reviewing asset-freezing decisions. Both the use of reasonable suspicion and the role of the courts in these contexts have parallels in other counterterrorism powers.

Your Lordships will be aware that the Home Office’s urgent review of the most controversial and sensitive counterterrorism legislation and measures is ongoing and is likely to consider the appropriate safeguards for executive actions in this field. My ministerial colleagues and I are of the view that, unlike that of previous Administrations, this Government’s approach to counterterrorism measures should be co-ordinated and aligned wherever possible. It is too early to predict the results of the Home Office review but I hope that noble Lords will be reassured that, where the review’s conclusions are relevant to asset freezing, and should those conclusions alter the balance in favour of introducing additional safeguards, we will take them into account and bring forward any amendments that may be appropriate to the Bill. That said, I believe that the approach set out in the Bill is reasonable.

I turn now to points raised by the Constitution Committee in its report on the Bill last week. The committee’s experience and knowledge in this area are extensive and the Government value its input. First, the committee raised a concern that the Bill is partial because it does not include al-Qaeda and the Taliban regime or the freezing powers under the Anti-terrorism, Crime and Security Act. I accept that the Bill does not consolidate the legislation in this area. However, there is a good reason for this. The priority that the Bill seeks to address is the need to put the UK’s domestic terrorist asset-freezing regime on a secure legislative footing by 31 December. As the Constitution Committee’s report rightly points out, this is a tight timetable, even with the present scope of the Bill.

Secondly, the committee raised a concern about why the Bill retains the reasonable suspicion test when other pieces of legislation use reasonable belief. The reason why we have retained reasonable suspicion is that it allows for action to be taken early to meet an imminent national security threat. An example was the use of asset freezes alongside police arrests in 2006 to help to disrupt the transatlantic plane bomb plot. However, as I have said, we will consider this issue further. I agree that, where appropriate, it is desirable to maintain a consistent approach. That is why, rather than taking an independent view of the legal test for asset freezing, we are considering this matter alongside the wider review of counterterrorism powers that is being conducted by the Home Office.

Thirdly, the committee expressed concern that the Home Office review be completed as soon as possible so that any amendments to the Bill can be brought forward in Committee. As the Home Secretary made clear, her review is urgent and will help to inform what additional safeguards, if any, might be needed on asset freezing.

If we are making government amendments to this Bill, we are clear that they should be tabled at Committee stage to allow for full consideration.

Fourthly, the committee raised a number of issues around the judicial process and procedural fairness. I agree with its conclusion that in practice the judicial review process gives the courts a significant scrutiny power and, of course, we welcome that scrutiny, which is fundamental to ensuring that the regime operates in a fair, proportionate and lawful way. The committee has criticised Clause 22 as insufficient in setting out the court’s powers in challenges to decisions. Clause 22 is based closely on Section 63 of the Counter-Terrorism Act 2008, which deals with challenges to financial directions made by the Treasury. We believe that there is merit in having similar provisions governing challenges to these types of decisions and in not introducing ambiguity by having differences between the two provisions. On procedures for the use of closed source material, the Treasury is committed to operating the regime in a way that is consistent with ECHR Article 6.

I will discuss the content of the Bill in more detail, beginning with the provisions under Part 1. The effect of a designation under this legislation 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 a significant financial benefit. This is similar to the effect of a designation under the 2009 terrorism order, but with some significant differences. For example, third parties will breach the prohibitions only if they know, or have reason to suspect, that a designated person will use them in breach of the terms of their asset freeze.

The Bill also provides for licences to permit access to funds and limit the effect of the sanctions, particularly on third parties. It also makes changes to the requirements imposed on the financial and related sectors, which are an essential front line in the fight against terrorist financing. We thank them for the efforts that they continue to make on our behalf, as they bear much of the burden of compliance with this legislation. I am keen to ensure that the burden is minimised, wherever it can be, without increasing any terrorist-financing risks. That is why this Bill will no longer require financial institutions automatically to search historical records for links to designated persons. HM Treasury will remain open to legal challenge to its asset-freezing decisions, including the procedures approved by Parliament in the Counter-Terrorism Act 2008.

Part 2 makes minor amendments to HM Treasury’s financial restrictions powers under Schedule 7 to the Counter-Terrorism Act 2008. These powers are an important element of the Government’s toolkit to deal with risks posed to the UK by money-laundering, terrorist financing and the development or production of chemical, biological, radiological or nuclear weapons. They also enable the Government to take action where the Financial Action Task Force has advised that measures should be taken because a country poses a money-laundering or terrorist-financing risk. The risks that these powers address are of a serious nature. I consider it important that we have robust and effective financial tools to tackle them. In light of this, we have identified a small number of technical amendments to these powers.

First, we are introducing a prohibition on knowing and intentional circumvention of any restriction issued under these powers. This is a necessary deterrent to ensure that a unilateral restriction cannot simply be bypassed. Secondly, we are introducing a provision to allow restrictions to be targeted against subsidiaries of companies based in the country of concern, to reflect the risk that such subsidiaries can pose. Thirdly, we will be clarifying that, when the Government direct a UK financial or credit institution to implement a restriction, they will have to apply it across all their branches, wherever those branches are located. Fourthly, we are making provision for the transfer of responsibility for ensuring the compliance of Northern Ireland credit unions with these restrictions from the Northern Ireland Department of Enterprise, Trade and Investment to the Financial Services Authority.

I am certain that the asset-freezing proposals that I have put before the House will, when passed, create a secure legislative footing for an important and necessary counterterrorism power. The coalition is firmly of the view that such powers are not to be created lightly and we will keep the necessary safeguards under review as this Bill continues its passage. In this Second Reading debate, I particularly look forward to the maiden speeches of the noble Baroness, Lady Hughes of Stretford, and the noble Lord, Lord Davies of Stamford. I beg to move.

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My Lords, I thank the Minister for introducing the Bill. I should say immediately that, as its purpose is primarily to continue the asset-freezing regime put in place by the previous Government, these Benches do not stand in opposition to the essence of the Bill. These Benches have consistently taken a view that a proportionate, strong and effective regime to minimise the terrorist threat is essential for the security of the United Kingdom.

It is of course the duty of the Opposition to oppose and, in light of the coalescence of the two other main parties, that duty may weigh more heavily than under previous arrangements. I draw the Minister’s attention to this perhaps not entirely startling observation for the purpose of lodging a caveat with him in respect of the Committee stage of the Bill. It may be that certain aspects of it will be tested rather more than he might otherwise have anticipated, given the Bill’s original provenance.

As matters stand, there are a number of points on which it would be helpful to have answers from the Minister. When the previous Government brought forward the temporary provisions Act in February, it was stated in another place that the temporary nature of the measures would,

“provide Parliament with the proper time needed to consider and debate permanent legislation in full”.—[Official Report, Commons, 8/2/10; col. 663.]

The Home Office review, which the Minister mentioned, of a number of counterterrorism measures is of course welcome. It would be useful to know its timescale and when its conclusions, either interim or final, will become available. Is the Minister content, notwithstanding the review being under way, that the Bill should proceed on a stand-alone Bill basis? As he accepts that there are now in place a number of terrorist asset-freezing regimes, the question has been raised, as he noted, as to whether a single Act of Parliament might be a more satisfactory and less complex approach to this difficult subject. He has identified that there are, in addition to this Bill, provisions in the Terrorism Act 2000 and the Anti-terrorism, Crime and Security Act 2001.

I note what the noble Lord said in relation to consolidation, but there is also a question which he might wish to consider. As he well knows, there is a grey area between terrorist financing and organised crime. In the review, will there be any consideration of harmonising asset-freezing in these areas?

I note that the Bill contains an innovation on the existing regime in the shape of quarterly reporting and the appointment of an independent reviewer. This doubtless will be in addition to transparency and accountability. However, I examined the impact assessment, but could not find information on the expected cost of this arrangement. Might the Minister assist in identifying the cost of this new office?

I also draw the Minister’s attention to one aspect of the decision in the Ahmed case contained in the judgment of the noble and learned Lord, Lord Rodger of Earlsferry. At paragraph 182, he stated that,

“the harsh reality is that mistakes in designating will inevitably occur and, when they do, the individuals who are wrongly designated will find their funds and assets frozen and their lives disrupted without”—

I stress, without—

“their having any realistic prospect of putting matters right”.

The House has heard arguments in the past about the choice between the current judicial review procedure and the sometimes proposed full merits review. I do not seek to reopen that discussion—but the noble and learned Lord, Lord Rodger, was fully seized of the current judicial review procedure and still identified this concern. Will the review consider this, or does the Minister have an answer at this stage to the concern of the respected and learned Supreme Court judge? I look forward to his answers.

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My Lords, as has been said, it is entirely obvious that one should seek to freeze the assets of terrorists to prevent them accessing funds for the purposes of terrorism; but that, as both noble Lords who have spoken have indicated, does not describe the Bill in full. I appreciate that it was the previous regime, operated in a rather different way from that of the last year or two, that was mauled by the Supreme Court in Ahmed, but it is worth remembering some of the terms that were used, such as “draconian”, “devastating”, “drastic”, “dire” and—not alliteratively—“oppressive”.

Today and during the passage of the Bill we look for assurance that it is not in danger of being found not to be human rights-compliant, not only because human rights and civil liberties are inherently important, but also because, if there is a successful challenge to the Bill, the banks will be open to claims, we will have expensive mechanisms that do not protect the public, and the people who will win—this point was made several times when we dealt with the interim Bill—will be the lawyers, while those designated and their families will suffer. I say to the noble and learned Lord, Lord Davidson, that “coalesced” or not, those behind the Minister will seek to be not just critical but constructively critical.

My first question, which again has been anticipated, is not “Why this?” but “Why now?”. We asked for pre-legislative scrutiny at the time of the temporary provisions Bill. The consultation that has taken place was welcome, but it is not the same. Although we are still dealing with protection against terrorism, the governmental and legislative contexts are different. The coalition Government have made it clear, as the Minister said, that they will be,

“strong in defence of freedom”,

and will introduce safeguards against the misuse of anti-terrorism legislation. The review that is being conducted by the Home Office is due to report in the autumn. I appreciate that some of these terms have wide meanings—I am not sure how long autumn will go on this year—but I hope that the Government will adapt the timetable for the Bill to take account of that review.

