Clause 1 agreed.
Clause 2 : Treasury's power to designate persons
1: Clause 2, page 1, line 15, leave out “designate” and insert “make a final designation of”
My Lords, before moving the government amendment, I will make some brief introductory remarks to the Committee. At Second Reading, I explained to the House that the Government took seriously the civil liberties concerns that had been raised about the terrorist asset-freezing regime, and that they were committed to striking the appropriate balance between protecting national security and civil liberties. I explained that the Treasury would do further work over the summer, informed by the wider Home Office-led review of counterterrorism and security powers in considering civil liberties safeguards on asset freezing, and that if any government amendments were tabled to strengthen civil liberties safeguards, this would be done in Committee.
I am pleased to say that the Treasury has concluded its consideration of civil liberties safeguards on asset freezing, and has now brought forward amendments to strengthen safeguards in two key areas. First, we have tabled an amendment to raise the legal threshold for freezing assets from “reasonable suspicion” to “reasonable belief”, with “reasonable suspicion” only able to be used for interim designations of 30 days. Secondly, we have tabled an amendment stating that challenges to Treasury decisions to impose, vary or renew asset freezes should be heard by the courts under an appeal rather than a judicial review procedure. This ensures that there will be a robust, in-depth review by the courts of the Treasury decisions.
I hope that noble Lords will agree that these amendments address the concerns raised at Second Reading, and that they significantly improve the Bill. I know that noble Lords also are keenly awaiting the outcome of the Home Office-led wider review of counterterrorism and security powers, but I cannot provide the Committee today with a date for publication of that review. However, the Treasury's conclusions on asset freezing and safeguards are not intended to pre-empt the Home Office review, which has a separate piece of work. I assure noble Lords that the Treasury's work on civil liberties safeguards has not been carried out in a vacuum. The Home Office and other government departments have been consulted on, and have agreed to, the conclusions reached by the Treasury.
While the Government have an overall coherent approach to counterterrorism powers, this does not mean that each power should be subject to the same civil liberties safeguards, as the appropriate level of safeguards will vary depending on the nature of the power and how it is used. In particular, the Treasury and the Home Office agree that there are significant differences between asset-freezing and control orders, and that in consequence the approach that we take on asset freezing reflects the circumstances of this tool and does not need to be aligned with the Government’s approach to control orders, which is still under consideration.
I turn in more detail to the government amendments to Clause 2. The clause specifies the circumstances in which the Treasury has the power to designate persons. The Bill contains a provision for the Treasury to make an asset freeze on the basis of reasonable suspicion that that person is or has been involved in terrorism. The Government have tabled amendments to Clause 2, with a series of consequential amendments. These allow the Treasury to make an interim designation using the reasonable suspicion threshold for a period of 30 days. The Treasury can only make a final designation—that is, beyond 30 days—if it has reasonable belief that a person is or has been involved in terrorism. For ease of reference, Amendment 2 is the substantive amendment that raises the legal threshold from reasonable suspicion to reasonable belief. Amendments 29, 30, 31 and 32 permit the Treasury to make an interim designation. The other government amendments in the group are consequential and ensure that other parts of the Bill that referred to designations now refer to initial and final designations.
I will explain why we have tabled these amendments. I note that the noble Lord, Lord Pannick, has tabled an amendment on a similar theme, and I look forward to his remarks as the debate continues. We have retained reasonable suspicion for a 30-day interim period because we recognise that there may be occasions when asset freezes need to be imposed where there is a terrorist threat, but when, for example, investigations are continuing and it may not be possible to meet a higher threshold at the time. This was the case, for example, with the asset freezes against the attempted transatlantic airline bombers in August 2006. In these cases, asset freezes were made soon after arrests, to prevent assets being dispersed to associates of the plotters. The police assessed the freezes to be of significant operational impact.
However, the Government are committed to ensuring that, in protecting the public from terrorism-related threats, civil liberties safeguards are not undermined. For this reason, we intend to raise, after 30 days, the threshold for asset freezes to reasonable belief that someone is or has been involved in terrorism. We believe that maintaining the freeze for only 30 days on the basis of reasonable suspicion provides a reasonable period in which operational partners can gather further information and present a case to the Treasury to maintain an asset freeze against the higher legal threshold. Alternatively, if a case cannot be made against the higher legal test, the asset freeze will be dropped.
The test of reasonable belief brings terrorist asset freezing in line with the test used for Treasury powers to freeze assets under the Anti-terrorism, Crime and Security Act 2001, for imposing financial restrictions under the Counter-Terrorism Act 2008 as well as for the test for Home Office powers to proscribe terrorist groups. The proposals are also in line with a number of other countries’ asset-freezing powers.
The test of reasonable belief is also consistent with the preventive rationale of the United Nations Security Council resolution to help to prevent terrorist acts by stopping funds or economic resources being used or diverted for terrorist purposes and the international standards that were set by the Financial Action Task Force, which require asset freezes to be imposed,
“upon having reasonable grounds, or a reasonable basis, to suspect or believe that a person or entity is a terrorist, one who finances terrorism or a terrorist organisation”.
Amending the Bill in this way will allow the UK to maintain an effective asset-freezing regime that meets national security requirements, is consistent with international obligations and standards and meets legitimate civil liberties concerns that reasonable suspicion is too low a threshold for freezing for anything other than a very short period.
The Government do not support moving to a higher legal threshold than reasonable belief, for example by imposing asset freezing only on those who have been convicted of a terrorist offence. Such a move would undermine the preventive nature of the regime and therefore limit the use of asset freezing to protect against national security risks. It would also be incompatible with international best practice and the aims of the United Nations Security Council resolution.
Finally, I should note that we will continue to require the Treasury to consider an asset freeze—be it an interim designation on suspicion or a designation requiring reasonable belief—to be necessary to protect members of the public from the risk of terrorist acts before they can be implemented. The amendments will ensure that an asset freeze will be made only where it is necessary and proportionate to do so and they balance the effect on the individual and the need for public safety. I beg to move.
Perhaps I may be permitted to start the ball rolling before my noble friend Lord Pannick speaks. I am sure that your Lordships are waiting to hear his views, but as I did not have an opportunity to take part in the Second Reading debate, perhaps I may express my views on the amendments first.
The government amendments were published only on Monday, so I saw them only yesterday. We have not had long to reflect on them, but one thing that is clear is that the Government have listened to what was said on Second Reading, they have studied carefully what was said in the excellent report of the Constitution Committee and they may even have had a preview of what the Home Office review will say on the subject. On any view, the Government have kept an open mind on the matter up till now, which should surely be a subject for congratulation. If I may say so from the safety of the Cross-Benches, that makes a welcome change.
The amendments now proposed are so fundamental that at this stage we need another Second Reading debate, particularly in relation to what is proposed in the appeal to the High Court on fact as well as on law. That is a fundamental change of huge importance, and we will come to that later.
On the matters covered by this group of amendments, I start with the new interim designation order. That seems to be the logical starting point, although of course it will come later chronologically as we go through the Bill. There may be those in the Committee who will object to “reasonable suspicion” in relation to the interim designation order. Some may prefer “reasonable belief” in that context, as well as in the context of the final designation order. I do not share that view. Reading the new clause took me back to what I wrote in 1996 on page 86 of my report. I have many spare copies of that report at home if anyone would like to see one. That was of course long before 9/11 and long before Resolution 1373. I said then that there should, exceptionally, be a power to freeze assets before the suspect is arrested or charged. It should be open to the police to go before a judge ex parte—that is, without notice to the defendant—and satisfy him that they have reasonable grounds for suspecting that the defendant is about to commit a terrorist offence. I recognised then that that would be a radical step to take but I said that it was justified because of the paramount need to neutralise terrorist funding before the terrorist offence is committed.
Therefore, I have no difficulty at all with “reasonable suspicion” in relation to the interim designation order. The problem as I see it is somewhat different. If the designee, if I can call him that, is able to go before the judge as soon as he has notice of the order, as is now intended, would it not be altogether more sensible for the judge to make the order in the first place? That is how it is done in other branches of the criminal law, so why not here? What is the reason for the Treasury making the order itself rather than applying in the ordinary way, with which we are all familiar, to the judge? So much for interim designation orders.
I turn to the final designation order. Of course I welcome the change from “suspect” to “believe”, although in practice there may not be quite as much difference between those two things as is sometimes supposed. The real problem here, as indeed in the case of interim designation orders, is that, a fortiori, if we are to impose a permanent designation on the individual, we surely need something much more solid than either suspicion or belief. We need fact. Before we impose a final designation order or final freezing order on all his assets, the defendant must surely have been arrested or charged with some criminal offence. That was certainly my view in 1996 and it is certainly Liberty’s view today in its, as always, excellent briefing paper. However, more important than either of those, it was the view of the noble and learned Lord, Lord Phillips, in Ahmed. In that case, he referred to paragraph 1(c) of Resolution 1373 and then went on as follows:
“Thus what the Resolution requires is the freezing of the assets of criminals. The natural way of giving effect to this requirement would be by freezing the assets of those convicted of or charged with the offences in question. This would permit the freezing of assets pending trial on a criminal charge, but would make the long-term freezing of assets dependent upon conviction of the relevant criminal offence to the criminal standard of proof”.
As I understood the noble Lord, Lord Sassoon, he does not accept that, and he does not accept that that is the view formed by the Supreme Court. But with great respect, it seems to me that that was its view. It comes to this. The noble Lord has gone a very long way to meeting all the problems that we raised on Second Reading and that have been raised elsewhere. But I ask him to go one step further. Can he agree between now and Report that the final orders should be made by a judge on the application of the Treasury? If so, he will have my complete support on that occasion. And more importantly, it will be in line with what I believe was the intention of the Supreme Court in Ahmed.
The reasonable suspicion criterion was a feature of the Bill that caused concern both in your Lordships’ House and elsewhere. Concern was expressed during passage of the temporary provisions Bill earlier this year; expressed by your Lordships’ Constitution Committee; and expressed by a number of your Lordships in Committee. The concern, quite simply, was that the Government should not enjoy the power to freeze a person’s assets, with all the damage and inconvenience that that involves, unless they have at least a reasonable belief that the person concerned is involved or associated with terrorist activity. That is why I tabled Amendment 3, to which the noble Baroness, Lady Hamwee, has added her name. It would substitute reasonable belief for reasonable suspicion.
I am very pleased that the Minister has listened to the arguments. He has accepted that, other than for a temporary period of 30 days, assets should be frozen only when the Government believe, on reasonable grounds, that the individual is involved with terrorist activity. I am sure that all noble Lords will be grateful to the Minister and his team for their response to the expressions of concern, and for the care with which they have drafted and presented these amendments. For my part, I accept that it is appropriate for the Government to have an interim power to freeze assets for a period of 30 days simply on the basis of reasonable suspicion. I accept that because there may be cases when they have only limited information and reasonably wish to act to prevent dissipation of the assets while investigations are concluded. A period of 30 days seems a reasonable time for that interim exercise. Of course an interim order, although undoubtedly very inconvenient for the person concerned, will not have the same draconian effect as a freezing order that continues for a lengthy period. I welcome the government amendments.
There are three points of detail in relation to the amendments in this group. First, it would be desirable for Amendment 29—the new clause which confers power on the Treasury—to make an interim designation to specify the purposes for which the power may be exercised. I am concerned that the drafting does not identify the specific mischief that the interim designation for 30 days is designed to meet. Subsection (1) of the proposed new clause simply repeats the substantive criteria for a final designation save that the criterion for the interim designation is reasonable suspicion rather than reasonable belief.
It is surely necessary to specify in what circumstances the Treasury has a power to make an interim designation. Surely new subsection (1) in Amendment 29 should specify a third precondition after conditions (a) and (b), something to the effect that the Treasury considers that it does not have the information available to reach a conclusion on whether “they reasonably believe that the person concerned satisfies the criteria in Clause 2(1)” and that “the Treasury consider that there is an urgent need” to impose the restrictions for an interim period, while such a conclusion is reached. I invite the Minister to consider that matter before Report.
My second point relates to new subsection (3) in Amendment 29. That prevents the Treasury from making more than one interim designation of the same person in relation to the same evidence. Such a restriction is of course needed to prevent repeated interim designations of the same person for more than one period of 30 days, but I invite the Minister to reconsider the phrase, “the same evidence”. Surely he cannot intend that a second interim designation could be made of the same person simply because there is now an additional piece of evidence which adds nothing of substance. I suggest that it would be preferable to refer in subsection (3) to “substantially the same evidence”.
My third point concerns Amendment 31, which in new subsection (2) addresses the expiry of an interim designation. It states that where an interim designation expires after 30 days, the Treasury must,
“take such steps as they consider appropriate”,
to bring that fact,
“to the attention of the persons informed of the designation”.
I suggest that the Treasury should be held to a much higher standard. Surely, if the Treasury has imposed an interim designation for 30 days, and the interim designation has expired, so that the restrictions on the individual are removed, it should be required to take all reasonable steps to ensure that all those notified of the interim designation are notified that it has ended. After all, the interim designation will not have led to a final designation because, although there was reasonable suspicion, there is no basis for any reasonable belief that the person concerned is involved in terrorist activity. The same point arises in relation to Amendment 32, which concerns variation or revocation of the interim designation.
Subject to those drafting points, to which we may need to return on Report, I am very pleased that the Government have confined final designations to cases of reasonable belief, and have confined interim designations based on reasonable suspicion to a period of 30 days.
My Lords, I congratulate the noble Lord, Lord Pannick, on his energy in tabling Amendment 3 relatively quickly. When I opened all the papers after a break in the summer, I thought that I had better check to see whether any amendments had been tabled, having written “belief” as the first thing in my notes. I found that the noble Lord had got there before me. I am delighted that he did and delighted that the Government have taken the point. It was one of the major points concerning my noble friend Lady Falkner and me, but not the only one. Some of the points that have already been made, particularly by the noble and learned Lord, Lord Lloyd of Berwick, we will come to in later groups of amendments. I, too, welcome what the Government have done so far.
I shall start with a technical point. I hope that the Government and the House will accept that noble Lords may wish to look at amendments to these government amendments at the next stage. I have tripped over this in the past when I have been told that I had accepted a government amendment in Committee. There is plenty that is worth further debate now that we have had more of a chance to consider them. The critique by the noble Lord, Lord Pannick, of Amendments 29 and 31 goes to that point.
On a general note, the Minister referred to the counterterrorism review. One point that he did not cover when addressing whether asset freezing should fall within the review is the different regimes for asset freezing. The differences between the regimes continue to be troubling.
There is a difficulty in how one splits between this group and the third group one's points on whether the decision should be an executive decision or a judicial decision. I recognise the need for speed. The courts are capable of speed and, as has been said, could deal with an ex parte application by the Treasury in order to take what one might call precautionary interim steps in order not to find that the prospective designated person has outwitted them. Our amendments show that I was prepared to contemplate an initial designation by the Executive, subject to an application to the court, which is our third group, but I remain concerned about whether this should be an executive matter or a judicial matter. In this speech, I shall not cover reasonable suspicion for the 30 days as I hope my noble friend will refer to that in a moment.