I understand the problem of the sunset clause in the existing legislation, but there must be ways of dealing with this in order to get the right outcome for this Bill co-ordinated with the work that is going on in the Home Office. For too many years there has been rivalry between Whitehall departments, and I hope that this is not a case of unnecessary demarcation. The Minister used the words “co-ordinated” and “aligned”. I would have liked to see a single review of asset freezing, but I hope that they will be as co-ordinated and aligned as possible. The remit of the counterterrorism review does not extend to this measure and I hope that the Government will not see themselves as committed to a Bill in these terms if the outcome of the counterterrorism review produces points that should be reflected and included.

The Joint Committee on Human Rights will not have its first meeting until the autumn, and I am sure that it will have comments to make on the Bill, as did the Constitution Committee in what I thought was a very helpful and balanced report. I, too, should like to see plans for the consolidation, rationalisation and, indeed, perhaps reform of everything that ranges over the statue book on terrorism, terrorist financing and asset-freezing. I do not think that the fragmented regime is entirely helpful.

I query whether the Treasury, as distinct from the Home Office, is the appropriate arm of the Executive to deal with these orders but, more fundamentally, I question orders being imposed by the Executive without any judicial input or evidential review. It would be possible, for example, to provide for the courts to deal with an urgent situation on an ex parte application by the Executive and then to take the matter over on an inter-partes basis. Having judicial input at the start would automatically provide a mechanism for appeal, which is also missing from the regime.

The reasonable grounds for suspicion are set at a very low threshold and we will need to be convinced that it needs to be so low. Proving to the court on a balance of probabilities that someone is, or has been, involved in terrorist activity—or, if we are stuck with “reasonable suspicion”, an objective test to so designate a person—would, again, deal with a number of concerns. In Committee, I think we will also want to understand how far in the past the terrorist involvement will need to have been to put someone in danger of having their assets frozen.

There is no connection between suspected involvement and an ability or intention to use assets for terrorist activity. An individual with limited means would have no scope for such use but nevertheless could, by definition, given the issues around benefits, be designated. Should not the Executive be required to show that the individual has access to sufficient funds so that use for terrorist purposes is a possibility—a risk, in other words—that the funds will be so used?

Reference has been made to judicial review. If there were a right of appeal instead of judicial review, that would not jeopardise the making of orders by the Executive. However, I am concerned that judicial review gives no opportunity to challenge the evidence on which a decision is made—not that the designee can be sure on what basis the Executive is basing its decision, given the closed material/special advocate procedures, which, in my view, are inherently incapable of delivering a fair hearing. Special advisers are not accountable and I am unpersuaded by the references that I have read to the Bar Council standards. It has never issued guidance, nor has it addressed the ethical issues, and indeed special advisers are not professionally accountable to those whom they represent.

Judicial review can test the legality—a matter of vires—but, in dealing with the reasonableness of a decision, it is only Wednesbury reasonableness, to use the shorthand. That is not the same as proportionality, which addresses the outcome as distinct from the boundaries to discretion. Nor am I persuaded that quarterly reporting and consideration by an independent reviewer are sufficient. They come after the event; they are not a replacement for an appeal. However, to be more positive, I welcome the provision now in the Bill that benefit payments to spouses and partners will not be caught. That, though, does not address the fundamental point of whether the regime is compatible with fundamental rights. We have a licensing regime, and one must question whether it is possible for that to be effective against somebody who is determined to outwit it.

Human rights were not the basis of the Ahmed case—only two justices thought that the regime would pass the human rights test if brought in as primary legislation. The others declined to deal with this, having decided against the Government on other grounds. We are all aware of the Al-Jedda case, which has gone to Strasbourg on appeal. If it reversed at the same time as this Bill is concluding its passage through Parliament, I am glad I shall not have to deal with that dilemma.

Restrictions imposed in the past have been severe. At the time of the interim Bill, I was shocked to learn that they extended to funding for legal advice and representation. The paper reporting on responses to the consultation stated that controls will remain on any state benefits being paid directly to the designated person. I wonder how one aligns this with the DWP expecting the person to look for work, but perhaps that is a different issue. However, there is a big impact, and a stigma, on the family as well as on the individual.

I appreciate the Government’s commitment to bring forward amendments in time for us to discuss them in Committee. Asset freezing is close to a control order by another name. Those orders are being reviewed, and so should the asset-freezing regime be as part of a single co-ordinated review. I hope that the Minister and the House understand that the points that I am making—and those that others will make—are suggestions of changes to the Bill and approaches to the issue which would make acceptable the necessary freezing of assets. In my view, the Bill has not quite got there.

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My Lords, the Minister rightly emphasises that the threat from terrorism remains severe, and that asset freezing is an essential tool in combating terrorism. However, it is also vital that the measures enacted to deal with this serious problem comply with constitutional principles. It was the failure by the previous Government in that respect which led to the adverse Supreme Court judgment in February, leading to the temporary Bill and to this Bill. That history imposes an especial obligation on this House to scrutinise with especial care the proposals brought forward by the Government.

The Bill raises matters of constitutional concern, as stated in the report of the Constitution Committee, of which I am a member, and to which the Minister has already referred. The first matter of deep constitutional concern is that the Bill covers only some of the powers to freeze the assets of those suspected of terrorism. The Government have retained the separate al-Qaeda and Taliban asset-freezing regulations and have not brought those powers within the scope of this legislation. That is despite the fact that many people are designated under both types of order—that is the al-Qaeda order and this regime. It is particularly unfortunate that some powers remain under secondary legislation when they cannot be amended on a debate in this House or in the other place. There are also the separate asset-freezing powers under Part 2 of the Anti-terrorism, Crime and Security Act 2001 and under Schedule 7 to the Counter-Terrorism Act 2008. The Minister said in his introductory remarks, perhaps somewhat optimistically, that those other statutory provisions should not be confused with the provisions in the Bill. If I may respectfully say so, the Government's approach invites confusion from anyone other than a Supreme Court Justice when attempting to identify how the provisions fit together.

It is of course vital to freeze the assets of those who assist terrorism, but do we really need all these distinct powers? The answer given by the Minister in his opening remarks was to refer to the tight timetable that is consequent on the sunset clause in the temporary Bill. I am puzzled why it is not possible to address the question of drafting—it is a question of drafting—by Committee, which will be more than eight months after the Supreme Court judgment

The second point is the scope of the powers conferred by the Bill. Noble Lords will not dispute the need to enact powers to impose freezing orders against people who have been found to be involved in terrorism. It is of course right that those powers should also be available even if the state cannot prove such involvement. Noble Lords will therefore accept the need to confer such powers in relation to people whom the Minister believes, on reasonable grounds, to be involved in terrorism. The Bill goes much further than that. The Bill imposes those powers in relation to people merely because there are reasonable grounds for suspecting that they are involved in terrorism.

The noble and learned Lord, Lord Brown of Eaton-under-Heywood, said in his judgment in the Supreme Court 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”.

I have difficulty understanding why it should be appropriate to confer those powers in relation to people whom the authorities do not believe, on reasonable grounds, to be involved in terrorism.

There is no international obligation to go this far, as the Supreme Court emphasised in its judgments. There is an issue of principle here, because to freeze a person's assets is a substantial restriction on their liberty. The noble Baroness, Lady Hamwee, has already referred to the comments in the Supreme Court judgments. The noble and learned Lord, Lord Hope, said that those restrictions,

“strike at the very heart of the individual’s basic right to live his own life as he chooses”.

He added that those who are subject to a freezing order are,

“effectively prisoners of the state”.

He pointed out that those powers have a devastating impact not just on the individual but on their spouse and their children.

The noble and learned Lord, Lord Brown, commented:

“The draconian nature of the regime imposed under these assets-freezing Orders can hardly be over-stated”.

I have now referred twice to the noble and learned Lord, Lord Brown. I should mention that he has a lifetime of experience of administrative law and of security issues, having served as Treasury Junior from 1979 to 1984. He sat as a judge for over 25 years. He was the president of the Security Service tribunal and the intelligence services tribunal, and he was the intelligence services commissioner from 2000 to 2006, so he knows what he is talking about.

The Minister’s response to this point in opening—why should these powers be conferred in relation to people in respect of whom there is no more than a suspicion?—was that it was thought appropriate to allow for intervention at an early stage. That fails to address the concern about the impact on a person in respect of whom it cannot even be said that there are reasonable grounds for believing that they are or have been involved in terrorism. Can the Minister also please explain why this Bill, in this respect, is drafted more widely than the relevant provisions of the Anti-terrorism, Crime and Security Act 2001 and the Counter-Terrorism Act 2008, both of which require reasonable belief and neither of which confers power merely by reference to reasonable suspicion?

My third point is to ask the Minister whether he would accept that these freezing orders can be valid as a matter of law only if the individual concerned is told sufficient of the case against him to enable him to have a fair opportunity to respond to the allegations. That was the test laid down by the Appellate Committee of this House in the AF case in relation to control orders. I suggest to the Minister that the same test must apply in relation to freezing orders. I should declare an interest in that I represented AF in the Appellate Committee in the control order case. We will, no doubt, return to these issues in Committee in the autumn, and I very much look forward to the debates. I hope and expect that this House will be as vigilant as the Supreme Court to ensure that constitutional principles are respected.

I have one other question for the Minister. There have been very few changes in the content of the Bill since the draft Bill was published in March, but there is one change of potentially great significance. The title to the Bill has been amended to add the word “etc.”. I was involved in a case in the Court of Appeal in 2007 when Lord Justice Sedley said in his judgment that the court had,

“spent two days hearing argument on the meaning of ‘is’ and ‘where’”,

so much can turn on tiny words. It would be of assistance to know what the Government mean and intend by “etc.”. Is it the intention that this Bill might be the legislative vehicle for bringing before this House and the other place reforms consequent on the current Home Office review of matters such as control orders and pre-trial detention for 28 days? I would be very grateful if the Minister could explain the Government's thinking on this matter.