If I use the term “draconian” for the asset-freezing regime, I will be told that that applied to a previous regime and that the licensing that the Treasury now implements is more benevolent, but I do use the term because I still see asset freezing as very close to control orders. The noble and learned Lord, Lord Brown, said that in one of the cases that we have referred to. He said:
“In certain respects, indeed, they could be thought to be even more paralysing”.
However you analyse the differences, asset freezing is very close to the restrictive end of the spectrum, with an impact not only on the designated person but, as we will come to in more detail later, on that person’s family. Standing back from the technical words, we can think about living in a family where the main breadwinner is not able to function and the impact that that has on the way the whole family operates, the stigma attaching to it and the relationships with the outside world. If I were the spouse of a designated person, I would not want to go shopping in a supermarket feeling that everybody in my community was looking at me. If I were the child of a designated person, I would be really worried about going to school. The prospects for bullying and so on are enormous. That is not to say that we should not protect the public, but we have to bear that other side in mind. The existence of designated persons under an asset-freezing regime is an existence rather than perhaps full life.
It comes down to whether we think the prime responsibility should be that of the Executive or of the courts. For the reasons that I have given, I continue to believe that the impact should be a judicial responsibility. Is it appropriate? Recognising the objective, is it even proportionate for the Treasury to be both the accuser and the judge?
My Lords, I was not able to take part at Second Reading, which I regretted as, when I sat in the seat now occupied by the noble Lord, Lord Davies of Oldham, I covered the terrorist asset emergency legislation earlier in the year. I have of course had an opportunity to read that very good Second Reading debate. Despite the fact that I have now moved to this side of the House, had I taken part in the debate I would have regretted that the Government had not moved on from the formulation of asset freezing bequeathed by the previous Government and my tone would have been probably somewhat critical of my Front Bench. So it is a great delight to me to find that the Government have tabled the amendments in this group. They show that the Government have listened to some of the concerns from the civil liberties groups and from noble Lords and noble and learned Lords. In particular, I believe that the belief formulation is superior to the suspicion formulation, and the interim designation solution is a practical response to the issues that have been raised.
The noble Baroness, Lady Hamwee, raised an important point on amendments to amendments. My noble friend will be aware that if we accept these amendments in practice without agreement, there can be no further amendments. But the Government tabled these amendments particularly late—even later than normal for a Government to table amendments. Conjoined with the fact that when they were tabled we were still in recess, and for many of us it was difficult to access things, I hope that my noble friend will accept that it is reasonable for your Lordships’ House to discuss the substance and the detail of the points that come up in relation to the amendments, which I am reasonably confident your Lordships' House will accept this afternoon. It would not be right to stand on the formality that, having accepted the amendments, we can no longer discuss them in the later stages of this Bill.
Having said that I support the amendments in this group, I have one question for my noble friend. It will be interesting to see how these interim designations are used in practice and whether they are converted to final designations. Under Clause 24, there is to be a regular Treasury report on the use of the powers in the Bill. Will my noble friend assure me that that report will cover the extent to which interim designations are converted into final designations? We would want to have some assurance that the power that is being used in relation to interim designations was sufficiently robust and did not fall significantly short of the standard that we would regard as acceptable for draconian actions to be taken in respect of people’s assets.
Finally, picking up on what my noble friend said about the Home Office review, I think he led the House to believe at Second Reading that that review would be available before we returned. He referred specifically to the Commons Summer Recess ending before we returned. It is a considerable disappointment that we do not appear to have that review available for our Committee stage. Is it possible that we will have that Home Office review before finalising the remaining stages of this Bill? It would be disappointing if the Bill left this House without sight of that review. In particular, although my noble friend referred to the fact that it concludes that there are enough significant differences between the control order regime and the asset-freezing regime, many of us remain to be convinced of the translation of that into legal effect. We would value looking at the arguments and analysis that led to that conclusion.
My Lords, in the debate on Second Reading on 29 July, I supported the noble Baronesses, Lady Hamwee and Lady Falkner, and the noble Lords, Lord Pannick and Lord Myners, in suggesting that “reasonable suspicion” provided too low a threshold for action that would violate a person’s liberty, privacy and financial interests. I prefer the term “reasonable belief”. The difference between the two is that reasonable suspicion means that something may be so, whereas reasonable belief means that something is so. To me, the distinction is important. However, I congratulate the Government because at least they listened to the debate. The noble Lord, Lord Sassoon, argued in his reply that the test of reasonable suspicion was necessary to allow preventive action to be taken before any terrorist acts were actually committed. He cited the freezing of assets in connection with the transatlantic bomb plot in 2006. However, he indicated that he had listened to the arguments.
Last Friday the Government tabled their amendments, which essentially create a distinction that I think is probably reasonable. The amendments create an interim designation that would expire after 30 days and a final designation that would be made subsequently. New clauses inserted after Clause 5 state that the test for an interim designation would be that of reasonable suspicion, while Amendment 2 amends Clause 2 to provide that the test for a final designation would be that of reasonable belief. This provides a way of allowing preventive freezing through a lower threshold of proof for a limited period.
The noble Lord, Lord Pannick, and the noble Baronesses, Lady Hamwee and Lady Falkner, have tabled an alternative set of amendments that would apply a more rigorous test by substituting the test of reasonable belief in Clause 2—Amendment 3—and by providing that designation should expire after 30 days unless confirmed by the High Court. This would bring judicial review forward to an earlier stage in the proceedings and make it automatic rather than dependent on the lodging of an appeal.
I have only just seen these amendments with the publication of the Marshalled List, but my initial inclination is to think that they do not meet the point about preventive action, which is at the heart of the Bill. Noble Lords will remember that UN Resolution 1373, adopted in 2001, required member states to prevent the financing of terrorist acts, including the freezing of funds, and to prevent their nationals and those within their territories from making funds and resources available: so it was intended to prevent actions. On that particular bit, I am happy with this two-pronged approach: first, an interim designation, and then after 30 days an actual designation. But I am not sure why the final designation is not to be made by the High Court. Why have we not gone that little bit further? I understand the interim designation because we need to stop people, as the United Nations requires us to do. Indeed, we are here today simply because the Supreme Court has ruled that the orders that have been made by Order in Council should not have been made in that way. It said not that they were not right but that they should have been made through an Act of Parliament. I suggest that, in keeping with UN Resolution 1373, and with Resolution 1452 in December 2002, the interim designation that is being attempted here goes a long way to meet my concern last time, but I am not so sure why, after a period of 30 days, the designation will not be made by the High Court.
My Lords, I join others in giving credit to the Minister for the changes that have been made on the issue of reasonable suspicion and reasonable belief. When I was a Minister, I came to recognise that officials’ favoured recommendation on any amendment or discussion in this House and probably in the other place is “resist”. It is much to the credit of the Minister that he listened carefully to the arguments and has brought forward a constructive proposal.
It is clearly the case that you can reasonably suspect something without necessarily believing it, as the Minister’s proposal acknowledges. It is possibly churlish, therefore, to find any fault. However, I have a reservation that the proposed interim test may now be recognised as rather simple and could be used for a fishing trip to flush out further evidence during the period. It will be interesting to hear the Minister’s response as to how we can be assured that the test of reasonable suspicion will be implemented with appropriate respect for our intention in that regard.
I hope that the Minister will also confirm that the acceptance of these amendments today will not limit further discussion on Report. Other Members of the Committee have noted that these amendments, constructive and welcome as they are in most respects, have nevertheless been tabled quite recently. As the noble and learned Lord, Lord Lloyd of Berwick, indicated, they give rise to significant issues, which Parliament should be expected to consider carefully.
I add my support to the observation of the noble Lord, Lord Pannick, about the protocols that will apply in a situation in which an initial freezing might be extended. The noble Lord is right to say that that should be done not simply on the basis of there being new evidence but on the basis of substantial and material new evidence. This is to ensure that the abuse that the Government have in mind—the granting of successive interim orders without ever having to go to the test of reasonable belief—is addressed. The noble Lord’s suggestion in this respect is entirely consistent with the grain of the Minister’s thinking.
As the Minister who took the temporary Bill through this House earlier this year, with the noble Baroness, Lady Noakes, responding on behalf of what was then the Opposition, I agree that the Minister has presented us with a significant improvement on that legislation.
I agree with everything that has been said by everyone—including the congratulations to the Government—and I can therefore be extremely brief. I rise not to hear the sound of my own voice but to make two points. First, the Joint Committee on Human Rights was formed only a couple of weeks ago and will consider this debate and the amendments when it meets next week, after which it will report. As a member of the committee, I feel that that is a further reason for supporting what has been said by three contributors—my noble friend Lady Hamwee, the noble Baroness, Lady Noakes, and the noble Lord, Lord Myners—about the importance of being able to return to these matters on Report. Although the Constitution Committee produced an important report, I am sure that Members of the House would like to be informed about the human rights implications.
Secondly, the original Explanatory Notes on the Bill were rather brief in dealing with the human rights implications. I believe that a more detailed human rights memorandum was submitted by the Treasury on 13 August. I have asked in the Printed Paper Office for a copy but it does not have one. Will the Minister indicate the need for that to be made available before final decisions in this House are taken? As it is not there now and I have not had the benefit of seeing it, I certainly do not feel as well informed as I would like to be.
Lastly, could the Minister say something about the important decision of the European Court of Justice in the Kadi No. 2 case last week, which found in favour of the applicant in a terrorist asset-freezing context and insisted on writing strong safeguards against abuse into the United Nations framework? Again, the House needs to be informed about that in considering on Report the implications of the most welcome amendments that have been put forward but which have been subject to powerful criticism and questioning by members of the committee.
My Lords, I declare an interest as the shortly outgoing independent reviewer of the Terrorism Act 2000 and some connected legislation. I, too, congratulate the Minister, my noble friend and the noble Lord, Lord Pannick, on the work that has been done to produce the outcome that we have today. We are concerned here about aspects of the public interest and particularly national security. There is a clear paramountcy in ensuring that assets are not used to fund terrorism; the issue is the proportionality of the efforts undertaken to prevent that from happening.
I am sorry that I was not able to be here to speak at Second Reading. I shall simply add one sentence to the few remarks that I wish to make on this amendment, which is ever so slightly out of order. I note that Clause 25 makes provision for an independent review of the provisions contained in the Bill. It is not inevitable that the same independent reviewer as reviews other counterterrorism provisions should review these provisions, but for efficiency and consistency it would seem sensible that the same person should do it—it will not be me because I shall be going out of office shortly—because there are similar issues to be considered in relation to both pieces of legislation.
I agree with those who have said or implied that consistency of standards of proof is required wherever possible and that those standards should be as high as is proportionate and consistent with the national interest and the issues that we are concerned with. It is my view that reasonable belief might be transliterated elsewhere in raising the standard required in other aspects of counterterrorism legislation. I certainly welcome it.
The noble and learned Lord, Lord Lloyd of Berwick, raised early in this debate the issue of orders being made by judges rather than by the Executive. I do not have a very strong view about that, save to point at the evidence. Like it or not, if one looks at the control orders regime, one sees that judges have shown themselves to be extremely robust about the orders and the conditions applicable to them in rejecting executive acts or amending those that have taken place. That separation between an order made by the Executive and a review by the judiciary on whatever basis seems to work and does not need to be changed. There is a tried and tested process whereby judges, with the help of special advocates—I admit that their activities could be improved if greater assistance were given to them—reach decisions that robustly protect the rights of the individual.
There are no other orders that are comparable with these, so any other context would seem to me not to be relevant. I say that with great respect to the noble and learned Lord. We are talking about a pretty special form of litigation and legislation.
I close simply by saying that a useful decision has been reached and the Government have shown themselves, in this instance at least, to be very responsive to the informed opinion that was given at an earlier stage in this Chamber.
My Lords, I add my voice to the chorus of those congratulating the Minister on having contemplated our views over the summer and having come up with these clauses. Before going into the substantive points that I want to make, I will touch on the technical point of amendments to amendments and hope that we will be able to revisit it. I went to the Table Office, or duty Clerk’s office, on Monday at 4.20 pm and was told that even on that day I was already too late. I received the letter from the Minister detailing his reasons for these amendments—it was very gratefully received and I cannot thank him enough for it—at 6.30 on Monday evening. For obvious reasons, it had not yet been placed in the Library, so there was absolutely no possibility of scrutinising the amendments with a view to doing anything about them.
On the test of reasonable suspicion, the Minister said in his opening remarks that we should not use the same level of safeguard across all legislation. That somewhat concerned me because, as other noble Lords have said, there is nevertheless a relationship with the control orders regime. My noble friend Lady Hamwee has referred to the Supreme Court’s rulings in the Ahmed case, where the noble and learned Lord, Lord Rodger, said 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 … having any realistic prospect of putting matters right”.
I accept that this will now apply only for a period of 30 days, but when your employer and all and sundry around the work that you do are told that your assets have been frozen on the basis of your having been a designated person under terrorism legislation, that has its implications for your future employment. It is not just that your assets are frozen for a period and you hope that you will be non-designated. It affects not only your family and friends but your future employment prospects, so it is perhaps more serious. The noble Lord, Lord Pannick, referred to the 30-day freezing as “inconvenient”. I suggest respectfully to him that it is potentially more than inconvenient.
I wonder whether the noble Lord can tell us why he chose 30 days for these interim orders rather than, perhaps, 45 days as I expect the Treasury’s civil servants or certainly the Home Office’s would have sought. Why did he not choose 14 days, or 31 days or 29? What is the magic cut-off whereby information will become available on the 30th day that was not available on the 29th? The Minister also said that there are other countries with similar systems. I wonder whether he could share with us the other countries that have such a low test, even for an interim order of 30 days in the first instance. It would be helpful to know whether they have similar systems to ours.
My Lords, the last Government passed the provisional Bill earlier this year to validate existing asset-freezing orders and to avoid gaps in the terrorist asset-freezing regime. At the same time, we sent a draft Bill for public consultation to ensure that we had a viable long-term framework for terrorist asset freezing. Those were the right decisions to take at the time and I thank the Treasury for its advice on these matters. What it means for us today is that we now have the benefit of public submissions on the draft Bill and the report from our Constitution Committee. Submissions on the draft Bill voiced a concern that the balance was not right between public security and individual civil liberties. Added to that is the report from the Joint Committee on Human Rights, which noted the necessity to keep assessing the appropriateness of terrorist legislation to ensure that the measures imposed remain fair and proportionate. We have taken these views on board.
The interim designation proposal from the Government is inevitably a compromise position to accommodate some of the concerns raised by the Supreme Court in the Ahmed case, in public submissions made on the draft Bill and by the Constitution Committee in the House of Lords. We have been considering the viability of a similar regime ourselves. In considering this solution further, we have a few questions about the Government’s proposed regime.
One issue that might benefit from clarification—this echoes the remarks of the noble Baroness, Lady Falkner—is how the Government came to the 30-day timeframe. I assume that there was nothing very principled about it. Do the relevant agencies consider that they will be able to meet the higher test within such a period? Do they consider that that will put a particular imposition on the limited resources available to them in this particularly difficult area?
As I understand the Minister’s position, the consequence of the new approach is that the order will drop, although it is reasonably suspected that an individual is involved in terrorist activity. I appreciate that there is more than a semantic difference between “reasonable suspicion” and “reasonable belief” but, as the noble and learned Lord, Lord Lloyd of Berwick, said, the difference between the two tests can be quite thin. Because this may be an area that will become contentious in court, it would be helpful if some indication might be given as to how the Minister perceives the difference between the two tests. As the noble and learned Lord, Lord Lloyd of Berwick, also said, it is paramount to suspend terrorists’ funding when one may.
There is a concern about the extent to which a string of interim designations might lead to pressure on sparse resources. Have the Government considered the possibility of a longer timeframe with a definitive cut-off point as a way in which to provide certainty and capacity for the long-term credibility of the asset-freezing regime? There is in New Zealand a possibility of a one-year interim designation based on the lower burden of proof. That cannot be renewed. After that period, the relevant authority, in that case the Prime Minister, must decide whether to grant a final designation or to allow the designation to lapse. That acknowledges the important balance required between civil rights and security. It would be interesting to know whether the Government have any information on how that regime has operated in New Zealand and it would be useful if such information as the Government possess might be made available.
There is interest in the Government’s assessment of costs in introducing this regime into the asset-freezing framework. I appreciate that this might be asking for too much, but are there any indications as to what additional costs might be associated with having an interim and final designation scheme?
Finally, I share the view expressed from all quarters of the Committee, including by the noble Baronesses, Lady Hamwee and Lady Falkner, and the noble Lords, Lord Myners and Lord Lester, that further debate on some of these amendments might be useful. I echo the noble Baroness, Lady Noakes, in expressing disappointment about the absence of a review. Again, it would be helpful to have a timeframe that the Minister is confident in telling the Committee about when that review might come.
I draw attention to the point that the noble Lord, Lord Lester of Herne Hill, identified, with his usual acuity, on the recent decision of the European Court of Justice. Plainly this must raise questions about how that Court views the potential for abuse in the system as it is currently proposed. It would be useful to hear what consideration the Government have given to the decision of the Court. I appreciate that the decision is very recent and would not expect any developed appreciation of the judgment.
My Lords, I am grateful for the important contributions that we have had to this discussion and for the focused points. I appreciate the remarks from around the Committee in response to the amendments that we have brought forward. On one or two of the procedural points, I apologise if noble Lords believe that our amendments came forward a bit late in the day but, as your Lordships will appreciate, they are fundamental amendments to the Bill and, with the Recess and the summer holidays, it took some time, both within the Treasury and with my colleagues in Government, to ensure that we got them absolutely right. We took the time necessary to do that, but I apologise if it has been a bit of a scramble in the past couple of days.
On the question that a number of noble Lords have raised about the process of amendments to amendments, my understanding, although I am the newest of new boys here, is that amendments to amendments are possible but the reversal of amendments on Report is not. Whatever the construction is, though, I am sure that we will be bound by whatever the conventions of the House are. However, I take the point that there are potentially a number of bits of tidying up. We will come to the individual items, but there are certainly one or two things that I shall take away and reflect on. I take that procedural point.
On the question of the publication of the Home Office review, I can only repeat what I said in my opening remarks—I have no specific date. However, I note the remarks that have been made today, and I will take them away and relay them to my right honourable friend the Home Secretary.
I turn to some of the specific points that have been raised. A number of noble Lords, starting with the noble and learned Lord, Lord Lloyd of Berwick, have made the suggestion that it should be for a judge to make the order rather than a Treasury Minister, with the courts then reviewing the order if it is appealed. I cannot do more than refer to the powerful case succinctly put by my noble friend Lord Carlile of Berriew, who said what I would probably have said at greater length: we believe, given the nature of this regime and the nature of the process that requires Ministers to take account of operational information, that it is appropriate for Ministers to make the initial order, but making that order has to be done on the considerably strengthened tests that we are now proposing and there has to be a concern that the public would be put at risk if the order were not made.
I do not believe that the rules about what evidence can be brought before the court are in any way changed by what we are proposing from the conventions that apply. It relates in some way to the point that the noble and learned Lord made about the nature of the evidence that should be there before an order is made. The noble and learned Lord, Lord Lloyd of Berwick, quoted one Supreme Court justice; I could quote others but perhaps I should not detain the Committee. I might have referred to that at Second Reading. The noble and learned Lord, Lord Rodger, has in some of his remarks expressed a different view about the nature of the supporting evidence in order to support very much a preventive approach to this regime.
Following the point just made by the noble and learned Lord, Lord Lloyd, if the Bill were to place the responsibility on the Treasury not to designate but to seek an ex parte decision by a judge to designate, would that hearing not be held in camera? In those circumstances, would it not be possible to provide, for example, evidence from the security services, such as SIS and GCHQ, without any danger to national security?
The issue here, as the Government see it, is to get a workable regime that is able to respond flexibly and appropriately and can be a preventive regime. The balance we have struck between a limited period when the evidence can be used to support a ministerial decision on the basis of reasonable suspicion, followed by the reasonable belief with the appeal to the court, is the right one. There are different ways of doing it which would entail various ways of the court looking at it. I come back to the fundamental point—my noble friend Lord Carlile of Berriew has absolutely gone to the heart of this. While we could debate alternative ways of doing it, in striking the balance it is appropriate to have a ministerial decision, with the person designated able to challenge it through an appeal process in the court.
The Minister is answering me by saying that the balance is in favour of the Treasury route because it is a more appropriate route, which is slightly circular. Can I establish what exactly it is that the Government feel is in the route’s favour? What are the decisive criteria in favour of taking the route that they suggest? Is it a matter of time? Is the noble Lord suggesting that it is a matter of time because Ministers could take decisions more quickly than a judge could grant an ex parte injunction or designation? If not time, what other specific considerations does the noble Lord have in mind?
Ultimately it is the responsibility of the Executive to make these orders. They have the operational information at their disposal. Yes, the orders can be made very quickly. Fundamentally this is an appropriate action power of the Executive, with checks through the courts. That is the way it has operated to date, with the important exception that we are strengthening both the test that Ministers have to apply and the ability to challenge decisions through the courts. I take to heart the words of the noble Lord, Lord Myners, as a Minister who was involved in implementing the regime. He graciously said that the new construct provides a better approach than the one in the previous legislation. I take that very much to heart from a former Minister who is used to making these difficult judgments, which have to be made.
My Lords, does the Minister accept that this is a highly controversial matter, that I for one have the misfortune to disagree with my noble friend Lord Carlile, and that the Kadi case, for example, about which we hope to hear more, is very much in favour of full judicial protection and full due process of law? I for one wholly agree with the noble and learned Lord, Lord Lloyd of Berwick, and with the noble Lord, Lord Davies. I see no reason whatever why we cannot trust the High Court, with its very sensitive procedures concerned with protecting national security but also personal liberty, with the primary decision to make an order with draconian consequences. I understand the arguments of administrative convenience which are always deployed by the Executive but I for one am not satisfied. I cannot tell whether the Joint Committee on Human Rights will come to a similar view.
My Lords, I shall come to the Kadi case although I should note that it does not directly relate to this particular regime. There is a judgment to be made as to what actions are ones for the Executive and what are not. We believe that this measure—it is the way this regime has worked over the years—should be operated by Ministers with the appropriate protections. The word “draconian” has to be used and understood in a particular way. The measure is intended to be draconian in the sense of making a material impact on the ability of terrorists to finance their activities but is not intended to be draconian in the sense that we also have very significant safeguards in the regime through the licensing which allows proper expenditures to be made. Therefore, I do not recognise the word “draconian” in that sense as we ensure, under individual or general licences, that money can be released for the appropriate uses, whether that is to pay legal bills or family expenses and so on.
The noble Lord, Lord Pannick, made some very helpful remarks. As we are also discussing his amendment, I reiterate his endorsement of the broad shape of the regime that we propose in the government amendments. He made three specific points in relation to what we are proposing in Clause 29 and asked detailed questions about whether it should be the same evidence or substantially the same evidence. As I think he recognises, these are fine points which I will take away and consider. On the noble Lord’s point about appropriate notification, I should have thought that if certain people had been notified at the outset, at stage two it would be appropriate to notify the same people, so I am not sure that that needs to be stiffened up. Indeed, I am not immediately persuaded as to what difference the use of the same evidence or substantially the same would make in practice, but I will have a look at that.
My noble friend Lady Noakes talked about the procedural points that I have addressed in the Home Office review. My noble friend asked whether the review will detail the number of interim and final freezes and how many interim freezes had become final freezes. I have little doubt that that will be covered in the review. I am not sure that the implication should necessarily be drawn that if a number of interim orders are made, but they actually fall away, that in any sense suggests that they were improperly made or that the evidence was not properly based. I can quite see circumstances in which interim orders have to be made but, for a number of reasons, could fall away. I take my noble friend’s point about—
I probably did not express myself particularly well when I put the point to my noble friend. I was not talking about the work of the independent reviewer, but of the requirement in Clause 24 on the Treasury to make a report. I hear the Minister trying to say that nothing can necessarily be inferred from the relationship between interim and final designations. I am really seeking to make sure that that information will be made available in the public domain, and the report by the Treasury under Clause 24 seems to be the obvious route, not the work of the independent reviewer.
I thank my noble friend and entirely take her point that it would be a matter for the Treasury report. I am grateful to her for clarifying that she agrees with me that one could not take a simple implication from a read-across of the number of interim reports that might—we will see whether they do—fall away.
My noble friend Lady Falkner of Margravine asked why there should be a period of 30 days as opposed to any other number of days. There is, as she put it, no particular magic in designating a period of 30 days. One could mount an argument for 14 days or 45 days. Thirty sits in the middle, and it seems a reasonable period. Quite a number of cases have come across my desk and that period seems to strike a reasonable balance. However, there is no magic about it.
As for the experience of other countries, I shall look to see what other experience there is. However, I can say that New Zealand, specifically, has an interim designation which can be made for 30 days on the basis of suspicion and a final designation which requires reasonable belief. New Zealand was mentioned in a question from the noble and learned Lord, Lord Davidson of Glen Clova. Regrettably, I met New Zealand’s Deputy Prime Minister yesterday—if the meeting was tomorrow, I could ask him the question. However, the review here operates in a different way, and we also have the regular review which Treasury Ministers have to make. Our regime is different from New Zealand’s, and we have a separate safeguard, the regular review, which is also subject to appeal to the court.
The noble and learned Lord made a couple of points about resource pressures and additional costs. I have no reason to believe that there will be significant additional costs or resource pressures. Perhaps linked to that, the noble Lord, Lord Myners, asked about fishing trips. He said that it was a churlish point, but I would not say so. It is important to question whether there will be fishing trips. I have absolutely no reason to believe that the new regime as proposed will lead to fishing trips. A series of serious tests have to be applied and that includes protection of the public. This is linked to the resources point. Resources will not be significantly increased, because nothing in the proposals will allow Ministers to go off on fishing trips.
Perhaps the last point left hanging concerns the Kadi case. The first thing to say is that the case does not impinge directly on the legislation that we are looking at. The latest judgment annuls the EU regulation and the listing under it dating back to 2001 as it applies to Kadi, but there is a suspension of the judgment for two months and 10 days to allow time for an appeal to be made to the Court of Justice. If an appeal is lodged, it is likely to take 18 to 24 months. I expect that the Foreign and Commonwealth Office will press the Commission to appeal the decision; so the case has a long time to run. Of course, if the judgment were upheld, it would set our EU obligations squarely against our UN obligations, which would present a difficulty: but it is not a difficulty that impinges directly on the Bill.
I am sorry to interrupt my noble friend the Minister, but he is putting his own gloss on the judgment. He says that it puts us at odds with the United Nations regime, but am I not right in saying that the European Court was at pains not to put itself at odds with the regime, but to insist upon safeguards in administering the regime?
My Lords, I am reluctant to get too far into the details of the Kadi case. As the noble and learned Lord, Lord Davidson of Glen Clova, said, this is a recent and complex judgment that may be appealed and does not have a direct bearing on the Bill. I hope that we can now pass on, but appreciate that we may need to come back to this in the House in future.
I think that I have picked up most of the material points. The last one is the question of what happened to the printed copy of the Treasury’s human rights memorandum. I will go back and make sure that the memorandum is available. I do not know where it has got to in the paper trail, but I will find out, and I look forward to seeing the conclusion of the Joint Committee on Human Rights on the Bill and discussing this further on Report. That is a further important step as we scrutinise the Bill.
I will ask the noble Lord, Lord Pannick, not to press his amendment but to support the government’s amendment.
Amendment 1 agreed.
Before I call Amendment 2, I should inform the Committee that if this amendment is agreed to, I cannot call Amendment 3 due to pre-emption.
2: Clause 2, page 1, line 16, leave out “have reasonable grounds for suspecting” and insert “reasonably believe”
Amendment 2 agreed
Amendment 3 not moved.
4: Clause 2, page 1, line 17, leave out “is or has been involved in terrorist activity” and insert “has committed or attempted to commit terrorist acts”
I will also speak to Amendments 8 and 9. The term in Clause 2 with which I am particularly concerned is “involved”. It may look from my amendments as if I am more bothered about the definition of “terrorist activity”. I am a little bothered about that, but more concerned about what is meant by “involvement”. I changed “terrorist activity” to “terrorist acts” simply to make it flow better.
The term “involved in terrorism” seems to me very wide, so I hope that the Minister will explain where it comes from and what the precedents for it are. It looks to me as if the term comes from the Prevention of Terrorism Act 2005 provisions on control orders, which we are all agreed is a tough regime. The Terrorism Act 2000 used a different term, “concerned in terrorism”, in relation to deciding whether to proscribe an organisation. I am told by people from Liberty—I am grateful for their help, which I asked for late last night—that the term “involved in terrorism” has been interpreted by the courts under the control order regime and has been applied even where the person concerned has been acquitted of a terrorism offence. Liberty referred me to the cases involving AY and MB. Therefore, it seems that “involved in” requires only a suspicion of involvement rather than an actual charge or conviction. Although we have spent a good deal of time on suspicion and belief in the debate on Amendment 1, I think that we are back in the realms of suspicion in this group as well.
If I am right that the term “involved in” is taken from the 2005 Act, I should perhaps go on to ask about the different terminology that is used as the provision goes on. The 2005 Act talks about “involvement in terrorism-related activity”, which is not quite what is referred to in the Bill. The courts could distinguish between the two terms and, indeed, that might be what the Minister intends. I felt that I should raise the point at this early stage of the debate.
As other noble Lords will have seen, the briefing from the Equality and Human Rights Commission takes the view that such a threshold is not only too widely drawn but is in excess of what is required by UN Resolution 1373 of 2001.