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My noble friend tells me that a couple of times I referred to “special advisers”; I did, of course, mean “special advocates”.

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My Lords, there is an ever shifting frontier between the activity of terrorists and that of serious and organised criminals, as the example of Northern Ireland has shown us over the decades. To believe otherwise is to engage in delusional thinking on stilts. That said, it is impossible to be comprehensive all the time about every threat related to terrorism and serious crime. It is important from time to time to be highly targeted, as this welcome Bill introduced by my noble friend the Commercial Secretary seeks to be in concentrating on meeting our international obligations to freeze terrorist funds ever more effectively.

Doing this will always be a challenge, however good the legislation, as the sad experience of the Serious Organised Crime Agency has shown us so starkly, with its £0.5 billion annual budget up to 2010 managing to deny access to only approximately £140 million of criminal funds. The Home Secretary, who had a hard-driving tutor when she was at Oxford, is therefore quite right, following her radical, root-and-branch review, to bring this expensive organisation to an end with the setting-up, as she proposes, of the national crime agency. I hope that it will rapidly learn the lessons of the Serious Organised Crime Agency, just as much as they will be pondered by others responsible under this legislation, whether in the Treasury or elsewhere, as they deal with the challenging practical problems of the efficient asset freezing of terrorist funds. It is vital that any strategy includes targeted intelligence gathering, law enforcement action at home, much smarter global regulatory scrutiny, capacity building for other Governments, the protection of charities from terrorist abuse and much more besides.

There is an array of actions to be taken. They include, for example, the breaking of pipelines through which parties move money and manage to operate in mainstream financial sectors, or the exposing of terrorist-financing money trails that lead to hitherto unknown terrorist cells or terrorist financiers before any freezing can be contemplated. Success in these two strands may force terrorists to use more costly and much more dangerous informal means of terrorist financing such as illicit, trade-based commodity systems, ranging from the obvious, such as diamonds, precious metals, narcotics and cigarettes, through to the less obvious, such as trade in honey or even in rare plants.

Fast coming down the track to join these are various forms of cyberterrorism, whose mirror image is cyberfundraising through recruiting of financial supporters. Just as cyberweapons are so much easier to procure—they are more like chemical weapons by comparison to other more general military hardware, let alone nuclear materials—so cyberfundraising is often much easier to achieve and harder to track than the smuggling of the goods and commodities to which I referred.

When in opposition, Members on this side of the House again and again pressed noble Lords such as the noble Lord, Lord West of Spithead, who is not in his place today, to tackle issues such as the performance of the Serious Organised Crime Agency and the threat of cyberterrorism. It was all, alas, to scant avail, as we have seen. By comparison, I greatly applaud the work and effectiveness of the 31-nation Financial Action Task Force, an organisation to which I think my noble friend has made a considerable contribution in the past, together with other organisations whose names we do not often hear aired in your Lordships’ Chamber, such as the Egmont Group, representing about 70 financial intelligence units in the different countries that are members. Only a part of its activity may involve work to disturb channels along which terrorist funds may travel or to aid the seizure of assets, but it is vital among the rest of its work in respect of money-laundering generally.

All that said, I have theoretical sympathy—if one can have theoretical sympathy; looking around the Chamber, I do not see any philosophical tendency on the part of your Lordships to help me with whether I can have theoretical sympathy—with the view of the Select Committee on the Constitution that we should always strive to ensure legal certainty, which is a pretty soundly based principle. The Constitution Committee favours all terrorist asset-freezing measures being in one statute because, if this Bill becomes law, as I hope it will, we shall have a dual regime between the new Act on the one hand and the al-Qaeda and Taliban asset-freezing regulations on the other. This aim to consolidate would be desirable in the longer term, exactly as the noble Lord, Lord Pannick, said in his speech a few moments ago, but we need to get on with tackling the issue as soon as possible through the Bill, as my noble friend Lord Sassoon pointed out.

I end with three more detailed points that verge on questions, which I table now and on which I seek reassurances from my noble friend if he has time at the end of his winding-up speech. First, I assume that Part 1 of the Bill will be extended to the Channel Islands and the Isle of Man by Orders in Council at the earliest possible opportunity, for all the obvious reasons. If that is not the intention, I think that it should be and I wish to know why it is not.

Secondly, Clause 20 lays a duty on the Treasury to co-operate with any investigation into these matters in the United Kingdom—with, I guess at the moment, organisations such as the Serious Organised Crime Agency or its successors—and internationally. However, I seek reassurance that the Treasury has the staffing capacity to co-operate effectively with the other agencies in asset freezing and, in so doing, to put living enforcement and investigatory flesh on the well drafted bones of this Bill.

Thirdly and lastly, Part 2 of the Bill is intended, as I understand it, to deal with financial restrictions on persons connected with countries of concern, specifically in connection with the development or production of the nuclear, radiological, biological or chemical weapons specified in Schedule 7 to the Counter-Terrorism Act 2008. That Act, when it was just a little Bill and was being drafted, did not take any formal notice of cyberwarfare, cyberterrorism, cyberfundraising or whatever you want to call them—threats that, back in 2006 and 2007, were just gathering the momentum that they are now reaching. Perhaps that is why paragraph 1(4)(a) in Part 1 of Schedule 7 to the Counter-Terrorism Act 2008 specifies all the weapons that I have just listed but does not specify cyberweapons of any sort. It should have done so and I hope that this legislative opportunity will be taken, whether under the “etc.” cover or some other cover, to improve the legislation to embrace the cyberthreat specifically.

There are a number of other questions that I would like to ask, but I sense around me a gathering wish and anticipation rather to hear the maiden speech of the noble Baroness, Lady Hughes of Stretford, which I share.

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My Lords, it is with a great sense of honour and privilege that I speak for the first time in this House. I have, as some of your Lordships may know, spent the past 13 years as a Member in the other place and most of that time as a Minister. I thank all my family—especially my husband, my children and my fiercest champion, my mother—for sustaining me through the inevitable ups and downs and constant red boxes of ministerial life. I treasure that experience, although I am already acutely aware, after only a brief period as a Member of this House, that this is a very different place—one where the weight of history, knowledge and experience inspires in me both humility and trepidation. Yet I hope that, with support from your Lordships, I can in time rise to those challenges and make a positive contribution to our collective work here. The astonishing warmth of the welcome that I have been given suggests that that support will be forthcoming.

I am grateful to the Lord Speaker, to my noble friends and noble Lords across the House, and to the staff and the doorkeepers for their generous assistance and for making me feel very much at home. I am especially grateful to the executive officer for Black Rod and the staff in the Dining Room with whom I exchanged numerous e-mails arranging for my very large family to attend my introduction yesterday. They were unfailingly prompt, patient and helpful. I should also like to thank my sponsors, the noble Lord, Lord Laming, and my noble friend Lady Corston, whom I have worked with in previous positions. They are people of great stature and I am honoured that they agreed to sponsor me.

I should like to tell your Lordships that residents in my former constituency, to whom I am also grateful for support over many years, were as delighted as I was at my ennoblement and took it as an honour for the area as much as for me personally. There was intense interest in what my title would be. I did consider Baroness Hughes of Old Trafford, a community in that constituency which is dear to my heart and to which I will refer later. However, as my husband and son are ardent Liverpool supporters and so many people throughout my wonderful region of the north-west of England see everything through the lens of football allegiance, I decided that that would be too contentious, so my full title is Baroness Hughes of Stretford, which honours my former constituents, of Ellesmere Port in the County of Cheshire. The latter is a tribute to my parents, to whom I owe everything. My one regret is that they are no longer here to share this with me.

My parents had no prior association with this House and, both coming from large working-class families in an era when they had no access to higher education, leaving school to work at 14, would have had little chance to do so. However, they wanted the best for their eight children. Although while growing up—10 of us in a little council house—we did not have a great deal in the way of material wealth, we never felt poor. Our parents worked unstintingly to give us everything that they had never had, encouraged us to believe that we could be whatever we wanted to be if we worked hard and gave us strong values of community and family, which have become the bedrock of my political beliefs and are the theme that I want to introduce on what might seem the unlikely topic of anti-terrorism.

As we have heard, the Bill deals with important provisions in the international response to terrorism—that is, the ability to freeze the assets of people suspected of being involved in or facilitating terrorist activities. As a former Minister of State with responsibility for counterterrorism, I am very familiar, as are your Lordships, with the threat faced by the United Kingdom still and I believe that there is a wide consensus in this House and beyond that this country remains a target for terrorists. As the Minister said, the United Nations requires us and other countries to take action, including asset freezing against terrorism, through a series of resolutions that intensified following the attacks of 9/11.

I had some personal involvement in the Government’s response to 9/11 as the cross-government Bill Minister for the emergency legislation that became the Anti-terrorism, Crime and Security Act 2001. As the Minister said, Part 2 of that Act contained provisions for an asset-freezing regime. As we know, the orders that give rise to our proceedings today were made under different legislation—the United Nations Act 1946—and have now been declared ultra vires by the Supreme Court. Hence, the purpose of the Bill is to give comprehensive lawful effect to Security Council resolutions in a proportionate manner, which seeks to strike that difficult balance between executive decisions and some independent scrutiny of those decisions, and the important balance between safety of the public and the freedom of individuals—a balance that is inherently difficult but critically important. These and other national measures that challenge and, if possible—this is the point—prevent acts of terrorism are essential elements in the armoury of counterterrorism. I support them in principle and look forward to hearing the broader arguments about the detail as the Bill takes its course.