Let me try to shorten the debate a little—I think that this group of amendments need not detain us nearly as long as the previous one—by acknowledging the provision in Clause 2(1)(b), which requires that the Treasury be of the view that the designation would be
“necessary for purposes connected with protecting members of the public”.
I accept that that is a reassuring condition.
However, I am concerned that the term “involved in terrorist activity” might extend to someone who happens to have been a bystander or who has just been associated with someone a bit more dodgy. The person might just have happened to be in the wrong place at the wrong time. I do not know whether this is a fair analogy to draw, but I am aware of concerns in another part of the legal forest about another term that has now, I am afraid, completely gone from me. That tells me that one should make proper notes. Perhaps my noble friend Lord Carlile knows the term that applies where a gang of people who were standing around happen to have seen a murder and are charged. Can you help me, Alex?
I thank my noble friend. I could not have afforded that advice but I am very grateful for it. As I said, it may not be an appropriate analogy but it has occurred to me that people whom the public might regard as being a long way away from being responsible for something could be charged under the joint enterprise head with a very serious offence, and I should not like to see that applied here. These amendments are tabled in order to understand the Government’s thinking on this clause better than, I confess, I do at the moment. I beg to move.
My Lords, the noble Baroness, Lady Hamwee, and her colleague whose name is also attached to this amendment have raised very serious matters. After all, vagueness is not appropriate to the creation of a criminal offence and nor does it seem appropriate when the results may be the drastic ones described by several noble Lords in the previous debate. If being involved is something other than having committed or having attempted to commit an offence, what is it? Being involved seems to be so general and unspecific that it seems inappropriate even to legislation which is concerned with preventive matters rather than with a known criminal act that has been committed. I think that the Government are called upon to explain this.
My Lords, my noble friend Lady Hamwee has provoked me, at least into saying to her that it will cost her no more than a drink later. However, with great respect and affection, I want to raise a substantive point about her amendment because I think that she is wrong.
We have to take a little walk down the real world of everyday terrorism activity. There are people who do not commit what might be held by the courts to be terrorism acts but who have the custodianship of money, and that money may, for example, be about to be used for the purchase of guns—a subject that is very topical at present. I think that, if I provoke him, the Minister will confirm that these events can happen very quickly and the police may have to act at the last minute. As former Ministers opposite will know, from time to time events have occurred that have required extremely urgent action. In those circumstances—particularly now, when we have a regime in which there are to be interim orders—a threshold has to be set which I am afraid may temporarily disadvantage some people but will protect the public from possible extreme danger. We have to make a judgment about whether we do that or whether we adopt the approach which some of the briefings have suggested. However, I want to make the point that in the real world of terrorism caution has to be the watchword, particularly if the rights of individuals are fully protected in a review mechanism which is provided later. Indeed, this is also part of the answer to the point raised in the previous debate about whether there should be an executive act followed by judicial review or a judicial decision followed by judicial review. In the real world, I am afraid that an executive decision followed by judicial review is the only way of meeting the fast-moving events which occur when there is a real terrorism threat.
I have profound regard and respect for the noble Lord, Lord Carlile of Berriew, but I am concerned at this stage not with whether the authority should be exercised administratively, executively or judicially, but with what the boundary of criminality is exactly in relation to the meaning of the words,
“that the person is or has been involved in terrorist activity”.
My simple question is: does that possibly encompass a person who is a principal either in the first or the second degree, or a person who aids, abets, counsels or procures? In other words, does it extend that very considerable boundary of criminality, and if so, to what extent?
My Lords, it is the term “the real world” used by my noble friend Lord Carlile that provokes me to speak. He may well agree—academic pursuits and all that set aside—that because of my background, if for no other reason, I have some understanding of this particular real world and the people involved in it. The concern, particularly for me, is that an interim designation that is based on reasonable suspicion followed by such a broad inference of what kind of suspicion might lead to what kind of involvement is very wide indeed. We will catch an awful lot of people for no reason at all. I am talking about communities where large numbers of family members live together. Such communities are tight-knit and a lot of support is given to each other, often simply on the basis of familial, religious or community loyalty. The people in these communities, particularly the women, will, often in good faith, do something that is asked of them without seeing what it might lead to. The idea that they will be cognisant of and understand reasonable suspicion enough as a test and the level of involvement as another test and try not to commit those offences is asking rather a lot on frail grounds. Will the Minister reconsider this and the exhortations of my noble—and extremely knowledgeable—friend Lord Carlile that we need to be extremely careful in this regard?
My Lords, let me attempt to deal with this. I certainly feel that I live in the real world in that I have to make such decisions regularly. One limb of the test that has not been stressed in this discussion but which is absolutely critical to it is that the legal test for freezing assets has the second limb that the Treasury must also conclude that a designation is necessary for public protection. That is the critical safeguard on how the power to freeze assets is used. There can be very fast-moving situations, as described by my noble friend Lord Carlile of Berriew, when the exact nature of each person’s role in a plot is not immediately clear. It would be a significant restriction on the regime’s ability to operate in the preventive way that is necessary for public protection if we were to exclude those who might be involved in the broader commissioning, facilitation and support of terrorist activity.
My noble friend instanced the case of people who may be sitting on money. It is essential that the definition is not restricted in the way that Amendments 4 and 8 propose if it is to be effective. As the plot is disrupted, the exact nature of people’s role will become increasingly clear. It will become clear who is a “bystander”, to use the word of my noble friend Lady Hamwee. I think that the two-stage framework that we will now have in place, combined with the requirement for Treasury Ministers to conclude that the designation is necessary for public protection, deals with the point.
I am most grateful to the Minister for giving way. I accept of course that there has to be very wide discretion, which is allowed to the authorities in these two provisions, subsections (1) and (2). However, at the end of the day, one has to ask: what is the target area? Reasonable suspicion is perfectly understandable. It is something with which the authorities have to deal day in and day out. The question is: what is the target area? Is it a person who has been criminally involved to some degree or another as a principal in the first or second degree or as an aider, abetter, counsellor or procurer, or is it wider than that and, if so, how much wider? In other words, what is the end product that one is being reasonably suspicious of?
I am grateful to the noble Lord, Lord Elystan-Morgan, but I must reiterate that we are trying here to achieve the protection of the public against active, live terrorist attacks. In order to do that, Ministers need to be able to exercise immediate discretion to stop the flow of money—as we know, very small sums of money can create enormous disruption. Ministers must have appropriate powers to disrupt the terrorist threat. That means that it is important that the freezing net is drawn so that those who are involved in supporting or facilitating the activity are caught in it, but, as the evidence becomes clearer, the Treasury must be concerned at all times that the designation is necessary for public protection. Where an individual may have been part of a wider group that is involved in terrorist activity but where it has subsequently become clear that the individual’s involvement was purely incidental and that they themselves were not supporting or facilitating terrorism, it would be difficult to demonstrate that a freeze was necessary for public protection. Freezes cannot be imposed or maintained unless the second limb of the test is met.
I return to the analysis by my noble friend Lord Carlile of Berriew. I believe that protections are in place and that we must not forget that second limb. For those reasons, I hope that, on reflection, my noble friend will be prepared to withdraw her amendment.
Before the Minister finishes, is he prepared to give the assurance that the concept of being involved must connote some culpability, some knowledge—some recklessness, at least—and that a perfectly innocent person caught up in events would not be covered?
One has to go back to the definition of terrorist activity in Clause 2(2). I cannot do more than draw the Committee's attention back to the definition there, which mentions,
“the commission, preparation or instigation of acts of terrorism … conduct that facilitates the commission, preparation or instigation of such acts, or that is intended to do so … conduct that gives support or assistance to persons who are known or believed by the person concerned to be involved in conduct falling within”,
the previous two paragraphs of the subsection.
It is necessarily drawn wide, but the linkages that are made are clear from the definition. All cases also have to be linked to what is necessary for public protection. I ask my noble friend to withdraw the amendment.
My Lords, I will not leave the Minister in suspense. In view of the point made by the noble Lord, Lord Pannick, I am minded to bring the term “involvement” back on Report in the hope that the Minister will have had an opportunity to consider the culpability issue and will perhaps be able to give us some more assurances on it.
When I moved this amendment, I acknowledged paragraph (b), and I hope I said, because it was what I wrote down, that I was reassured by it. I take that point very seriously and was by no means ignoring it. The boundaries of culpability, as the noble Lord, Lord Elystan-Morgan, described them, are very important. I will come back to this, but not in as extensive a fashion, and I know there are some problems with some of these amendments. I beg leave to withdraw the amendment.
Amendment 4 withdrawn.
5: Clause 2, page 2, line 7, at end insert—
“(1A) Such designation shall expire after 30 days unless confirmed by the High Court under subsection (1B) of this section.”
I shall speak also to Amendments 6, 14, 16, 17, 26, 35, 47, 50, 60, 61 and 62 which are tabled in my name and that of my noble friend Lady Falkner. Government Amendments 57 to 59, 63 to 69, 71 to 73 and 88 are also in this group which is about the role of the court. In view of the previous debate, and to stop anybody teasing me, I will acknowledge that Amendment 5 provides a 30-day period. I welcome government Amendment 57, which introduces the appeal, but I am concerned that it should be an appeal as most people understand that term, so I will use these amendments to ask the Minister to explain how his new clause on appeal, which is inserted by Amendment 57, and Clause 22, which is subject to some amendments he will move, work together. In particular, we are retaining subsections (3) and (4) of Clause 22, which provide for the application of judicial review procedures.
I appreciate that the new appeal provision is about an appeal on designation. Having got that, and given that even if there were no reference to judicial review it could not be excluded because you cannot exclude judicial review, I am not sure why it is necessary to retain any part of Clause 22. I understand that the Government’s argument is that judicial review would be adequate for the circumstances we might find ourselves in, but the issue arises of how far a designated person under judicial review procedures can challenge the evidence. We will come to special advocates later. What, for instance, if he says that the circumstances have changed? As I understand it, judicial review is about what is in the mind of the decision-maker at the time the decision is made. What is the Government’s objection to appeals on all aspects of this regime to deal with the merits as distinct from the reasonableness of a decision? I am told that how the courts approach judicial review is slightly shifting sands becoming slightly wider and more open. Essentially, it is about legality and reasonableness as well as procedure. Legality meaning vires and reasonableness being Wednesbury reasonableness. Put simply, reasonableness is setting the outer boundaries to the discretion.
In particular, I should like to understand from the Minister whether, as the Bill will be amended with his amendments, the court can substitute its own version of a licence. I do not think that one can look at designation orders without thinking about how the licensing regime will operate as part of them. If we are leaving licensing entirely as an Executive matter, with the court perhaps able to strike a licence down but not able to substitute a different licence, I would be particularly concerned. I look forward to the Minister introducing his amendments. I have deliberately not taken long on mine because the Committee will be waiting to hear from him. I beg to move.
My Lords, I, too, welcome government Amendment 57 on the right of appeal. This seems to be a strong safeguard, which renders insubstantial the concern that the original decision is taken by the Executive. That of course is subject to two matters on which I would ask for reassurance from the Minister. First, would the Government expect provision to be made for an urgent appeal against the decision to make an interim designation? The new clause allows a right of appeal against the interim designation, but there is little point in providing such an appeal unless it is heard speedily, given that the interim designation will last for only 30 days.
Secondly, the appeal will be decided by the judge, as I understand it, only on the basis of evidence which is disclosed to the subject of the order. Will the Minister reassure me that nothing in the amendments allows the judge on an appeal to have regard to evidence which is not disclosed to the individual—the problem in control order cases which led to the decision of the Appellate Committee in the case of AF?
My Lords, the Government’s move away from the judicial review basis to a more natural appeals process for designations in their Amendment 57 is welcome. It shows that the Government have been listening to concerns about civil liberties in this Bill.
However, I have continuing concerns about Clause 22, and for that reason I shall speak in support in particular of Amendment 62 in the name of the noble Baroness, Lady Hamwee. Before I do so, I have a question for the Minister in connection with government Amendment 57, which sets up the new appeal process for designations. Am I correct that there is no provision for any appeal against the decision taken in the High Court or the Court of Session? Does it mean that the appeal process, so far as the designated person is concerned, ends there? I am not sure whether I mind one way or another, but I would be grateful to know what the Government’s position is on that.
I turn to the remaining decisions that will be dealt with under the terms of Clause 22. I accept that designations may appear to be the most important of the decisions the Executive will take in relation to the matters covered by the Bill, but decisions about licences are also vital for people who are designated. The licence regime will allow living expenses for those individuals, or possibly for the expenses they incur in order to carry on their business or trade. I spent most of the last 10 years on the Benches opposite arguing, in various circumstances, why people should not have to rely on judicial review when they get enmeshed in one Act or another. I argued strongly that judicial review is an unsatisfactory process for the citizen. That is because while the courts may well be expanding a little at the moment, typically they have involved themselves in or interfered with decisions of the Executive only where they are perverse in one way or another—perhaps because no normal decision-maker could have made the decision, the decision-maker took account of irrelevant facts or failed to take account of facts that were clearly relevant. Any civil servant worth his salt knows how to protect his Ministers from a judicial review challenge. Such a challenge is much more about form than substance, so I have never seen judicial review as something that gives the citizen much protection. If the person affected by a designation cannot convince the court that the decision was perverse in one way or another, there will no remedy at all.
The noble Baroness, Lady Hamwee, has alluded to the question of whether the court can vary the terms of a licence. If they fail to establish a perverse decision at judicial review, there will be no remedy, and if they could establish that a decision was perverse, which would probably be unlikely, there is then a question of whether any remedy is available at that stage or whether the matter has to go back to the Treasury for a further determination.
I hope that the Minister will reflect further on the Government’s position in Clause 22 and look again at whether the safeguards for those who are designated are adequate in those circumstances that go beyond the actual designation. It is good that we have moved to designations and it would be good if we could move a little further.
My Lords, earlier I supported interim versus final designation, as the Government have proposed in their amendments. At the previous stage I also raised this question: when someone’s assets have been seized, how are they expected to bring forward appeals when they may not have any access to money to hire lawyers? We have been told that the final designation should be made by the Treasury and not by the High Court, which I would have preferred. There is wider resistance to this proposal, and I find the amendment persuasive. It provides that a designation,
“shall expire after 30 days unless confirmed by the High Court”.
That would help the person whose assets have actually been seized because they need to know what is going to be done. The appeal process comes much later, in the new clause to be inserted before Clause 22. Although it is helpful, again I do not think that it will cure the problem that I raised earlier in this Committee.
I feel that the Government have got to respond to this. What happens after 30 days? Does it continue? The person’s assets have gone and they perhaps cannot have access to lawyers, but it has been said that they could appeal under the new clause introduced before Clause 22 by government Amendment 57. However, that is a little too late because after 30 days, if it did lapse, only the court should say, “Yes, we are going to continue to make it as a final designation”.
In the absence of all of that, I would be very worried about our judicial processes. Although I believe the interim order is quite reasonable, as is changing to reasonable belief, but why should it be confirmed after 30 days unless a High Court confirms it? If not, the appeal, to me, comes too late in the process.
My Lords, as noted earlier, the issue of civil liberties was raised in respect of the terrorist asset-freezing regime in the Bill. Some of the submissions on the draft Bill and in the report of the Constitution Committee suggested that more judicial oversight of decisions be made under the new Act. The contributions in the earlier debate reiterated that point. These amendments are intended to provide a better check and balance on decisions taken by the Executive behind the closed doors of the Treasury. This is to be welcomed.
As with the burden of proof issue discussed in earlier amendments, we support the introduction of more judicial oversight to protect civil liberties. It is correct that the previous Government considered it appropriate for the executive branch of government to make initial decisions in this area and we do not resile from that point. We welcome the Government’s amendment to make this regime more credible by having a judicial check and balance on that power.
I echo the view of the Joint Committee on Human Rights that we should constantly review terrorism legislation to make sure that we have the balance right. The Minister noted the interest on this side in the Home Office’s view on this area and I repeat that it would be helpful to have that to inform future debate.
Perhaps I may raise one or two probing issues in relation to the terrain of appeal. I respectfully agree with the noble Baroness, Lady Hamwee, that this area does not seem wholly clear. What seems to be envisaged is a form of appeal that is, to a degree, sui generis; it is not simply going off to the Court of Appeal or the Inner House. The judicial review also appears to operate in some way that may be parallel. It would be helpful if the Minister could indicate what is envisaged by this nature of appeal.
I would be particularly interested to hear whether it is envisaged that there should be some kind of fact finding. I raise this question because, in endeavouring to find out what was proposed in relation to an amendment that I shall bring forward later in relation to compensation, the answer that I received from Treasury officials was that compensation might be dealt with by the Appeal Court. As the Minister will immediately recognise, that introduces the question of fact finding that might come before any such, putting it neutrally, adjudicator. We are left with a certain lack of clarity as to what the Appeal Court is endeavouring to do and what its remit will be.
The point was well made by the noble Lord, Lord Pannick, that in this area timing will be critical. If the notion of a remedy to the Appeal Court is to have substance, it will be essential on issues such as interim designation to have the potential for speedy trial. Because this area is a relatively late introduction by way of amendment, it would be helpful to have guidance on what the Government envisage.
Perhaps I may make one final point in relation to the amendment tabled by the noble Baroness, Lady Hamwee. It is a gentle point; I hope that I am not to be accused of Caledonian prickliness. It relates not only to this amendment but to a number of amendments.
This has been a useful debate. There has been a general welcome from all sides of the Committee for the Government’s amendments, which introduce an appeal mechanism rather than judicial review for the core designation or decisions to vary or revoke.
Perhaps I could give some of the underlying rationale for the amendments. As introduced, Clauses 22 to 23 set out a procedure for review by the courts of any decisions taken by the Treasury under the powers provided in the Bill, including decisions to make, vary or revoke a designation, decisions in relation to licences issued or applied for, decisions whether to publicise the freeze generally or limit the scope of the publication for reasons of national security or justice and decisions whether to request or disclose information.
A number of noble Lords raised this matter at Second Reading. There were calls to amend the procedure for challenging asset-freezing decisions through the courts from a judicial review to an appeal. It perhaps answers some of the points made by my noble friends Lady Hamwee and Lady Noakes, to which I shall return in more detail, to say that we still believe that judicial review can be a very flexible tool, allowing differing degrees of intensity of scrutiny depending on circumstances and the impact of the decision in question on the individual concerned. In its report prior to Second Reading, the Constitution Committee acknowledged as a result of various court judgments the intensity with which courts scrutinise control orders where the legislation provides for a review applying judicial review principles. That is broadly equivalent to an appeal. Such an in-depth judicial review has been shown to be an effective safeguard in these cases.
Nevertheless, the Government believe that a similar full merits review should be adopted for court scrutiny of asset-freezing designations; that is, decisions to impose, to vary or to renew asset freezes. We believe it because, due to the lack of case law in this area, there is no certainty that the court would choose to undertake such a rigorous judicial review procedure—I think that that is the sense of the comments that were made at Second Reading. We have responded by tabling amendments to introduce an appeal mechanism for asset-freezing designation decisions, spelling out that we would expect a full merits-based review of such decisions to be undertaken by the court. Such an appeal would require both parties to provide the material underlying their case to the court, which would then conduct that full merits-based review of the designation decision, taking all evidence and substituting its own decision if necessary. This level of scrutiny is appropriate for designation decisions, because it is the core decision that will most affect the designated person’s human rights.
Perhaps I may respond to one or two of the specific questions asked in this regard. My noble friend Lady Noakes asked whether it was just a right of appeal at one level. As with appeals generally, it will be possible for appeals to proceed along the normal route, either through the English system or the Scottish system, and ultimately, if it is appropriate, to the Supreme Court.
The noble Lord, Lord Pannick, asked about expedition. He made the point that the provision applies to interim orders. By virtue of that, there would be an expectation that the courts would respond. Indeed, there have been a number of cases where the courts have shown an ability to respond with expedition. That is certainly what we would anticipate if an appeal was brought. On the question on disclosure posed by the noble Lord, Lord Pannick, it is clear from the terms of the Bill that provision and reference is made to the rules of court with regard to the special advocate system. It is therefore envisaged that the rules of court should provide for that system. There is a later amendment in the name of my noble friend Lady Hamwee on which we might be able to discuss this in greater detail.
My noble friends Lady Hamwee and Lady Noakes both raised other decisions where the position would remain as one of judicial review rather than appeal. The Government’s position on that, as for other decisions concerning implementation of the freeze, is that these are not as fundamental to the citizen as the original decision to impose the freeze. That includes the granting of specific licences and the publicity of the fact of a designation. It is certainly our view that maintaining a standard judicial review is appropriate in these cases. I certainly recognise the concerns raised by my noble friend Lady Noakes about judicial review but, as I have said, the courts have already shown, certainly in relation to decisions on control orders, an ability to mount a very rigorous review indeed. These decisions are, however, more administrative in their nature and do not require the same in-depth consideration as a decision to impose an asset freeze. Nevertheless, we anticipate that judicial review of these decisions would include proper scrutiny of the material on which the Treasury decision is made and that the court would have the power to consider further information if it believed that to be necessary. Ultimately, it will be a matter for the courts to decide on the appropriate level of scrutiny to be applied, depending on the decision in question.
My noble friend Lady Hamwee asked whether the court would be able to substitute its own terms if, for example, that was with regard to a licence. The court has discretion to give whatever relief is appropriate; we certainly believe that that could include amending the terms of a licence.
The most reverend Primate the Archbishop of York raised the issue of people being subject to freezes for 30 days without access to funds and legal expenses. The point about that is that we provide licences. A general licence is given at the point where people are designated to ensure that they indeed have access to funds for living and legal expenses. This will be the subject of a set of amendments later in our proceedings. People do not need to go to a court to be able to access that legal aid funding.
Perhaps I might specifically refer to Amendments 5 and 6 and the consequential amendments, which would limit the period for which the Treasury could make asset-freezing designations to 30 days, so that any freeze going beyond 30 days would require confirmation by the High Court. This in many ways reflects some of our debate on the first set of amendments—not only the points raised by the noble and learned Lord, Lord Lloyd of Berwick, but the general issue of the balance between the decisions of the Executive and those of the judiciary. Perhaps not surprisingly, I endorse what was said by my noble friend Lord Carlile of Berriew, who indicated the importance of separating executive decisions from a robust review of those decisions by the judiciary. Indeed, that point was acknowledged by the noble and learned Lord, Lord Davidson of Glen Clova. He indicated that that was the former Government’s view, which they maintain. It is, quite clearly, a matter of important debate and, as my noble friend Lord Lester of Herne Hill indicated, these matters are complex. Ultimately, however, Ministers have the responsibility for national security and our accountability as Ministers is not only to Parliament, which is an important accountability, but to the courts. We believe that we have introduced a robust form of review, if those affected by designation wish to pursue it.
Unlike control orders, asset freezing is not only used against people in the United Kingdom who cannot be prosecuted or deported. In fact, only around 10 per cent of asset-freezing cases involve people who are in the UK or hold funds here and are not being prosecuted for terrorist offences. The noble and learned Lord, Lord Lloyd of Berwick, indicated that he thought that those who were subject to designation should also be prosecuted. I asked how many people who have been subject to asset freezes have been prosecuted. I was advised that 21 individuals in the UK have been convicted for terrorism offences. Six people within the UK have not been prosecuted. I also asked how many persons outwith the UK have been subject to designation for asset freezing; the answer is 36, of which 22 are entities and 14 are individuals. It would not be possible to prosecute them. Nevertheless, consistent with our obligations under the United Nations Security Council resolution and the importance attached to disrupting terrorism by freezing assets, it is important that we have been able to designate in those cases in which it would not be possible to bring prosecutions.
In that small number of important cases in which individuals have not been prosecuted and are within the UK, we believe that the opportunities that are open now through a full form of appeal are appropriate. It would not be appropriate to have a mandatory form of court decision-making, but there is a robust avenue for those who have been designated and wish to challenge that in the courts. In that way, we have strengthened judicial safeguards for asset freezing. For those reasons, I hope that the noble Baroness will be prepared to withdraw her amendment and that the Committee will be minded in due course to support the amendments that have been tabled by the Government.
Do the Government accept, on special advocates, that the AF case would apply in this context, as it does in the context of control orders, and that it would be necessary for them to disclose at least the gist of the allegations against the individual concerned?
I think that I am right in saying that the noble Lord represented successful appellants in the case to which he referred. Certainly we would take the view that the special advocate system and disclosure procedures are designed to ensure justice for individuals in difficult circumstances when, as the noble Lord recognises, public interest material cannot be disclosed. The special advocate system has been in effect for some time. With regard to the specific case, applying the AF judgment to asset freezing, the noble Lord is right that there is a relation to control orders, but the Government do not consider that there is an automatic read-across to all other proceedings involving the use of closed material for special advocates. It is fair to say that the requirements of fairness, which are vital, will vary according to the context and gravity of the consequences for the individual. It is engrained in both domestic and European Convention of Human Rights jurisprudence that fairness is context and fact specific. In the case before the Grand Chamber against the UK that immediately preceded the AF case, the point that it can vary was made. That is no doubt a matter to which we will return when we deal with the issue of special advocates under a later amendment.
My Lords, my apologies for ignoring the wonderful country of Caledonia, which I love very much. It was a particular gaffe, given the presence on the two Front Benches of eminent Scottish lawyers.
What I am going to say should be construed as constructive criticism, which is appropriate from these Benches. My noble friend referred to the human rights aspects of designations and how they had figured in the Government’s thinking in inserting the appeal procedure. The significance of the licensing regime must not be downplayed; the human rights aspects of the licences are enormously important. The Government have explained why they consider that a judicial review will be adequate to deal with licences, but the Minister has not explained—perhaps he does not think it necessary—why the appeal route is being rejected. I ask him these questions to get them on to the record. Perhaps I will come back to them next time.
Clause 22(2) allows for a person affected by a decision to apply for the decision to be set aside. The phrase,
“the decision should be set aside”,
is in Clause 22(3). I do not know whether “set aside” covers setting aside a decision and imposing an alternative, which might be varying a licence. If so, that might answer the point, but I suspect that it might not cover it; it is certainly not clear. Clause 22(4) says that this is the condition for the court giving whatever order it determines if it decides that a decision should be set aside. I want to be reassured that the court can take a view not to set aside the licence but to vary the terms of the licence. I do not know whether the Minister wants to comment on that at this point.
I thought that I had indeed indicated that it is our belief that the court has the discretion to give whatever relief it considers appropriate if it is dealing with a licence under judicial review and that that can include amending the terms of a licence.
I heard that; I took it as a general comment. I was particularly concerned about the words in what will apply—above and beyond, presumably, although I do not know—and whether the general position can trump what is in this legislation. Maybe we can discuss this between now and the next stage and, if necessary, come back to it. I beg leave to withdraw the amendment.
Amendment 5 withdrawn.
Amendment 6 not moved.
7: Clause 2, page 2, line 7, at end insert—
“( ) In making a designation under subsection (1), the Treasury shall have regard to the United Kingdom’s international obligations in respect of—
(a) the prevention of terrorism; and(b) the humanitarian needs of the person affected by designation.”
My Lords, I shall speak also to the amendments grouped with Amendment 7, including Amendment 51, which is linked to it. I also note that our new Clause 10 is included; it is there in a most helpful frame from the Opposition towards the Government, and I hope that the response from the Minister will reflect that.
I shall address the question of Amendments 7 and 51 and why the official Opposition have tabled them. We seek to question the Government about the extent to which the Treasury will consider our relevant international and European commitments when making designations. Based on the submissions made on the draft Bill and the issues raised by the Constitution Select Committee, have the Government considered whether the proposed legal framework for designation adequately encompasses our international commitments? In particular, have they considered whether it is appropriate to assess a licence on humanitarian grounds prior to invoking the asset freezing attached to any designation? That it should be an offence in the interim period for a person to provide the necessities of life appears to be directly at odds with the United Kingdom’s international commitments under UNSCR 1452, which relate to exceptions being granted for individuals designated under the asset-freezing regime to meet basic humanitarian needs.
I realise that in the previous amendment we discussed aspects of this issue, but I seek greater clarification from the Government on this matter. Would it not be desirable instead to introduce this step near to the beginning of designation, before its effect is felt, to ensure that the Treasury has in fact considered the appropriateness of the licence in every circumstance? We have great sensitivities about this issue with regard to licences. We all recognise the difficulties while at the same asserting, as my noble friend has been concerned to do in his earlier contributions, how we share with the Government the prime focus of this legislation, which is to protect our community and our people from acts of terrorism. Of course we do not want to infringe the capacity for that at all, but, given our international obligations, we want to look at how much these factors factor into the position when the Treasury looks at a designation order.
Our amendment would provide maximum flexibility because it would not prevent the Treasury from deciding that a licence was not appropriate in individual circumstances or from deciding later that a licence should be granted, varied or revoked. This includes situations where a designated person or a third person affected by designation applies to the Treasury for relief under the licence scheme. These are probing amendments, and I hope that the Minister will respond to them as constructively as he can.
On Amendment 10, the Opposition are concerned to be even more helpful. We cannot see the explicit power in the Bill to grant a licence. The Bill as drafted certainly allows the Treasury to vary or revoke a licence at any time, but there does not seem to be explicit provision for the Treasury to grant a licence. There are phrases about what a licence may contain and what it means once a licence has been granted, but we cannot identify a specific power. The purpose of our amendment, therefore, is a new clause to enable the Treasury to grant a licence. This would give legal effect to a licence so that it and any decisions made in reference to it could not subsequently be challenged in court.
Such is my respect for Treasury lawyers—indeed for the Treasury in all its aspects, from past experience—that I have no doubt that my anxieties in this respect are completely groundless. I hope that the Minister will be able to reassure me. If not, we will seek to press our new clause.