Equally important is action at the level of locality and community. It was no accident that my full former title as a Minister at the Home Office was Minister for Counter-Terrorism and Community Cohesion. I think that we ignore the community dimension—and the importance of strong community relations as another effective counterterrorism mechanism—at our peril. That is illustrated nowhere better than in Old Trafford in my former constituency. The community is hugely diverse, with a large number of substantial minority ethnic groups, the largest of which is the Asian community. Because of the conscious efforts of community leaders, especially faith leaders, and their willingness to work with others such as me as the then Member of Parliament, this community as a whole has taken a strong position against acts of terrorism and the ideology that fuels it. I pay tribute today to the imams and ministers who have shown such leadership and courage in challenging members of their own communities. I also pay tribute to Trafford Asian Women’s Network and to local community volunteers from all faiths and none who work to sustain dialogue and good will.

The reach of terrorism is global to local. That is why national measures and international actions such as those that we are discussing today are absolutely necessary, but not of themselves sufficient. Young people now receive information at the click of a key in their bedrooms, linking them to the other side of the world. I was reminded of the potency of this messaging only a few weeks ago when, during the general election, a very earnest young man sought me out to tell me that 9/11 was a fabrication, part of the West’s propaganda to discredit Islam. The most effective challenge to his views came from those of his own community and family in Old Trafford. They were prepared to stand up, tell him that he was wrong and denounce terrorism. I think that it is our job—I certainly saw it as my job—to support those who will do that, particularly with members of their own communities. It is also a key job for government to ensure that all young people, from whatever background, have the same opportunities for success that we all want for our own children. These are themes to which I hope to return as I embark with your Lordships on our work in this House.

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My Lords, it is my privilege and my pleasure to warmly congratulate the noble Baroness, Lady Hughes of Stretford, on her maiden speech. She has come here after a wealth of relevant experience, starting with her academic studies in Manchester and Liverpool, then practical work as a probation officer, returning again to the academic field and then to the House of Commons, as well as to local government where she has a number of important initiatives to her credit. As ultimately the Minister for Children and Youth Justice from 2007 to 2009, her status was recognised in that she attended the Cabinet as well as being the Minister for the North-West. What a tremendous range of qualifications and experience she brings, and indeed what we have just heard in her speech demonstrates how that experience has moulded what she had to say in support of this Bill with its huge implications for the safety of the citizens of the United Kingdom and other parts of the world, including the dependent territories, to which my noble friend Lord Patten referred.

As has been said, the regime dealt with in this Bill is founded on a United Nations resolution. The orders that were made under the United Nations Act 1946 were set aside by the Supreme Court because they went further than the protection that the United Nations resolution required. That may be a wise extension or it may not, and we need to examine this matter quite closely in Committee. However, I do not wish to repeat what has been said so eloquently by the noble Lord, Lord Pannick, on this point.

The main issue that I wish to raise is that of appeal. The provision is for an appeal to be made in the form of an application to be judged by the principles of judicial review. That, I think, would primarily be directed to challenging the making of the order in the first place. However, one has to remember that there are detailed provisions in such an order and the licence which accompanies it in respect of the use of funds. For example, a question may arise about the amount that a designated person needs for his family’s sustenance. The idea that such a case would have to go to the Court of Session, the supreme court in Scotland—the senior court, I have to call it now—or the senior court in England by way of judicial review strikes me as extraordinary. There should be arrangements of a much less legalistic character whereby the case could go, for example, to the county court for the adjustment of matters of that kind. Where the fundamental question concerns the order itself, then possibly the provision made is appropriate, but there should also be some provision for other possible challenges.

When the temporary provisions Bill was being considered, I was not the only one to raise the question of looking at other terrorist financial provisions and serious crime provisions. After all, terrorism is an important species of serious crime and it would seem right that the regime should take account of that and have within it a system which applies—possibly with variations—across the board of serious organised crime and terrorism in particular.

I know that the timetable is restrictive and that not much time exists for the matter to be considered; however, it would be a mistake for this kind of consideration to be dealt with by a department. We are waiting to hear what might happen in the Home Office review and how that may affect our Bill but surely Her Majesty’s Treasury should also be involved; as I understand it, this is a Treasury Bill. If we want a comprehensive system, the review should include the departments with responsibility for operating the whole system and not only a part of it.

As the noble Lord, Lord Pannick, pointed out, there should be a degree of consistency across the systems. I heard it said long ago that a legal system that does not have a logical thread through it is destined for collapse. We should think about that. Indeed, when the orders were set aside by the Supreme Court, it was found that, under the then existing legislation, there was no other option but to put new orders in place. Some people wondered why that was so but the Minister in the Treasury explained it in some detail in the other place at the time. However, it showed that the legislation for terrorism was not comprehensive and certainly not strongly interconnected. It would be a great improvement if it were.

I am sandwiched—pleasantly so—between two maiden speeches. I look forward to the one to follow.

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My Lords, I echo the congratulations that my noble friend Lady Hughes has already received on her first-class maiden speech. The trouble is that, in making my own maiden speech just two speeches later, it is a difficult act to follow. It is also an unexpected honour to follow a distinguished former Lord Chancellor, who made a characteristically authoritative and expertly practical speech about the Bill.

I hope that I am allowed to start by expressing a deep sense of gratitude to the electors of Grantham and Stamford, who sent me to the House of Commons—in the case of the electors of Grantham for the past 13 years and of Stamford and Bourne for the past 23 years. No honour is greater in public life than that of being selected by one’s fellow citizens to represent them in Parliament. I also thank profoundly my wife for her absolutely indispensible and splendid support for those 23 years, sometimes very dramatic, on the Back and Front Benches and in government. I thank the rest of my family as well. As my noble friend Lady Hughes said—and it is true in my case, too—although both my parents are no longer here, I owe them everything.

I thank extremely warmly and very specially my two supporters, my noble friends Lord Temple-Morris and Lord Radice. I do not believe that any new Member joining this House could have had kinder, more stalwart, more conscientious supporters than those. I have been quite overwhelmed, as many of us have in arriving here, by the extraordinarily warm welcome that we have received from everybody, from the Lord Speaker, the Leader of the House, the Leader of the Opposition and noble Lords on both sides of the House, despite the fact that we have arrived in such large numbers in the past few weeks. I am already very grateful for countless small pieces of good advice and help from Clerks, other officials, messengers, waiters, librarians and all those who do such a good job in this place to make our life here more agreeable—and, I do not doubt, to make our activities here more effective than they would otherwise be.

I know that it is a convention of a maiden speech not to be controversial. Although in the course of my political career I have not always been able to avoid controversy or confrontation—indeed, there were moments in life when it would have seemed “abdicatory” or unworthy to have done that—nevertheless, I certainly wish to follow that convention today. I shall make one or two remarks about the Bill in general terms, but I do not think that any of them will be particularly provocative. I shall also make a proposal or suggestion about which I can say in advance with considerable confidence that it is not a matter of public controversy at present because it is not an issue that has been raised in public debate. However, I think that it is an issue that should be raised in public debate, and this Second Reading presents such an ideal opportunity that I think I ought to raise it. I hope that when I do so, if any noble Lord or noble Baroness feels that he or she disagrees with what I say, the disagreement will not be so violent as to make him or her feel frustrated at not being able to jump up immediately to take issue with me.

This is a very important Bill that deserves very careful scrutiny. That goes without saying. It goes to the heart of the liberties of the subject. The idea of a Treasury official by executive order simply paralysing the property of any citizen is a horrific one and in normal circumstances would be intolerable and inconceivable in a free society. Nevertheless, democracy is entitled to defend itself against existential threats, and the situation at present in relation to terrorism is anything but normal. So we have to look at this from the point of view of getting the right balance. That has been the principle governing all the contributions that I have heard on the subject this afternoon.

Clause 22 provides a very necessary and reassuring check on the executive power. There is provision for immediate reference to a court and for immediate judicial review. However, a point that came out of the contribution from the noble Baroness, Lady Hamwee, this afternoon is very important: it must be clear that if such a judicial review is to take place, that court must have access to the evidence on which the Treasury’s decision has been based. If it does not have access to the evidence on which the decision is based, how can it possibly decide whether that decision was reasonable? I would be grateful if the Government can reassure me that that will indeed happen.

There has been no mention at all, in the Bill itself or in the discussion so far, of a matter which your Lordships ought to consider: compensation in the case of an unjust or unreasonable freezing of assets. It is quite clear that any of us, any citizen, could be the object of a terrible mistake—not necessarily a wilful mistake, but a complete mistake. A completely innocent citizen could find his or her assets frozen and consequently incur considerable losses, for example by being unable to meet contractual obligations during the period of the asset freezing. The Bill does not seem to address the issue but I am sure that the House will want to satisfy itself one way or the other on it before approving the Bill in its final form. I might come back to the point in subsequent debates on the Bill.

My final general point on the Bill is that there seems to be something of a consensus in the House this afternoon in favour of a consolidation exercise, because there are clearly so many different instruments which can be used to freeze particular assets of criminals, or terrorist members of al-Qaeda, or otherwise the Taliban, and it is not immediately logical why there should be separate instruments. I had rather thought that the Government accepted in practice the case for consolidation. For example, the noble Lord, Lord Sassoon, defended Clause 22 in its present shape on the basis that its text was identical to that in another, parallel piece of legislation. Once you make that argument, you are basically saying that you really need to have one text. One is therefore making an argument for consolidation. I hope the Government will look again at that issue, and perhaps slightly more urgently than they seem to have done up until now.

My substantive suggestion is that this seems an ideal opportunity to deal with an extraordinary lacuna in the total regime for dealing with criminal and terrorist assets—the lack of any regime whatever to deal with ransoms from hijackings and piracy. It seems to me that those are the proceeds of crime as much as anything else. Indeed, for the victims of a hijacking by pirates, the experience probably does not seem very different from the experience of the victims of terrorists. Yet, at present, we have a growing industry of piracy in the Indian Ocean. People of my generation tend to think of pirates as existing only in fables. I have always thought of Treasure Island when I hear the word pirate, but pirates, as we know, were a real scourge of civilisation in the 16th, 17th and into the 18th centuries, as they no doubt were in previous centuries too. They were largely eliminated in the 19th century by the Royal Navy, often in combination or co-operation with other navies, and it is fair to say that in the 20th century, piracy no longer seemed any more immediate a threat to humanity than the bubonic plague. We took it for granted that it was something in the past.

The 21st century has taught us that that is not correct, and we have a major problem with the growing industry of piracy. There is a problem on both sides, because the risks are minimal to the pirates while the rewards are extremely great. The risks are minimal not because states have done nothing about it; on the contrary, three naval task forces—one EU, one NATO and one American-led—are currently deployed against these pirates. Nevertheless the pirates know that those forces’ rules of engagement are such that no pirate risks being shot unless the pirates open fire first, and although they have made that mistake in the past—the Royal Marines have accounted for a number of pirates, as have the French—no pirates have been lost over the past year or so. The pirates now feel that they have the mastery of that particular game.

Moreover, if the pirates are arrested they are never brought back to this country for trial, because the feeling from the legal advice is that they would immediately ask for asylum and the courts here would give it to them, and that they would remain here for the rest of time. It is not possible to repatriate them to Somalia because there is also legal advice saying that that would be against their human rights. We have a deal with Kenya to accept pirates and put them on trial, but that is an insecure situation; one does not know how long it will continue.

The sanctions are not very great. The danger of any pirate being interfered with by a naval task force is nothing like as great as it ought to be, simply because there is a natural reluctance for any nation state taking part in those task forces to risk its own sailors or marines, except where vessels fly their own flag, although the coincidence of having the right vessel there at the right time so that the nationality of the naval vessel is the same as that of the victims of the pirate attack is a bit difficult to achieve.

On the risk side, the problem is that the risks are not very great. On the reward side, as I have said, the rewards are enormous; I have made some effort to quantify them but I cannot because people are naturally reticent about it. It is clear to me, though, from discussions with underwriters here in London that tens of millions of pounds have been paid by way of ransom quite legally by ship owners and underwriters in respect of ships chartered or underwritten in this country over the past 12 months. The figures are substantial, I am quite convinced—perhaps the Government have some idea of what they are. It would be extremely revealing if we knew what they were.

The idea of taking measures against piracy, sending task forces at great expense, while doing nothing at all about the ransom payments, which can be paid over totally legally, accumulated, managed, transferred and then banked by the pirates, seems to be the equivalent of calling for the fire brigade and continuing to pump petrol on to the flames. There is a complete contradiction here between our apparent determination to deal seriously with the piracy issue and our failure to include it in any terrorist or criminal asset regime. I put that thought to the House, and I look forward to the Government’s response and to taking further part in discussions on this important Bill.

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My Lords, my contribution today will be brief, and much the most important part of it will be to congratulate the my noble friend Lord Davies of Stamford on a fine maiden speech, rich in content and insight. The noble Lord earned a very good reputation in the other place for his dedicated representation of the interests of his constituents, first in Stamford and Spalding and later in Grantham and Stamford.

It should not go without notice that on more than one occasion my noble friend was awarded prizes for being the Back-Bench Member of the year and the independent Back-Bench Member of the year in the other place. This speaks powerfully to his intellect and independence of mind. Not only was my noble friend an outstanding constituency representative in the other place but he went on to hold high ministerial office, which required undoubted integrity, given the extraordinarily important and sensitive issues for which he was responsible.

We welcome my noble friend to this House and to these Benches. He is a true progressive, in the sense of his journey to join us on these Benches. His academic record is very good; he took a first at Cambridge, won awards at Harvard and went on to carve out a highly successful career in finance and economics. Indeed, I recollect in the 1990s sitting at the back of a room at the clearing bank where I worked when we occasionally had a visitation from the then Mr Quentin Davies, who briefed us on his views on the economic and financial situation.

I should also seize this opportunity to congratulate my noble friend Lady Hughes of Stretford on her equally fine maiden speech, which showed the expertise that she will bring to the House’s deliberations. As I sat listening to these two fine maiden speeches, I turned my mind back to my own, which, if I bother to look it up, I imagine I will find a great disappointment—it certainly did not reach the soaring heights that we heard today.

I turn briefly to the Bill. As noble Lords will be aware, I was responsible for taking the temporary provisions Bill through this House in February. The Government acted in good faith in their implementation of the powers which they believed they were able to take under the United Nations Act 1946. However, the Supreme Court advised that, in its judgment, we were relying too much on the facilitating powers of that Act, hence our need to bring a temporary provisions Bill through this House. I thank noble Lords who participated in that debate for their very useful contributions to an expeditious conclusion which ensured that we had appropriate legislative protection in place and a clear commitment that we would bring a fuller Bill back to the House as soon as possible. I congratulate the Minister on bringing the Bill back in this Session and giving us the opportunity for this Second Reading debate.

Measures to prevent terrorist financing are at the heart of international efforts against terrorism. If you read yesterday’s and today’s Guardian you need no reminding of the continuing great threat that our country faces from terrorism. However, our responses must be proportionate and fair and, at the same time, robust and effective. This is a difficult balancing act—to strike a balance between public interest on the one hand and the rights and liberties of individuals on the other. I am most grateful to the Minister for depositing in the Library a schedule indicating the changes to the temporary Bill contained in this Bill. That is a very constructive step by the Minister; it shows that he approaches the Bill with an open and accommodating stance. I know the House will appreciate that.

I welcome several of the improvements that the new Government have made to the Bill, compared with the temporary Bill which I took through the House in February. Spousal and partner exclusion is a particularly good addition. I am also pleased to see the proposals for review and reporting, although I am sure that in Committee the House will test the Minister on the extent of the review and reporting procedures. Perhaps in winding up the Minister could give us a little more of a feel for the identity of the likely reviewer. How do we strike the right balance between a reviewer who is experienced and one who is independent? Is it the Treasury’s current proposal that an existing reviewer should perform that function, or that this presents an opportunity for the Government to bring a fresh view to this task?

The key issue in looking at the Bill has to do with the term “reasonable suspicion”. The noble Baroness, Lady Hamwee, talked about that both in February and today, as did the noble Lord, Lord Pannick, from the Cross Benches. I have reflected long and hard on our discussion of the temporary Bill on this point. I was much taken by the words of the noble and learned Lord, Lord Brown of Eaton-under-Heywood, which were recited by the noble Lord, Lord Pannick, both in the debate on the temporary Bill and today. They are so powerful that I will repeat them as well:

“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”.

As I think more about this, I find myself asking whether there is a better form of words that we should be using here, notwithstanding that I was party to a Government who persuaded the House to support the use of the term “reasonable suspicion” in the temporary Bill. The powers granted to HMT officials are very broad, very pervasive and have enormous consequences. I am not sure that reasonable suspicion is a sufficient test. The Minister will need to satisfy the House—perhaps today, definitely in Committee—that it is not better to use the word “believe”. The Government and the Minister will have to persuade the House that we would wish to grant these powers if the Government could not say that they believed that there was terrorist activity at hand or in prospect.

I am also persuaded that we need to look carefully at the limitations of judicial review in providing protection for those who find themselves in receipt of an order in respect of this Bill. I welcome the Home Office review of counterterrorism powers but I share with others, including the noble Lord, Lord Patten, a view that perhaps the time has come to merge and consolidate. Indeed, in the only political comment in the Minister’s opening remarks, he referred to a lack of coherence and co-ordination in the previous Government’s approach to terrorism. The defence there must be that the situation with terrorism has evolved so radically over the past 10 years that we constantly found ourselves—

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I am extremely grateful to the noble Lord for giving way, but he used my name. When the record is published tomorrow, I think we will see that I said the time was not right for consolidation, and that we should press ahead. I remember that my noble friend Lord Sassoon indicated assent from the Front Bench. Rather than seeking to consolidate now, at a later date it may be entirely suitable to have that certainty to which the noble Lord, Lord Pannick, referred. However, for the avoidance of doubt, I definitely did not say, “This is the Bill, now is the time, get on with it”.

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I am very grateful to the noble Lord for correcting me. He is, of course, absolutely correct. However, the sentiment that there is a patchwork of regulation and legislation is an entirely reasonable one to express. There is considerable merit in pulling all this together in a single piece of legislation at some point. However, if I take myself back to where I was before I accepted the intervention of the noble Lord, Lord Patten, I still argue that this situation will continue to evolve. We may never reach a steady state where we can put in place a single piece of comprehensive legislation which will cope with all possible contingencies and developments, including cyber crime, as the noble Lord, Lord Patten, mentioned, or piracy, as my noble friend mentioned.

I hope that we will not see any reduction in the availability of legal aid to those who find themselves having to defend an action taken under either the temporary Act or the new Bill. I would welcome an assurance from the noble Lord, Lord Sassoon, that there is no intention to reduce the legal aid available to those entitled to it in securing advice and pursuing their right to challenge actions taken under the temporary Act or this Bill.

I am sure that the general sentiment and thrust of the Bill will receive the warm support of the House. However, as they say, the devil is in the detail and, as the noble and learned Lord, Lord Davidson of Glen Clova, said, the House will no doubt wish to pursue a number of issues in Committee.

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My Lords, I welcome the noble Lord, Lord Davies of Stamford, and the noble Baroness, Lady Hughes of Stretford, to the House. Their speeches were very fine indeed and we look forward to hearing from them as we progress through the Bill.

I am not in any way expert in the minutiae of financial services. My area of interest in the Bill arises from my membership of the Constitution Committee and from my engagement with previous security and counterterrorism legislation in this House and beyond. Let me therefore flag up straight away that indeed we need vigorous measures to deny terrorists the finance that they need to carry out their aims. I therefore look forward to working constructively with the Minister on measures which, however, might impinge on the civil liberties of UK citizens, as well as further complicate rather than simplify the range of counterterrorism measures on the statute book.