My name is on Amendment 48 along with that of my noble friend Lady Hamwee. Before I speak to it, I should say that Amendments 7 and 10 of the noble Lord, Lord Davies of Oldham, seem entirely reasonable, but in the absence of knowing what United Nations Security Council Resolution 1452 refers to, I will restrict my arguments to Amendment 48.
The intention behind our amendment is to clarify Clause 13 in order to improve accountability and increase transparency so that officials, as well as the designated person, are in a position to know how they go about setting the test for reasonable living costs, which is what we refer to in our amendment. Reasonable living costs will inevitably be a matter of subjectivity in a family due to their requirements. In ascertaining what reasonable costs are, our concern is how the Treasury will make that assessment. More importantly, should the assessment made not be one that, from the perspective of the designated person, fulfils their reasonable living costs? As I said, it is all rather subjective. How will they be able to challenge that and get a variance to the original order? How long would it take for that to be achieved? Again, if it were to take a cumbersome length of time, that would be quite an onerous obligation on the designated person.
I have one question in connection with Amendment 51 in the name of the noble Lord, Lord Davies of Oldham, which seeks to insert “grant” into Clause 13. He suggested that the Bill did not contain any power for the Treasury to grant a licence. Could he say whether there is any other way of reading Clause 13, other than as saying that the Treasury may be able to grant a licence?
Let us deal with that point. I am advised that Clause 13 gives all the power that is necessary to grant a licence. I am grateful to the noble Lord, Lord Davies of Oldham, for trying to help the Government by making sure that the power is in the Bill. However, I am assured, and my noble friend Lady Noakes confirms this, that Clause 13 grants that power.
I will address Amendments 7 and 10 more generally. There are some important issues here. Although the noble Baroness, Lady Falkner, did not spend long speaking to her amendment, she made an important point. These two amendments would clearly require the Treasury, when deciding whether to designate a person, to consider the UK’s international obligations to prevent terrorism. The Treasury would also be required to consider the humanitarian needs of persons affected by designations, including which licences should be granted immediately after the designated person is notified. The key international obligation is United Nations Security Council Resolution 1373, which requires all UN member states to freeze the assets of terrorists and prevent their nationals and persons within their jurisdictions making funds, resources or financial services available to them. However, it is left to individual member states to decide to whom the measures should be applied. The Government recognise that a decision to designate someone has a significant impact on their human rights. It is for this reason that designations can be imposed only where they are necessary to protect the public from a risk of terrorism.
It may be helpful if I explain the process that the Treasury goes through when designating someone. Decisions as to persons who should be subjected to terrorist asset freezes are informed by law enforcement and intelligence agencies, which prepare statements of case setting out the material that gives rise to a reasonable suspicion or belief that the person is or has been involved in terrorist activity, and why the freeze is necessary for public protection. When submitting their recommendations, law enforcement and intelligence agencies also provide a risk assessment framework to inform immediate licensing decisions by the Treasury, and ensure that designated persons are not deprived of access to funds immediately after designation and before the longer-term licensing needs of the person can be addressed. That is also informed by the risk assessment framework. Treasury officials and lawyers then scrutinise the statements of case and make recommendations to the Minister on how to proceed. Where a designation is envisaged, this will include recommendations on immediate licensing needs, in accordance with basic principles of good governance, to ensure that a designated person’s basic needs can be met.
It is important that the asset freeze is applied in a proportionate manner—managing the risk of funds being used for terrorism while ensuring that the human rights of the designated person are protected and that third parties are not adversely affected by the freeze. For this reason, several general licences have been issued—for example, to authorise legal aid to be made available for designated persons and to enable them to take out insurance. We have also made clear in Clause 12(3) that the payment of social security benefits to spouses is not caught by the prohibitions, even when they are made in respect of the designated person. Designated persons can also contact the asset-freezing unit to seek additional licences and to make additional representations in relation to their designation or licensing arrangements at any time.
Where a designation is made public, as they are in all current asset-freezing cases under the Terrorism (United Nations Measures) Order 2009, once the Treasury Minister has taken a decision to designate, a notice is then published on the Treasury’s website. Subscribers to the website, which include the financial sector, receive an automatic notification of the freeze, enabling them to implement it without delay. The designated person is then sent a letter, explaining that they have been designated; setting out the reasons for the designation; enclosing relevant licences; referring to the general licences that are in place; informing them of how to apply for further licences; and informing them of their right to challenge.
I apologise for dwelling on this process but it is important to understand what I perhaps take for granted because I see the paperwork and assessments that are made in every case that comes before me. It may not be clear from the tip of the iceberg that appears in the Bill that, when assessing whether the freeze should be implemented, the Treasury absolutely considers the UK’s international obligations, the national security need and the human rights impact on the designated person. There are also robust arrangements in place, as I have described, to ensure that the human rights of the individual are protected from the outset. Reflecting on all this, the changes made by Amendments 7 and 10 do not need to be written into the legislation. I therefore hope that the noble Lords will withdraw their amendments.
Turning to Amendment 48, I stress again the points that I have just made about licences, which deal with the main issues here. Licences provide a mechanism by which exemptions to the asset freeze can be made and issued, for example to allow designated persons access to funds and economic resources necessary to meet their and their families’ living costs. At present such licences are granted by the Treasury as a matter of course if they are required by the designated person. Therefore, the proposal to place an obligation on the Treasury to issue such licences is unnecessary. It is for those reasons that I hope my noble friends will withdraw Amendment 48.
Finally, Amendment 51 inserts a power to grant a licence under Clause 13(4), which gives the Treasury the power to vary or revoke a licence. I assume that this amendment was tabled from a concern that the clause does not give the Treasury the power to grant a licence. However, as I have described already, partly since subsections (1) and (3) grant such a power, we see no particular value in including the amendment in the Bill. On that basis, again, I hope that the noble Lords will withdraw the amendment.
With the Minister’s categorical reassurance buttressing the comments of the noble Baroness, Lady Noakes, which I also accept as an important contribution, I am happy to withdraw the latter amendment in due course.
We are all aware how significant this legislation is and how judicial review and challenge can occur. Therefore, it is right that we ensure that we are secure about the legislation that we are passing in this House. We have sought that reassurance through a probing amendment. I have now obtained that reassurance.
On the more general issue, I am very grateful to the Minister. He apologised for the length of his reply. However, he should be congratulated on the length of that reply as he identified exactly the areas of anxiety which the Opposition and the wider public might have about the considerations that obtain when these issues arise. After all, these are executive acts. It is very important that we know the context in which executive acts are carried out. I am grateful to the Minister for the extent of the detail that he gave. I reassure him that it was not a waste as we shall not press the relevant amendments. I beg leave to withdraw the amendment.
Amendment 7 withdrawn.
Amendments 8 and 9 not moved.
Debate on whether Clause 2, as amended, should stand part of the Bill.
My Lords, I will make two points. The first relates to the issue that we have been debating, about which I am far from satisfied; that is, the merits of having a process under which it is the Treasury—and therefore Treasury Ministers on the advice of Treasury officials—which designates someone for the purpose of the Bill, and not a judge sitting in chambers acting on an ex parte request or application. The noble Lord, Lord Sassoon, has been extremely conscientious in answering all the points that were put to him this afternoon and I make no personal complaint about that at all. However, I repeat the point that I put to him as I was not satisfied with the response. He still has not revealed what actual practical, substantive advantage there is in having a Minister rather than a judge take responsibility for this initial, crucial act of designation. This is an enormously important matter. If there were strong pragmatic reasons relating to national security and the defence of the lives of individuals, I would be the first to say why we have to take certain action which is unpleasant and unattractive in terms of our civil liberties and why we sometimes have to strike a balance. However, those merits have not been argued and that substantive point has not been put forward and I am still completely in ignorance as to why the Minister has gone down this route rather than another.
We can always speculate and say that Ministers are always inclined to give themselves extra powers whenever they can, that that is a natural instinct of government and that I am being naive in not recognising it. That is a possibility but I tried to help the Minister by suggesting that it might be a question of time. Sometimes time is of the essence in these terrorist cases. Information might come from some source or other which has to be acted on very quickly, say in half an hour, and there is not time to apply to a judge. I offered the Minister that argument if he wanted to pick it up, but he decided not to do so. Perhaps he will now pick it up in responding to me. If he will not do so, may I ask him to deliver another convincing argument—a practical, substantive argument—not just a circular evasion such as saying that it would be appropriate, a right balance or something of that kind? We need to know that, for reasons of principle and practice. I have always been brought up to believe that in a free society any decision expropriating, encumbering, seizing or freezing the property of an individual could properly be made only by the judiciary, not by executive action. I think that is a principle to which we are all attached in this country and in any free society worthy of the name. It can be overridden only for very strong reasons. Therefore, we need to hear those strong reasons.
I also put forward pragmatic points, which are subsidiary and not quite so important, in favour of the judicial route. One is that, however thorough and conscientious the Minister and his officials are in these matters—I am sure that they are—they would be even more alert and thorough in their preparation if they had to go before a judge. Life is like that. The other pragmatic reason has been put in different ways in the House this afternoon. For an individual, a designation order of this kind is obviously a catastrophe. He or she may well stand to lose his or her employment—that point has already been made—but I think of someone who runs a business and suddenly finds that he cannot pay his suppliers or staff or pay back bank loans or something like that while the order is in force. He will certainly face a delay in making contractual payments while he perhaps appeals the designation or applies for a licence. Therefore, an individual may suffer a long-term and serious penalty if he is the innocent victim of an unduly hasty designation. That should make us all pause very strongly. I accept that the Government’s very welcome concession on appeals rather than judicial review means that there would be less time to wait before an appeal takes place. God knows, judicial reviews last a very long time indeed. Nevertheless, as has been pointed out, the waiting time would be a great deal longer than 30 days and would probably last some months. Therefore, it is important that there is an opportunity for a judicial sight of the issue without waiting for the appeal procedure to be triggered.
I shall not pretend to the Government that I am inclined to vote against the clause even if I am not totally satisfied, because I have been entirely undercut by my noble friend the other Lord Davies, who has told me—this was news to me—that the previous Government, of which I was honoured to be a member, accepted the principle that decisions in this area should be made by executive power rather than by judicial decision. My responsibilities in the Government were in very different areas and I did not have the faintest idea at that time that this issue was being debated or decided in that way or any other. As I may be deemed to have collective responsibility for the decision that was taken, although I never said anything about it at the time, it would clearly be rather cynical or opportunistic of me to start making a big issue about it after the event. Nevertheless, I hope that the noble Lord will think that my points deserve a substantive and considered response. I greatly look forward to that.
The other points I want to raise specifically in relation to the text of the Bill are those that I made in general terms on Second Reading about piracy, the hijacking of ships and aircraft and the kidnapping of individuals. As I made clear on Second Reading—no one contradicted me and, indeed, we all know that this is the case—there is a very serious practical problem at present in the Gulf of Aden. We hear about it in the media only when British ships or British nationals are hijacked or abducted. That has happened, although not in recent weeks. However, it is a very common occurrence for ships and their crews to be abducted. I am told by underwriters in the City of London that it is now a regular business for ship owners and their underwriters to pay millions of pounds in ransom money to these particular terrorists, as I call them. That is a very unfortunate situation. Those terrorists or hijackers face no real physical risks at present. They have learnt that the rules of engagement under which NATO and the EU naval forces deploy in the area mean that they will not get fired on if they do not fire in the first place. Therefore, there is very little physical downside from their point of view. There is absolutely no financial downside whatever—that is, of course, the critical point for this debate—as they can quite legally receive and hold these ransom moneys and, indeed, people can legally pay them the ransom moneys. This is an extraordinary situation in which we as taxpayers are paying for these naval forces in the Indian Ocean to try to protect world shipping and the freedom of international trade. We are putting our men and women at risk on Her Majesty’s vessels in that cause, which I believe is a good cause. Yet we are allowing these malefactors who are carrying out these hijackings to receive this money with impunity and enjoy it. This is contributing strongly to the destabilisation of Somalia and is relevant to what I am coming on to in a moment—not least to its appalling consequences for the individuals concerned and the systemic damage to international trade and so on that I have just mentioned. That is because the money received is paying for warlords, the purchase of arms, the bribing of politicians and judges, and the destruction of any stability in that country. It is a very bad story. The western world is simply sitting idly by and watching this money flow to these people.
Here we have a Bill for the seizing and freezing of terrorist assets. The question is: are its provisions applicable to money received by hijackers, kidnappers and pirates? Are the provisions for protection in Clause 7 available to stop people paying this money to such individuals or groups, or are they not? The situation is somewhat ambiguous. Two categories of people or groups can be designated under Clause 1, those designated by the Treasury and those listed in Article 2(3) of Council Regulation (EC) No. 2580/2001 of 27 December 2001. So far as the persons or groups who can be designated by the Treasury are concerned, the Treasury will have regard to the definition of terrorism, which is not of course in this Bill, because it refers to “acts of terrorism” and defines terrorist activity in a rather circular way as,
“the commission, preparation or instigation of acts of terrorism”.
It does not define acts of terrorism or terrorism, but refers in subsection (4) of Clause 2 to the definition of terrorism in the Terrorism Act 2000. I am familiar with that definition, and I am not sure that it would cover the sort of activity that I have been describing, because for such acts to be terrorist acts they would have to be politically motivated in a way that might not apply to some of the cases that I have in mind.
I have also looked at the second category of “natural or legal” persons who could be designated, as set out in Clause 1(b). It refers to the Council regulation which I have just enumerated, which, annoyingly, does not itself contain a definition of terrorism. However, it refers to the definition of terrorism in the Council Common Position of 27 December 2001, which specifically, in Article 3(iii)(c), refers to “kidnapping or hostage taking”, and in (e) to,
“seizure of aircraft, ships or other means of public or goods transport”.
What is more, the intentional provision which establishes that in order to be an act of terrorism there must be an aim of,
“destabilising or destroying the fundamental political, constitutional, economic or social structures of a country”,
is phrased in such a way that could catch the kind of assets which are derived from, or are held with a view to, paying ransoms from hijacking and kidnapping.
My questions to the Government are as follows. First, does the Bill cover assets held by hijackers or kidnappers, or are held with a view to making payments to them? Secondly, if there is any ambiguity about that or any possibility of strengthening the Bill in that regard to make its provisions effectively apply to such assets, is there any intention or willingness by the Government to do so? Thirdly, if that is not the Government’s intention and if the present Bill does not meet the case, do they intend to use another legislative opportunity before too long to make sure that we have a provision for seizing money which is not currently illegal but should be, and is derived from or connected with hijacking or kidnapping? I have a fourth question: are the Government perfectly happy with the present situation and is it reasonable, although we might spend money and risk life trying to combat systematic hijacking in the Gulf of Aden, not to do anything at all to prevent the flows of money which keep that industry alive?
My final point is that if nothing is done to restrict those flows and the accumulation of assets, it will undoubtedly encourage the development of an industry of piracy and hijacking—not merely in the Gulf of Aden but in other parts of the world, because it would seem to be an attractive business with little risk that can be conducted entirely within the law of the land.