Before I detail my concerns, I shall say a word or two about the genesis of the Bill. We are told that its measures lie in our obligations under United Nations Security Council Resolution 1373. That was a response within 17 days of the al-Qaeda attacks of 11 September 2001 to the use of international terrorism as a threat to international peace and security, as the noble Baroness, Lady Hughes, reminded us. The resolution was legally binding and imposed on member states a requirement to put in place the necessary architecture to respond to the resolution within 90 days. Given the political climate of the time and, indeed, the wide-ranging ambit of the resolution, it was not unsurprising that UK legislation was drafted in haste. That, and further iterations of it, have now been struck down, and we find ourselves in a position whereby we have to have something on the statute book by December, as the Minister urged.

Nevertheless, the timing of the Second Reading is strange. As many other noble Lords have commented, an urgent review of counterterrorism and security powers is currently being undertaken by the Home Office. I welcome the Minister’s reiteration of the Home Secretary’s assurance that the recommendations of the review will be taken on board, but I for one would have preferred a Bill after the review had taken place to incorporate its recommendations.

In its report, the Constitution Committee takes up the issue of the scope of the Bill, which is only partial, in that its coverage of terrorist asset freezing is intertwined with the provisions of UNSCR 1267. We made the point that having separate statutory regimes for terrorist asset freezing makes the law unnecessarily complex and has not been the subject of adequate parliamentary scrutiny. We may find ourselves in a few months with at least four different pieces of legislation to cover this area and, while I heard my noble friend’s opening remarks, I am not sure that I can see why Resolutions 1373 and 1267 could not have been consolidated.

Let me turn to the reasonable suspicion test in Clause 2. As several other noble Lords have commented, both previous substantive Acts—the Anti-terrorism, Crime and Security Act 2001 and the Counter-Terrorism Act 2008—used the test of reasonable belief. The Treasury argues that this is there to comply with UNSCR 1373. I should declare to the House that I was the officer at the Commonwealth Secretariat in 2001 who was responsible for the Commonwealth ministerial Committee on Terrorism. This group was charged with the Commonwealth-wide implementation of UNSCR 1373. It was not taken by the several Commonwealth countries represented on that committee, all of which have to conform to similar judicial practice to the UK, that Resolution 1373 imposed a threshold as low as reasonable suspicion. Indeed, I do not recall that the UK delegation, which I think was led by the Secretary of State for Foreign and Commonwealth Affairs, wished that to be the case in any form whatever.

I accept that there is a requirement for a preventive regime in Resolution 1373. It is clearly evident in clause 1(a) of the resolution, which requires all states to:

“Prevent and suppress the financing of terrorist acts”.

So I accept that the Bill should have a preventive element in it. The reasonable suspicion test, however, is not the sole means by which we could be compliant with the preventive aspects of Resolution 1373. The Treasury, in its response to consultation published earlier this month, argues that there is a further reason for this test—to meet the UK's national security needs. At paragraph 3.7 on page 9 we are told:

“The Government believes that, to be consistent with UNSCR 1373 … and to meet the UK’s national security needs, the asset freezing regime should be preventative in nature … The Government believes that the ability to act on reasonable suspicion is an appropriate standard”.

I argue that the overall national security threat is best dealt with by the National Security Council and the Home Office, while the Treasury should take a more narrow and technical purview and deal solely with terrorist assets rather than with catch-all phrases under the rubric of national security.

When it comes to EU legislation, we have a long history of gold-plating directives to make them vehicles for a lot of other things that we would like. I caution against doing so with counterterrorism legislation. The Treasury argues that the scale and severity of the threat facing the UK is such that it needs in its toolkit a more robust regime than other countries. I suggest to the Minister that his department might concern itself with the narrow approach to asset freezing that I have suggested and leave the bigger questions to colleagues in the Home Office. It is known for its zeal in bringing forth a deluge of legislation on national security, and I am sure that it will continue to keep a vigilant eye on these matters.

In order that we might be convinced of the scale of the threat, will my noble friend tell us how many people are designated and what is the sum of their assets? Implementation of the UNSCR is an obligation on all UN members, and the Treasury might do well to look abroad for good practice, as we in United Kingdom are not unique. I understand that New Zealand has preventive provisions through an interim order that lasts 30 days and is based on the test of reasonable suspicion, and after 30 days requires the Prime Minister to exercise the test of reasonable belief. That could point to the way in which we might proceed.

I turn to the process issues in the Bill. Clause 22 provides for judicial review. In paragraph 24 of its report, the Constitution Committee states that the court would make a determination not as to whether designation is necessary, but merely whether the Treasury’s decision was reasonable. Clearly, this would be inadequate if a person was unreasonably designated. There are further issues of disclosure and closed evidence that call into question the overall fairness of the role of special advocates. I should declare that I was a member of the Joint Committee on Human Rights when it looked into those matters. I am sure that we will probe all these issues in Committee.

In conclusion, I remind the Minister of the words of his right honourable friend the Secretary of State for the Home Department on 13 July on the Home Office review. She said:

“The review will enable this Government to put right the failures of the last Government and, in so doing, restore the ancient civil liberties that should be synonymous with the name of our country”.—[Official Report, Commons, 13/7/10; col. 798.]

I hope that during the passage of the Bill we will bear in mind those words.

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My Lords, I welcome the Bill as there is a general consensus that greater measures are needed to assist in the fight against global terrorism. Terrorism is one of the greatest threats that we face in the 21st century. This legislation will make an important contribution to our national security by helping to ensure that funds are not used to perpetrate terrorist activities. I also welcome the Government’s strategic defence and security review, as stated in the coalition agreement. We have a duty to our citizens and Armed Forces to shoulder the collective task of formulating a robust security strategy for an increasingly dangerous world. I am confident that this legislation will contribute to achieving this goal.

In overcoming the threat of terrorism, we need clear understanding and constant vigilance. I congratulate the Government on the recent announcement of a successful conclusion to negotiations between the European Union and the United States Treasury on the exchange of information on terrorist finance tracking. One part of frustrating the evil intentions of those who inflict terrorism across the world is to starve them of resources—and this lies at the core of the Bill.

It is timely that we should be considering our approach to the terrorist threat just a few weeks after the fifth anniversary of the 7/7 suicide bombing attacks in London, which resulted in the deaths of 52 people. Thankfully, there has been no other major successful terrorist assault in this country since that day. That has not been because the threat has dissipated, and we should not allow complacency to creep into our considerations.

We should not allow a debate to take place on terrorism—and counterterrorism—without spending a moment reflecting on some of the issues that cause terrorism: alienation, grievance, demonisation, a sense of injustice, whether real or perceived, exclusion and political issues. We cannot expect to overcome the terrorist threat without acknowledging the role that these factors play in motivating the disaffected to move towards violence and terrorist atrocities. We need to examine and find remedies relating to the root causes of extremism and terrorism. Community cohesion and counterterrorism are not the same thing and they should not be confused. They are complementary and there are links. We must therefore regard the two issues in the appropriate manner.

Similarly, we need to recognise that the threat from terrorists arises from a multitude of different areas and groups. Those who are radicalised with terrorist sympathies are not restricted to one particular group, religion or region. At this stage, I should like to follow up on what the noble Baroness, Lady Hughes of Stretford, said and make the point that nearly all Muslims are law-abiding and good citizens who are against any form of extremism and terrorism. However, I appreciate that there is a problem with a tiny minority of people who do not follow the true principles of Islam. Islam forbids any form of suicide bombing. It is, indeed, a religion of peace. For example, when we greet each other, we say “As salaam alaikum”, which means “The peace of God be upon you”. As a Peer, I have a coat of arms, and on it I have two doves because I want to give the message that Islam is indeed a religion of peace.

Clause 1 of the Bill defines individuals who have been labelled “designated persons” by the Treasury. This clause is also of extreme importance in ensuring that we fulfil our obligations in implementing United Nations Security Council Resolution 1373. This provision ensures that asset-freezing measures are applied to groups and individuals who engage in or financially support terrorist activities.

Designated persons can be defined only by competent authorities. However, I feel it is important that all competent authorities in United Nations member states act in harmony to make sure that the necessary procedures are followed to combat terrorism on a global basis. It is important to achieve a degree of consistency in tackling cross-border terrorism. I should be grateful if the Minister could advise your Lordships’ House whether bodies in addition to the Treasury will gain status as competent authorities in the near future for the purposes of this legislation.

Clause 2 covers the Treasury’s power to designate persons. This includes instances when the Treasury has reasonable grounds to suspect an individual or group of engaging in terrorist activities. I am concerned by this requirement, as Resolution 1373 expressly states that the assets of those who commit, or attempt to commit, acts of terrorism should be frozen. The resolution does not extend to those whom competent authorities suspect of terrorist activity. Therefore, the burden of proof is not satisfied under this clause.

Furthermore, we must be mindful that whatever we enact could not be construed as a breach of Article 8 of the European Convention on Human Rights, which states that all individuals are entitled to respect for their family and private life in accordance with the law.

Our criminal justice system is based on the principle that individuals are innocent until proven guilty. Any attempt to interfere with this principle would be to the detriment of our society. Even if a person is proven innocent, there may be a possibility that the person will be branded a terrorist. This could be damaging to a person’s future prospects. Is there any scope for awarding compensation to those who have had their assets frozen prior to acquittal?

Clause 4 states that a designation issued by the Treasury expires within one year unless renewed. The clause gives the Treasury authority to renew a designation at any time before it expires if there are reasonable grounds for doing so. I fear that this clause may encounter the same difficulties as Clause 2. The clause states that a designation may be renewed more than once. However, there is no specification as to how many times a designation can be renewed. I would welcome greater clarification as to the powers of the Treasury concerning the duration. If these powers are wrongly used by those in authority, it could have long-lasting and devastating consequences for individuals and the integrity of this department.

Clause 20 makes reference to the need for co-operation with internal and international investigations. I strongly support this clause; it is in our best interests to work with our European and wider partners to achieve this aim. Foreign policy and national security are intertwined and should be treated as such.

The success of our foreign policy will work to promote our national interests and security both at home and abroad. The question of national security covers a multitude of areas, which is why a narrow approach to this issue has a limited chance of success. Co-operation with our neighbours in the European Union, our partners in the Commonwealth, transatlantic allies and other international organisations is vital to ensuring that we successfully combat terrorism. This threat is not just limited to one continent and therefore requires a multilateral solution. Counterterrorism is dependent on international co-operation, and a vigilance to identify the emerging and constantly altering threats to our security.

I welcome Clauses 33 and 34 as they clearly define the meaning of “funds”, “economic resources” and “financial services”. These are key terms for the purposes of the prohibition stated in Clauses 8 and 9. These two clauses make it an offence for funds and financial services to be made available to designated persons.

At this stage, I would like to declare an interest as I am the chairman of an organisation which provides insurances and financial services. I feel that companies which offer financial services as stated in this clause should be given the appropriate assistance in understanding the requirements of this legislation.

I would be grateful if the Minister could inform your Lordships’ House as to whether any guidance and information will be made available to companies which provide financial services. I wholeheartedly endorse the principles that these measures are seeking to embody in law. We need to maintain our defences and be vigilant in tackling the threat posed by terrorism. We should be robust in seeking to prevent those who cause actual terrorism drawing on the resources that they need to inflict the injury of their design.

I am, however, of the opinion that we must ensure that the provisions of the Bill do not compromise the human rights of law-abiding citizens. This country has a proud history of promoting democratic values around the world and in our local communities. Although we are in a heightened state of security in terms of domestic and external threats, legislation must not be allowed to compromise our civil liberties. It is important to strike a balance to ensure that no ethnic or social group feels as though it is the constant target of discrimination. We must co-operate internationally and focus on marginalising those who idolise or endorse terrorism. We are bound to ensure that we approach the matter in a proportionate, measured and effective manner. It is only through detailed scrutiny that this House can content itself that the Bill meets those tests.

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My Lords, I do not want to detain your Lordships for long. The Bill deals with terrorist asset freezing by the Executive, with the supervision of the exercise of powers by the Executive by review decisions of the court in Clauses 22 and 23 and an independent reviewer of the operation of Part 1 under Clause 25. I am intrigued. Clause 25(5) states:

“The Treasury may pay the expenses of a person who conducts a review under this section and also such allowances as the Treasury determine”.

Is that meant to be pro bono? Who will pay for that independent work if it falls under the Bill?

I support the noble and learned Lord, Lord Mackay, on appeals. The question of whether the assets are too big or small should not be a matter for the Supreme Court to decide; a lower court could probably deal with it.

My main reason for speaking is to support the noble Lords, Lord Pannick and Lord Myners, and the noble Baronesses, Lady Falkner and Lady Hamwee, on what the Bill seems to suggest is the bar in law. “Reasonable grounds to suspect” is far too low. You may not believe it, but you could stop and search only if there were reasonable grounds to suspect. I have been a victim of stop and search eight times on reasonable grounds. I have been stopped; I have been searched. When the policeman suddenly realises that a middle-aged bishop is unlikely to be committing some crime, that has not stopped me being stopped and searched. “Reasonable grounds to suspect” is far too low. All you need to think is: “He does not look like one of us. He surely must be a suspect”. His assets are frozen and it takes a long time before the appeal and review take place. In that time, that person may have been in a very difficult place.

If people’s assets are to be seized and an independent person is to review it, I should have thought that judicial review would be automatic. Otherwise, you have no money, your assets have gone and it is not easy. Again, I am not happy with this very low bar. There should be a prime facie case before a reasonable tribunal can seize your assets. If that is not the case, we are going the wrong way.

I have just been reading the book written by the noble and learned Lord, Lord Bingham, The Rule of Law, where he translates for many of us bits of the Magna Carta. Paragraph 39 reads:

“No free man shall be seized or imprisoned, or stripped of his rights or possessions, or outlawed or exiled, or deprived of his standing in any other way, nor will we proceed with force against him, or send others to do so, except by the lawful judgment of his equals or by the law of the land”.

If it is not his equals who are doing it, then the law of the land has to be quite clear about what it is doing. Listen to clause 4 of Magna Carta:

“To no one will we sell, to no one will we refuse or delay, right or justice”.

He says that these words should be written above the Ministry of Justice because they are far more powerful than the rather mealy-mouthed words that are there at the moment.

Terrorism is a heinous crime. I do not believe that law alone will deal with it, but when you are taken before a court in this country and people are about to seize your assets, you should know that it is being done justly and not simply on reasonable grounds to suspect. The other thing is that, because terrorism is a crime, surely those who are intending to participate in it should be seen as criminals, so the standard needs to be raised and not just simply ignored. If we see to that, we will not run into trouble.

I finish by congratulating the noble Baroness, Lady Hughes, and the noble Lord, Lord Davies, on their wonderful maiden speeches. I was more controversial than they were when I made my maiden speech because it was on the Queen’s Speech, so I could afford to do it. However, I congratulate them and thank them for enlivening our House. I look forward to greater participation in the Bill.

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My Lords, it is my great pleasure to open my speech by offering congratulations on the maiden speeches by Members of my Benches. My noble friend Lady Hughes chose to speak early after her introduction in the House in a debate on an area on which she has considerable expertise. How blessed she is that the opportunity fell to her, but how well she discharged her responsibility and how much we appreciate the fact that she emphasised that all law has to be put in the context of the community that it is there to serve and regulate. She identified a context in which we also safeguard ourselves by the actions that we take in relation to the communities that we serve, as well as by the laws that we enact.

My noble friend Lord Davies threatens to make the name Davies the largest patronymic in the House—that is not something that I could have said before the 1958 Act with regard to life Peers. I welcome him and the great expertise and achievements that he will bring as talents to this House in a range of debates. He quite characteristically did today what I am sure we will enjoy in future: he added a dimension to the debate that might not have been entirely anticipated. I am not sure how the Minister is going to react to the issue of piracy and how it relates to terrorism, but I am certain that what my noble friend identified is a grievance that we all feel with regard to international law and the safeguarding of all who travel on the seas at present. I am grateful to my noble friend for already giving us a flash of the range of inspiration that I know he will bring to subsequent contributions to the House. I am grateful, and quite sure, that both noble Lords will be making their speeches in future with that degree of regularity that we all hope for from those who have a lot to offer.

The Minister engages my sympathy to a degree. After all, only yesterday he was engaged in a major debate on the Finance Bill. It was large enough for him to feel that he ought to break almost all records for a summing-up speech. I hope that we have not presented quite that challenge to him today. Nevertheless, the very late arrival in the list—in fact, in the gap—of the most reverend Primate the Archbishop of York added force on those issues that I know the Minister recognises as critical, which we are all anxious about with regard to this legislation. All I can say to the Minister is that he will have quite an energetic time in Committee. He must hope that the several weeks’ break before we engage in the Committee will enable him to meet the challenges raised today.

Those challenges have come from all sides and rest largely on the issues that the noble Lord, Lord Pannick, was the first to identify. Since he is a member of the Constitution Committee, it is not surprising that he would identify its key anxieties about the legislation, with his dire warnings of the extent to which he might engage with these issues in Committee—as if we ever doubted that they would be discussed thoroughly there.

The important thing about this legislation is that it was somewhat rushed into being following the previous, unsatisfactory position, with the orders being struck out by the Supreme Court. Hurried legislation had to be introduced. My noble friend Lord Myners played his full part in that. I noted in his speech an element of reservation about where we are now. An advantage of being in opposition is perhaps that it gives a little freedom from the constraints of responsibility that affect the Treasury Bench, but my noble friend is nothing except honest in wrestling with these issues.

Nevertheless, the Opposition will need some persuading by those who are advocating significant amendment to the Bill before we subscribe to it. Of course, I recognise the great concern felt about civil liberties and the exercise of the rule of law—it has been expressed with great passion by almost every contributor to this debate—and we all share those anxieties. However, there is also the necessity for our society to defend itself. I understand entirely why the noble Lord, Lord Pannick, and the noble and learned Lord, Lord Mackay, indicated anxiety about reasonable suspicion being the test. The most reverend Primate also indicated from a strong moral base his acute anxiety.

However, an element of this legislation makes it a little different from all other criminal legislation. That relates to the concept of prevention as well as retribution. Governments have as a prime responsibility for the safety of the citizen. That is why the arguments over the great evolution of the law and the developing democracy of the United Kingdom that obtained in the 19th and 20th centuries took a savage turn for the worse as a result of the real problems that terrorism presented for the community. That is why Governments have to act in haste. The necessity of the defence of the citizen is also why the basis of the legislation on which they work may come closer to infringing civil liberties.

If we did not have this debate in this House, our democracy would be all the poorer and I have no doubt that, when the Bill gets to the other end, the other place will benefit enormously from the extent to which we have explored these issues. However, we as the Opposition are concerned about changes to the legislation, although we obviously appreciate that the present Administration are faced with legislation that has a terminal date and must be replaced by this Bill.

I hear on all sides the other great concept—that of getting this issue into a consolidated measure, which would make it so much clearer and more effective in the courts. However, consolidation is no easy matter. The Administration must perforce get this legislation on to the statute book in a limited period because of the sunset clause that was quite properly applied to the legislation that pertains at present.

I say to all noble Lords who have spoken so strongly and so passionately in this important debate that I hope that the Minister will be able to give solace to those who have expressed anxieties. I also hope that the review will be productive enough, and early enough, to inform our Committee proceedings, as that would certainly help us in those proceedings. However, I do not hold out too much hope on the issues of cardinal principle that are contained in this legislation. At present, the Opposition see no difference between the way in which this Government should act and the way in which we acted to protect our citizens when we enjoyed power.

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My Lords, I thank noble Lords for their contributions, which have made for a stimulating and interesting debate and have played an essential role in providing full and proper scrutiny as we embark on this legislation. I am particularly grateful for the support from the Opposition Front Bench.

I opened this debate by observing that this month marks the five-year anniversary of the London bombings. I believe the whole House will agree with me that we must continue to guard against the threat to the UK from international terrorism. Importantly, a number of contributions this afternoon put this whole debate into context. We were reminded of the local and community context by the noble Baroness, Lady Hughes of Stretford, in her very welcome maiden speech; my noble friend Lord Sheikh also addressed this. At the other end of the scale, we were reminded of some of the global contexts, again in a striking maiden speech, by the noble Lord, Lord Davies of Stamford, who referred not least to piracy. My noble friend Lord Patten not only put the debate into its proper global context but even took us into the realm of cybercrime. This context is very relevant and points to the challenges posed by terrorist activity.