My Lords, I do not want to detain the House. I am one of those who has been anxious about designation without involving the judiciary. I am very grateful for Amendment 7 in the names of the noble and learned Lord, Lord Davidson, and the noble Lord, Lord Davies, because, as a probing amendment, it has produced from the Minister a statement on the context in which these decisions are taken. I know that it will be in Hansard, but can a copy of what he has said to us about the Treasury taking these decisions and the responsibilities it takes be put in the Library? People could then look at that and refer to it. I am one of those who now thinks it is right that the Executive should take the decisions and the judges should then look at them. Therefore, I welcome Amendment 57, because the matter has been made clearer by the wonderful probing amendment. Without it, I was still living in a fog.
Perhaps I may end on why this clause should be part of the Bill. On page 10 of his wonderful book, The Rule of Law, the noble and learned Lord, Lord Bingham, quotes Magna Carta. I love his translation, because the old language is pretty difficult. He refers to the terms of chapters 39 and 40, which state:
“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 the law of the land does it, that part of Magna Carta is right. It continues:
“To no one will we sell, to no one deny or delay right or justice”.
I thought that I heard the Minister tell us what the Treasury does. I am comforted and I should like that description to be placed in the Library.
First, I should say that I am grateful to the most reverend Primate. If we have managed to raise a bit of fog through the combination of a probing amendment and a bit of detail from me, and be reminded that we are meeting part of the test in Magna Carta, we will have spent a worthwhile hour or so. He also answered rather eloquently part of the further challenge from the noble Lord, Lord Davies of Stamford, on whether it should be the responsibility of the Executive or the courts to issue the order. I do not know whether the noble Lord is still looking for an answer. He partly answered the question himself, because I was going to start by reminding him that indeed it was the previous Government who operated the regime in this way. It was the Bill passed by this House which became an Act in February—
I will try briefly to help the Committee. There is a judgment to be taken in many areas where the Executive exercise authority that could be handed over to other people; the courts might be one place to which it could be handed over. However, I fundamentally believe that actions and decisions to prevent the commission of acts of terrorism, as the noble Lord points out, often must be taken under very considerable pressure of time and require fine judgments of operational matters which, as I have attempted to describe, involve the intelligence and law enforcement agencies. The combination of the flow of information, the time required and the complexity of decisions is suited to decision-making by the Executive, subject to the important safeguards of the courts. I do not know what more I can do, other than say to the noble Lord that I absolutely agree that some of the speed and operational considerations that he raises are ones that make these decisions a proper function of the Executive.
I will also say that I do not accept the word “catastrophe” if it relates to somebody who is reasonably suspected or believed to be involved in a way that leads to the freezing of their assets, subject to the safeguards. We have put in place licensing provisions, and I explained at some length how those are operated right from the start of the designation. Of course it is a serious matter to freeze somebody's assets, but when we talk about the balance against protecting the public against terrorist acts, we should be careful about using “catastrophe”, given the nature of the threat on the one hand and the protections that I have described on the other.
I will move on swiftly to the question of piracy, kidnapping and hijackers. Of course the Government take all these matters extremely seriously. In so far as they are linked to terrorism, as defined in the way that the noble Lord has set out, they will come within the provision of the Bill; but often piracy, kidnapping and hijacking will be independent of terrorism and so not the proper province of the Bill. However, this absolutely does not mean that the Government do not take this seriously, particularly the question of ransom payments. We do not encourage the payment of ransoms. There is a range of other ways, for example through the money-laundering rules, in which aspects of the transmission of illegal money are dealt with, and the Government continue to keep under review all these matters. I suggest that, although it is important that they are raised, they go beyond not only Clause 2 but the Bill itself. I ask the Committee to agree that Clause 2 should stand part of the Bill—
I am grateful to the noble Lord for giving way at the last minute. I take note of the fact that obviously we are all reassured that the Government do not actively encourage the payment of ransoms and that they take the matter very seriously. However, if the problem is so serious—and the noble Lord agrees that it is serious—we should do something about it. The Government, after the election, now have a responsibility to do something. I would be grateful if the noble Lord will give an undertaking to the Committee that he will discuss with his colleagues what might be done, either legislatively or by use of executive power, to inhibit the payment of ransoms, or at least look again to see what could be done more effectively to make these activities less cost-free and risk-free to the terrorists.
Clause 2, as amended, agreed.
Amendment 10 not moved.
Clause 3 : Notification of designation
11: Clause 3, page 2, line 23, leave out “designate” and insert “make a final designation of”
Amendment 11 agreed.
12: Clause 3, page 2, line 26, leave out “must” and insert “may”
I shall speak also to Amendment 13 and hope that discussion of the two amendments will take two or three minutes rather than 23. Noble Lords are accustomed to hearing debates about changing the term “may” to “must” in legislation. My amendments would change the term “must” to “may”. They are about notifying designation and about publicity. Clearly, the Treasury must tell the banks, which it does by way of the consolidated list, but I am concerned here, as I am in other parts of the Bill, with the stigma that is allied to designation, and the effect on the family.
The conditions in Clause 3(3) that allow the Treasury not to publicise the designation are very specific. I should like to give the Treasury some discretion, although I accept that it may not use it, to pause and take account of the wider concerns that I have expressed. The clause is important: the offence is dealt with later, but there is a serious point here and I shall be interested to hear what the Minister says about the Treasury's approach.
It was very helpful to hear him explain what lies under the tip of the iceberg, as he described it, when it comes across his desk; but I am sure that he will accept that legislation needs to give assurances both about the tip and about what is concealed under the surface of the sea, and that what the Treasury does as a matter of practice, when it is good, needs to be enshrined in legislation so that it cannot be varied without Parliament being aware. He will not have had the experience that other noble Lords have had of saying: “Yes, Minister, you’re fine, but what about your successors?”. I beg to move.
My Lords, I fully appreciate that the intention of Amendments 12 and 13 is to give the Treasury flexibility when determining whether to publicise a designation. However, the Treasury believes that the automatic publication of designations on its website where the conditions of Clause 3(3) are not met is the most efficient and effective way of achieving the appropriate level of awareness and compliance with the asset freeze. It is the most effective method of informing the financial sector and other parties of their asset-freezing obligations, and thus of limiting the risk of the prohibitions—
I apologise to my noble friend for interrupting him in mid-flow, but I wanted to capture his previous sentence. As I understand it, there is nothing to prevent the Treasury from advertising on its website if we substitute the word “must” for “may”. The Treasury may still do so—and, I am sure my noble friend agrees, must do so—but we do not need the word “must” here.
If my noble friend will permit me to go on, I will get to the answer to that challenge and explain why, in the round, the current construct works. We need the most effective method of informing the financial sector and other parties of their asset-freezing obligations to limit the risk of the prohibitions in the Bill being unwittingly breached in relation to funds being diverted for terrorist purposes. I accept that such an aim is not inconsistent with Amendments 12 and 13, but, if I may go on, let me complete what I was saying about our reasoning for believing that the Bill as it stands works well.
We recognise that, yes, publication would interfere with the listed person’s right to respect for their private life, but we believe that greater weight must be given to the public interest in ensuring that a designation is effective and that a designation will be most effective when generally publicised. Indeed, the Supreme Court has acknowledged the public interest in publicising designations generally. In January, the court ruled that the identity of four designated persons could be made public and that anonymity orders were justified only in an extreme case where there was significant risk to the designated persons or their families. There are no reports of any individual being harmed as a result of their asset freeze being publicised. Indeed, general publication is consistent with international best practice and the FATF guidance. The EU publishes on its website details of those persons who have been designated under the respective regimes. If the UK were to cease publicising designations generally in all cases other than when a restricted publication was justified under Clause 3(3), that would give rise to an approach that was inconsistent with those of international partners and international guidance and best practice.
For the reasons that I have set out, I hope that your Lordships will support maintaining the current drafting of the Bill and that my noble friend will withdraw Amendment 12.
My Lords, I had not thought of the point about danger to the designated person and his family. Actually, I can see that that could be a serious concern.
I am still not persuaded that Amendments 12 and 13 would inhibit the Treasury acting as the Minister described. I am sure that this is not his intention, but his response seems almost to amount to a fear that the Treasury cannot be trusted to make a sensible decision. However, although I am not persuaded, I will not pursue the matter further so I beg leave to withdraw Amendment 12.
Amendment 12 withdrawn.
Amendment 13 not moved.
Clause 3, as amended, agreed.
Clause 4 : Duration of designation
Amendment 14 not moved.
15: Clause 4, page 3, line 2, after “A” insert “final”
Amendment 15 agreed.
Amendments 16 and 17 not moved.
Amendments 18 to 23
18: Clause 4, page 3, line 4, after “a” insert “final”
19: Clause 4, page 3, line 6, after “renewed” insert “final”
20: Clause 4, page 3, line 9, after second “of” insert “final”
21: Clause 4, page 3, line 9, at end insert “final”
22: Clause 4, page 3, line 11, after “a” insert “final”
23: Clause 4, page 3, line 12, after “a” insert “final”
Amendments 18 to 23 agreed
24: Clause 4, page 3, line 14, leave out “they consider appropriate” and insert “are necessary”
In speaking briefly to Amendments 24 and 28, I perhaps come from a different stance from that for the previous group of amendments.
In both Clause 4, “Duration of designation”, and Clause 5, “Variation or revocation of designation”, as currently drafted, the Treasury must,
“take such steps as they consider appropriate”,
to bring such matters to the attention of the persons who have already been informed of the designation. Amendments 24 and 28 would change “they consider appropriate” to “are necessary”. First, I simply want to understand why it is necessary for the Treasury to have the slight subjectivity—the discretion, if you like—that is allowed in the clauses as drafted. Secondly, I want to ask whether “appropriate” implies a degree of reasonableness. Could the Treasury take a completely off-the-wall view, or must it act reasonably in Clauses 4 and 5?
Let me try to address my noble friend’s concerns about Clauses 4 and 5. As she said, Amendments 24 and 28 would remove the Treasury’s discretion to determine subjectively the steps that it considers appropriate and replace it with an obligation to take steps that are objectively necessary. Let me try to explain why the Government believe that the amendments are unnecessary.
In practice, the Treasury will consider what steps are objectively necessary. In determining the appropriate steps to be taken, the Treasury will be conscious that the determination should be objectively justifiable, as a decision not to take a step that would be objectively construed as being necessary would be subject to legal challenge on the basis of being unreasonable. The Treasury will in practice decide on a case-by-case basis the best way to notify persons that a designation has expired, been varied or been revoked, with full consideration being given to the particular circumstances of the case of the designated person and of any other relevant factors. In practice, designated persons will always—unless they cannot be traced because, for example, they have gone overseas—be notified in writing that their designation has expired or been revoked or varied. Details of the change will be notified to other persons in the same way as the original designation.
The Treasury’s duty to notify is underpinned by the requirement in Clause 37(3), which states:
“Where the Treasury do not have an address for the person, they must make arrangements for the notice to be given to the person at the first available opportunity”.
I absolutely agree that it is important that persons informed of a designation are also informed of its expiry, revocation or variation and that such information should be provided in the most appropriate way. However because of the way that, as I have described, that will happen in practice, I do not believe that Amendments 24 and 28 are required. I hope that noble Lords will agree that it is not necessary to amend the Bill in this respect.
On that basis, I hope that my noble friend will consider withdrawing Amendment 24.
Amendment 24 withdrawn.
Clause 4, as amended, agreed
Clause 5 : Variation or revocation of designation
25: Clause 5, page 3, line 17, after “a” insert “final”
Amendment 25 agreed.
Amendment 26 not moved.
27: Clause 5, page 3, line 18, after “a” insert “final”
Amendment 27 agreed.
Amendment 28 not moved.
Clause 5, as amended, agreed.
Amendments 29 to 32
29: After Clause 5, insert the following new Clause—
“Treasury’s power to make interim designation
(1) The Treasury may make an interim designation of a person for the purposes of this Part if—
(a) they reasonably suspect—(i) that the person is or has been involved in terrorist activity,(ii) that the person is owned or controlled directly or indirectly by a person within sub-paragraph (i), or(iii) that the person is acting on behalf of or at the direction of a person within sub-paragraph (i), and(b) they consider that it is necessary for purposes connected with protecting members of the public from terrorism that financial restrictions should be applied in relation to the person.(2) Subsections (2) to (4) of section 2 (Treasury’s power to make final designation: definitions) apply for the purposes of this section as they apply for the purposes of that section.
(3) The Treasury may not make more than one interim designation of the same person in relation to the same evidence.”
30: After Clause 5, insert the following new Clause—
“Notification of interim designation
(1) Where the Treasury make an interim designation of a person, they must—
(a) give written notice of the designation to the designated person, and(b) take steps to publicise the designation.(2) Unless one or more of the following conditions is met, the Treasury must take steps to publicise the designation generally.
(3) The conditions are that—
(a) the Treasury believe that the designated person is an individual under the age of 18, or(b) the Treasury consider that disclosure of the designation should be restricted—(i) in the interests of national security,(ii) for reasons connected with the prevention or detection of serious crime, or(iii) in the interests of justice.(4) If one or more of those conditions is met, the Treasury must inform only such persons as they consider appropriate.
(5) If that ceases to be the case, the Treasury must—
(a) give written notice of that fact to the designated person, and(b) take steps to publicise the designation generally.”
31: After Clause 5, insert the following new Clause—
“Duration of interim designation
(1) An interim designation expires—
(a) at the end of the period of 30 days beginning with the date on which it was made, or(b) on the making of a final designation in relation to the same person,whichever is the earlier.(2) Where an interim designation expires the Treasury must—
(a) give written notice of that fact to the designated person, and(b) take such steps as they consider appropriate to bring that fact to the attention of the persons informed of the designation. (3) Where an interim designation expires on the making of a final designation in relation to the same person—
(a) a notice under subsection (2) above may be combined with a notice under section 3(1)(a), and(b) steps under subsection (2) above may be combined with steps under section 3 to publicise the final designation.”
32: After Clause 5, insert the following new Clause—
“Variation or revocation of interim designation
(1) The Treasury may vary or revoke an interim designation at any time.
(2) Where an interim designation is varied or revoked the Treasury must—
(a) give written notice of the variation or revocation to the designated person, and(b) take such steps as they consider appropriate to bring the variation or revocation to the attention of the persons informed of the designation.”
Amendments 29 to 32 agreed.
Clause 6 : Confidential information
33: Clause 6, page 3, line 24, after “3(4)” insert “or (Notification of interim designation)(4)”
Amendment 33 agreed.