In this context, the Government have inherited an asset-freezing regime that is an essential part of the UK’s counterterrorism toolkit but which has not been grounded on a secure legislative footing, an asset-freezing regime which the UK is required to have as part of its international obligations but which exists only under temporary legislation. The debate today has taken us a step closer to resolving this undesirable situation.

The Government have rightly prioritised national security and public protection, and through this Bill we will ensure that suspected terrorist funds cannot be diverted and used for terrorist purposes. This will help to ensure that the UK financial system cannot be abused by would-be terrorists. But this Government are progressive and so is this Bill. It reasonably balances the requirements of national security with protecting civil liberties. It puts safeguards that did not exist under the 2006 order on a permanent and secure footing, and introduces additional mechanisms to assist Parliament in effectively monitoring the asset-freezing regime.

None the less, we have today debated the merits of this legislation and I will now turn to some of the major points raised. I am reminded by the noble Lord, Lord Davies of Oldham, that I might have tested the patience of some Members of your Lordships’ House last night in trying to respond to all the points in a long debate. I hope that noble Lords will forgive me if I do not address every point this evening, but I will write later on points which have not otherwise been addressed.

My noble friend Lady Falkner of Margravine asked about the number of people and the amount of money that was frozen. I mentioned it at the beginning, but I will mention it again. We are referring to only 26 people and only £150,000, but we have to remember that not only were some of those 26 people involved in such planned outrages as the 21 July Tube plot, the Glasgow airport bombs and so on, but that the amounts of money that can do so much damage can be very small. The estimates suggest that the 7 July London Tube bombings cost only £8,000.

Another part of the Bill which has been much discussed is the Home Office review. I will only repeat what I have said before in answer to points raised by the noble and learned Lord, Lord Davidson, my noble friend Lady Hamwee and my noble and learned friend Lord Mackay of Clashfern. The Treasury is working closely and co-ordinating with the Home Office review. The Home Secretary has said that the review will be reported to Parliament after the Summer Recess, which, for the other place, ends rather earlier than ours. I repeat what I said before: it would be appropriate to introduce any government amendments, if we consider them to be appropriate, in Committee.

A number of different questions and comments were raised about consolidation of the legislation into a single Bill, and whether it is counterterrorist legislation or asset-freezing legislation, by my noble friends Lord Patten, Lady Falkner of Margravine and Lady Hamwee, the noble and learned Lord, Lord Davidson, and the noble Lords, Lord Pannick, Lord Myners and Lord Davies of Stamford. At the outset I said that of course there is merit in consolidation, but producing consolidated legislation would be a very significant task. There was reference to eight months having passed since February. It has not been that long since the new Government took office and it would not be a simple matter to put together consolidated legislation. Our priority has to be to get the current legislation in place with appropriate parliamentary scrutiny before 31 December.

I turn now to some of the substantive concerns about the legal tests in the Bill. Understandably, there has been a lot of discussion about the reasonable suspicion test. Questions were raised again by my noble friend Lady Hamwee, the noble Lords, Lord Pannick and Lord Myners, and the most reverend Primate the Archbishop of York in particular. I and the Government very much recognise the concerns that have been expressed, but I have explained and would reiterate the operational benefits of using suspicion to allow early action. But this is a topic that we will consider alongside the Home Office review.

Since there have been quotations from Justices of the Supreme Court, perhaps I may read out something else that the noble and learned Lord, Lord Rodger, said to this point—that,

“it may well be that, in a significant number of cases, because of its variable quality and fragmentary nature, the available information does not permit the Treasury to go further than to say that they have reasonable grounds for suspecting that the person concerned is committing or facilitating terrorist acts. If so, then it may be better to base designation on reasonable grounds for suspicion rather than on some higher standard which could not be readily achieved and which, if applied faithfully, would mean that the Treasury failed to freeze a significant number of assets which were actually under the control of people who committed … terrorist acts”.

This is by no means an easy matter, even for the courts.

A related question was asked by my noble friend Lord Sheikh about decisions breaching or not breaching Article 8—the right to respect for private life. I can assure him that the Treasury considers interference with human rights when deciding to make a direction, and that directions are made only when necessary for public protection. When deciding what is necessary, of course the Treasury carefully balances individual rights against public safety.

A number of questions were put about appeals processes and the question of judicial review. Points were made by my noble and learned friend Lord Mackay of Clashfern and my noble friend Lady Hamwee. We seek to avoid being in a position where there is a need to challenge Treasury licensing decisions. We seek to take a fair and proportionate approach so that challenges are avoided, but if there is a need to challenge, we think that judicial review is the right course. The process can be expedited if the court thinks that there is a need to consider licensing decisions quickly, and indeed the Constitution Committee recognised that the judicial review process is a meaningful scrutiny process. But, again, we recognise that this is an issue to be examined further alongside the Home Office review.

The most reverend Primate the Archbishop of York asked whether judicial review should be automatic. Most UK asset freezes are made at the same time as criminal arrest and charge, so I believe that automatic judicial review would be unnecessary when many people are subject to prosecution for terrorist offences. However, I will take the matter away and think about it further. Another related point was raised by the noble Lord, Lord Davies of Stamford, on the question of whether the court should have access to information considered by the Minister. We expect the court to take a robust approach to any judicial review, examining the evidence on which a decision is made. This would include consideration of closed material so that the court would see all the information seen by the Minister if it wanted to do so. Again, of course, the Treasury in this context always seeks to comply with Article 6 of the ECHR.

The noble Lord, Lord Myners, asked about the availability of legal aid. I remind him that the Treasury has issued a general licence to ensure that, where people are entitled to legal aid, the asset-freezing regime does not prevent them accessing it.

The noble and learned Lord, Lord Davidson, asked a question about innocent people getting off the list. In that context, the noble and learned Lord, Lord Rodger of Earlsferry, was referring to the AQ regime, where the UN has a list of designated persons. The AQ regime is not part of this Bill and I am not sure whether I need to address that point.

The noble Lord, Lord Davies of Stamford, asked what would happen if someone was the subject of a wrongful freezing order. If a person’s asset freeze is quashed, that person can start an action for damages, including for breach of contract and under the Human Rights Act. We invite designated persons to make representations to the Treasury on their asset freeze to enable them to challenge evidence that the Treasury has used.

I am looking nervously at the clock but we may get through the points.

My noble friend Lord Patten referred to the importance of tackling the evolving nature of terrorist finance and questioned the poor performance of SOCA. I welcome his important contribution in recognising the evolving threat of terrorist finance and organised crime. The Government are committed to tackling these threats robustly and are already taking steps to do so. That is exactly what my right honourable friend the Home Secretary’s announcement on 6 July on proposals to establish a new national crime agency seeks to do.

As I said in opening, the financial services sector is very much in the front line. My noble friend Lord Sheikh asked about the guidance that is given to companies providing financial services. I reiterate that we recognise the crucial role that the financial sector plays in implementing asset freezing. The Treasury works closely with the financial sector to provide advice on implementation issues and, in that context, we welcome the input of the British Bankers’ Association to our recent public consultation.

There were a number of questions about the role of the independent reviewer as proposed in the Bill. The noble and learned Lord, Lord Davidson, asked about the cost in relation to the impact assessment, as did the most reverend Primate the Archbishop of York. The noble Lord, Lord Myners, asked about identity and commented on the need for an independent reviewer. The independent reviewer will be reimbursed but I cannot put a figure on it at this stage. In the current fiscal climate it will certainly not be a significant sum in relation to the totality of the impact of the legislation. We shall not appoint a reviewer until the legislation has been passed but, when we do, we will want someone who will be an effective and credible reviewer and who will take an independent stance.

There were a couple of questions on procedural matters, if I may put it that way. My noble friend Lord Patten asked whether the Bill will be extended quickly to the Channel Islands and the Isle of Man. Yes, it will. We are already discussing this with the overseas territories and the dependent territories and we shall seek to ensure that they are covered either by an order made under the Bill or through their own legislation.

This brings me to the question raised by the noble Lord, Lord Pannick—I do not know whether it is the most important point of the day—about the mystery of the word “etc.” appearing in the title of the Bill. That was something that I questioned when the Bill was first presented to me, but I assure the noble Lord that there is nothing behind this, other than that it was added to reflect the amendments to the Counter-Terrorism Act in Part 2 of the Bill. That is why “etc.” needed to be put in the Title. There is absolutely no intention of widening the Bill to include any wider conclusions from the Home Office review or anything. I am sorry to prick that sense of mystery.

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Before the Minister concludes—and noting the arrival of the Chief Whip to provide necessary protection in keeping him within his time limit—I should say that he has given us an excellent summing up of the debate. It has been one of the best that I have heard, and I congratulate him on it. He very kindly referred to my question on legal aid. In fact, I asked him to assure us that there will be no cuts in the legal aid budget and the legal facilities available through legal aid to those who find themselves the target of this legislation, because they are in such a delicate and exposed position that they have every right to be able to secure the very best legal protection.

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I am grateful to the noble Lord, who is doing his best to get me over the 20 minutes. I shall write to him. I shall now conclude, because I am equally nervous about the Chief Whip being here.

This Bill takes the necessary steps to prevent the raising and use of funds for terrorist purposes. I believe that it continues to improve the protection of individual civil liberties in doing that.

Bill read a second time and committed to a Committee of the Whole House.

Academies Bill [HL]

Returned from the Commons

The Bill was returned from the Commons with a privilege amendment. The amendment was agreed to.

Royal Assent

The following Acts were given Royal Assent:

Appropriation (No. 3) Act,

Finance (No. 2) Act,

Academies Act,

Kent County Council (Filming on Highways) Act,

Allhallows Staining Church Act.

House adjourned at 6.53 pm.