34: Clause 6, page 3, line 31, leave out “, or has reasonable cause to suspect,”
My Lords, I shall speak also to Amendments 36, 37, 39, 40 and 43. Clause 6 creates an offence, so we must be very confident that that offence is on a proper basis. My amendments would change the words,
“or has reasonable cause to suspect”,
in the context of a person knowing or suspecting that certain information is to be treated as confidential, to “reasonably suspects”. The same point comes up in a number of places in the Bill. The two terms are obviously extremely close but “reasonable cause to suspect” is about the reason for the suspicion, whereas “reasonably suspects”—my alternative phrase—is about the suspicion itself. One needs to ask whether the suspicion is reasonable in the round, as distinct from merely whether it is reasonable to believe in whatever caused the suspicion. Indeed, with regard to the term in the Bill, “reasonable cause to suspect”, I might add the question: does the person have to have the suspicion or can he be guilty of an offence—I stress that this is why this issue is important—if he believes something that would lead a reasonable person to suspect although the person himself does not form the suspicion? If someone says “angels and pinpoints” I shall understand, but I think that there is an issue there.
Amendment 36, quite differently, would take out the reference to “any other enactment” in Clause 6(4)(c), where disclosure is permitted if it is necessary to give effect to a requirement under this part or under any other enactment. I have tabled this amendment in order to ask the Government to justify those words and to explain why it cannot be left to the “other enactment” to deal with the situation. I beg to move.
I shall take Amendments 34 and 36 in turn. Amendment 34 would limit the effectiveness of the provisions concerned with protecting the confidentiality of information provided by the Treasury to certain persons in connection with a designation. It would mean that only those who know, as opposed to those who have reasonable cause to suspect, that information they possess is to be treated as confidential may commit an offence by disclosing it. This would weaken the protections afforded to confidential information and thus potentially adversely affect the designated person’s rights.
It is right that those who have reasonable cause to suspect that information they possess is to be treated as confidential should be subject to criminal sanctions if they disclose such information. If a person had reasonable cause so to suspect but claimed not to have any suspicion and went on to disclose the information, it could be said that the person ought to have held a suspicion, in which case such disclosure should be prohibited. The current drafting of the clause provides the greatest degree of protection to the confidentiality of the information that the Treasury has provided. This is a complex series of interlinkages but I hope that on the basis of that construction my noble friend will withdraw her amendment.
Amendment 36 would limit lawful disclosure to circumstances where disclosure was necessary to give effect to a requirement imposed under or by virtue of Part 1 of the Bill only and not any other enactment. The amendment would have the effect of prohibiting disclosures which are required to give effect to any requirements imposed by any other Acts of Parliament. This would, for example, prevent disclosures concerning money-laundering or terrorist financing being made to the Serious Organised Crime Agency under either the Proceeds of Crime Act 2002 or the Terrorism Act 2000 with the consequence that the person concerned would be in breach of the statutory requirements contained in another Act. Preventing such disclosures would of course have a serious impact on the UK’s operational effectiveness in fighting crime, and delaying such disclosures while authority to disclose was sought from the Treasury would have an adverse operational impact. Therefore, as with the other amendment, I hope that my noble friend will not press Amendment 36.
My Lords, I am grateful for that. I had to think very carefully about how to express the bulk of my amendments, and indeed I had to take care to read my notes accurately. Similarly, I think that I need to read the Minister’s reply carefully to ensure that I understand it. For the moment, I beg leave to withdraw the amendment.
Amendment 34 withdrawn.
Amendments 35 and 36 not moved.
Clause 6, as amended, agreed.
Clause 7 : Freezing of funds and economic resources
Amendment 37 not moved.
Clause 7 agreed.
Clause 8 : Making funds or financial services available to designated person
38: Clause 8, page 4, line 32, after “indirectly” insert “, with the intention of benefitting the designated person”
I shall speak also to Amendments 41, 42, 44 and 49. Here, we come to the prohibitions—again, creating offences—and there are a number of terms which I am seeking to understand through these amendments. The first is the term “indirectly”, whereby funds, services, economic resources and so on may not be made available directly or indirectly. I could just have sought to delete the word “indirectly” but I can see that it must mean something, and in the context of this issue I do not want to suggest that we are seeking to weaken the arrangements. Therefore, I have chosen instead to insert the words,
“with the intention of benefitting the designated person”,
but, as the Minister will have guessed, my real concern is to know what might be covered by the term “indirectly”.
The other term that concerns me is “partly”. To take the first point at which it arises—in Clause 9—the definition of “financial benefit”,
“includes the discharge of a … obligation for which the designated person is wholly or partly responsible”.
My concern here is perhaps a little different because the situation might arise in which the spouse of a designated person wants to make a payment on a joint mortgage. It seems to me that that would be prohibited, although it could obviously be licensed.
This is all about the family. I accept that there is a proposed new clause about social service benefits, but I wonder whether it is extensive enough. Joint mortgage was one example. Obviously, joint accounts will be frozen—I say obviously, but maybe I will be corrected. Will a spouse’s separate account be affected? To take a different situation, if the spouse’s employer fears that the spouse’s wages are going to a designated person, how should the Treasury, or anybody else, react? Can we have reassurance that the spouse’s income will not be stopped because the terms of the legislation are such that the employer might fear that he is committing an offence?
Amendment 40 specifically addresses joint assets and requires the Treasury to grant a licence, so I am coming at this from a number of different directions. I look forward to hearing what the Minister has to say and beg to move.
My Lords, as the amendments in this group enjoy a similar theme, it is perhaps not surprising that the Government’s position on the amendments also is similar. Amendments 38 and 42 relate to Clauses 8(1) and 10(1) respectively. These clauses prohibit the making of funds, financial services and economic resources available directly or indirectly to a designated person where the person providing the funds, financial services or economic resources knows or has reasonable cause to suspect that the ultimate recipient is a designated person and, additionally, in the case of economic resources, knows or has reasonable cause to suspect that the designated person would be likely to exchange them or use them in exchange for funds, goods and services. As for my noble friend’s initial question on the import of the word “indirectly”. Quite simply, it means that the benefit is directed through a third party and not the designated person.
The amendments would mean that a person could be prosecuted for breaching these prohibitions only if it could additionally be proved that that person intended the funds, financial services or economic resources to benefit the designated person. There is a concern that that would add a layer of complexity to the prohibitions and make it much more difficult effectively to enforce them. In these circumstances any prosecution would require proof beyond reasonable doubt that the person harboured the intention that the designated person should benefit from such funds, financial services or economic resources.
The Government do not support these amendments for two reasons. First, the amendments increase the difficulty with which the prohibitions can be enforced. Secondly, the Government do not believe that they achieve what is believed to be their intended effect, which is to provide a further protection to parties who unwittingly make funds, financial services or economic resources available directly or indirectly to a designated person. The prohibitions are already drafted so that persons who do not know or have no reasonable cause to suspect that they are breaching them, are not caught. It is therefore somewhat superfluous to require further that the prohibitions should apply only to those who intend that the funds, financial services or economic resources provided should benefit the designated person.
The prohibitions in Clauses 9(1) and 11(1) are designed to prohibit making funds, financial services and economic resources available to a third party where the designated person does not receive the funds, financial services or economic resources respectively but nevertheless derives some sort of significant financial benefit from their provision. A person commits an offence under these prohibitions only if he knows or reasonably suspects that the designated person will enjoy such a benefit.
Amendments 41 and 44 would narrow the circumstances in which a person may be found to have breached the prohibitions in Clauses 9(1) and 11(1) on making funds, financial services or economic resources available. The amendments would narrow the circumstances in which the financial benefit might be conferred by stating that only the discharge of financial obligations owed wholly, and not just partly, by the designated person would constitute a financial benefit. I fully understand where my noble friend is coming from on this, but this would allow a third party to meet a financial obligation partly owed by a designated person and would therefore provide a benefit for that designated person.
We believe that the purpose of these amendments is to provide protection from prosecution to persons who may be seeking, for example, to discharge the financial obligation of a designated person’s wife—her rent, for example, whether by paying funds to the landlord or providing the landlord with an economic resource that can be used to obtain funds—which would have the incidental effect of discharging a financial obligation partly owed by the designated person, obviously, if the rent was in respect of premises which they both leased. As drafted, the prohibitions in Clauses 9(1) and 11(1) would prohibit this if the benefit derived by the designated person was significant. However, we believe that the prohibitions, as currently drafted, provide a sufficient safeguard for those who discharge a financial obligation partly owed by the designated person. To commit the offence, the person needs to have known or had reasonable cause to suspect that the offence was being committed, and this requirement would not be met if they do not know or have reasonable cause to suspect that the financial obligation is shared by the wife and the designated person. Even when the person knows that the financial obligation in question is shared—this is the crucial issue—it is open to such a person to apply to the Treasury for a licence to allow the discharge of that obligation on behalf of the designated person and the person with whom the obligation is shared.
The purpose of the Clauses 9(1) and 11(1) prohibitions is in part to give the Treasury oversight of how the designated person is financially supported so that appropriate licences can be drawn up that authorise the designated person to have appropriate access to funds. We believe that the licensing system has the flexibility to deal with the kind of concerns quite properly raised by my noble friend.
By a similar token the purpose of Amendment 9 would appear to require the Treasury to grant a licence where an asset is jointly owned by a designated person and another person who is not a designated person, so the latter can use the asset as long as it does not contravene the prohibitions set out in Clauses 7 to 11.
We readily recognise concern about the effect that the prohibitions can have on spouses and family members of designated persons and have sought to minimise them wherever possible. A jointly owned asset would ordinarily be caught by the prohibitions, and if the asset fell within the definition of funds there would be a prohibition against dealing with it. But where the dealing would create no terrorist-financing risk, the policy of the Treasury is to grant a licence to the non-designated person. We very much believe that prompt licensing, taking into account the considerations but allowing Treasury oversight of the funding of the designated person, is the best way of addressing the noble Baroness’s genuine concerns and retaining oversight in dealing with any assets which the designated person controls.
With that explanation and reassurance with regard to the flexibility and use of the licensing scheme, I hope that my noble friend will withdraw her amendments.
My Lords, I shall certainly do so. I am grateful for the Minister’s explanation of the term “indirect”. On his point that I dealt with the term “partly” and thus added complexity, I think I would say, “So?”. If my amendments do not achieve their objective, that is another point.
I remain concerned about the licensing relying on Treasury policy rather than flowing from the provisions of the statute. The Minister recognises that that is a serious point and I think he will also recognise that there is a line between relying on current policy, which may be changed dramatically or morph into something else, and having the reassurances that a provision in legislation would provide. I wonder whether I can talk to him on Report about this point, not about the rest of the group of amendments, to see whether something might be achieved that we both want to achieve. I beg leave to withdraw the amendment.
Amendment 38 withdrawn.
Amendment 39 not moved.
Clause 8 agreed.
Clause 9: Making funds or financial services available for benefit of designated person
Amendments 40 and 41 not moved.
Clause 9 agreed.
Clause 10: Making economic resources available to designated person
Amendment 42 not moved.
Clause 10 agreed.
Clause 11: Making economic resources available for benefit of designated person
Amendments 43 and 44 not moved.
Clause 11 agreed.
Clause 12: Exceptions
45: Clause 12, page 6, line 12, at end insert—
“( ) The prohibitions in section 8 to 11 are not contravened by the provision or funding of the provision of legal representation, legal advice or other legal services of, to, or for the benefit of the designated person.”
My Lords, at last we come to some single amendments. Amendment 45 would provide that the prohibitions that we have just been discussing are not contravened by the provision or funding of the provision of legal representation, advice or other legal services for the benefit of the designated person.
I understand that the practice—again, there is a distinction between practice and legislation—is that a general licence is granted by the Treasury for legal aid. One must put in brackets that we know what is happening to the provision of legal aid more widely; it has been becoming less and less available. With this amendment, I am not trying to find a loophole for the prohibitions to be avoided—perhaps evaded would be the right word. It has been put to me in discussion with Ministers and the Bill team—I have left it rather late, but I should thank them for the time that they have spent discussing the Bill with me before today—that money might go to a dodgy lawyer who would pass it on to a designated person. Obviously, that would be an offence.
It goes against every fibre of both my being and my legal training to see anything that might deny access to legal advice and representation—in other words, access to justice. I wait to hear whether there are loopholes in the amendment, but I think that the principle is important. I beg to move.
My Lords, I am very sympathetic to the amendment for two reasons. First, it seems to me right and proper to allow a person to use as much of their financial resources as they see fit to pay for legal advice and assistance. To impose restrictions on them in that respect is simply to interfere with the administration of justice. Secondly, I cannot see that the Treasury has any interest whatever in preventing a person using their own funds to pay for legal advice and assistance. The Treasury’s only legitimate interest is in preventing the use of the funds for the purposes of terrorism. If the money is being paid to someone who is regulated by the Law Society or the Bar Council—I appreciate that the amendment may need some tinkering to cover those points—I cannot see that the Treasury can have any legitimate concern as to the improper use of the money for purposes associated with terrorism. If the Minister takes a different view and there is evidence to suggest that persons who are regulated by the Law Society or the Bar Council are or may be acting improperly in this respect, please will he tell the House and explain what steps the Government are taking to draw such concerns to the attention of the proper regulatory authorities?
My Lords, this is an important amendment, and one that is somewhat foreshadowed by the comments of the most reverend Primate the Archbishop of York when we debated an earlier set of amendments. The effect of the amendment would be that any payments the purpose of which was to pay legal expenses of a designated person would not require a licence. As a result, the Treasury would have no oversight of such payments.
It is important to emphasise that that would include payments not just directly to solicitors and law firms but to designated persons themselves if the purpose were to pay legal expenses. This could include payments made by one designated person to another if the first designated person had access to free funds.
I understand the legitimate concerns that have prompted the amendment. I emphasise without equivocation that a designated person must be in a position at the earliest possible opportunity to challenge a designation or any other related decision made by the Treasury under the Bill, but I believe that the existing licensing scheme meets this requirement. Licences already provide a controlled mechanism whereby designated persons can be provided with funds to pay for legal representation with adequate conditions in place to control the risk of funds being diverted to support terrorism. A designated person or any other affected party may also request a licence at any time.
Moreover, the Treasury has issued a general licence that applies to all designated persons to enable eligible legal aid payments to be made. I give the assurance that that will be replicated once the Bill is enacted. That general licence ensures that a designated person will have immediate access to legal representation where they qualify for legal aid. Any other party may request a licence at any time to pay for a designated person's legal expenses. I emphasise that the general presumption is that where a licence is requested to pay for legal costs, it will be granted.
The Government believe that this is the proper and effective way to deal with the provision of funds in relation to legal services provided both by the state, under the legal aid system, and by other persons. It does not and is not intended to impede a designated person's ability to access justice, which we think is very important, but it also ensures that the Treasury can maintain oversight of a designated person's expenditure. I hope that, against that background and with that reassurance, the noble Baroness will be willing to withdraw her amendment.
My Lords, we come up against the issue of policy and legislative provision yet again. The oversight by the Treasury could be provided by requiring reporting to the Treasury. I take the point about regulated providers made by the noble Lord, Lord Pannick, and the point about not permitting payment to the designated person made by the Minister. Subject to those points, I do not see a lot wrong and I see a lot right with my proposition and, again, I do not want to abandon it tonight. However, for the moment, I beg leave to withdraw the amendment.
Amendment 45 withdrawn.
Clause 12 agreed.
House resumed. Committee to begin again not before 8.29 pm.