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House of Commons Hansard
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Counter-Terrorism and Border Security Bill (Sixth sitting)
05 July 2018

The Committee consisted of the following Members:

Chairs: Mrs Anne Main, † Joan Ryan

† Bowie, Andrew (West Aberdeenshire and Kincardine) (Con)

Chapman, Douglas (Dunfermline and West Fife) (SNP)

† Coyle, Neil (Bermondsey and Old Southwark) (Lab)

† Dakin, Nic (Scunthorpe) (Lab)

† Doughty, Stephen (Cardiff South and Penarth) (Lab/Co-op)

† Foster, Kevin (Torbay) (Con)

† Hall, Luke (Thornbury and Yate) (Con)

† Hoare, Simon (North Dorset) (Con)

Huq, Dr Rupa (Ealing Central and Acton) (Lab)

† Khan, Afzal (Manchester, Gorton) (Lab)

† Lopez, Julia (Hornchurch and Upminster) (Con)

† Maclean, Rachel (Redditch) (Con)

† Maynard, Paul (Lord Commissioner of Her Majesty's Treasury)

† Newlands, Gavin (Paisley and Renfrewshire North) (SNP)

† Pursglove, Tom (Corby) (Con)

Smith, Eleanor (Wolverhampton South West) (Lab)

† Thomas-Symonds, Nick (Torfaen) (Lab)

† Wallace, Mr Ben (Minister for Security and Economic Crime)

† Warman, Matt (Boston and Skegness) (Con)

Nehal Bradley-Depani, David Weir, Committee Clerks

† attended the Committee

Public Bill Committee

Thursday 5 July 2018

[Joan Ryan in the Chair]

Counter-Terrorism and Border Security Bill

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Good morning, everyone. The selection list for today’s sitting is available in the Committee Room. The amendment paper printed for today’s sitting contains, in error, some amendments that we have already considered. Please turn to page 7, where we shall begin with amendment 26 to clause 19. Copies of the written evidence received by the Committee are also here.

Clause 19

Terrorism reinsurance

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I beg to move amendment 26, in clause 19, page 19, line 27, at end insert—

“(4) Where an event occurs which the Secretary of State has grounds to believe may be an act of terrorism for the purposes of terrorism reinsurance, the Secretary of State must within three days of the event make a statement that—

(a) the event is or is not an act of terrorism for the purposes of terrorism reinsurance; or

(b) there is not yet enough evidence to make a statement under paragraph (a) and set a timeframe for when it is expected that such a statement is likely to be made.”

This amendment would require the Secretary of State to make a statement in relation to whether an event is an act of terrorism within three days of the event occurring, or else provide a statement of when such a statement is likely to be made.

It is a great pleasure to serve with you in the Chair, Ms Ryan. I hope the amendment is self-explanatory, so I shall keep my comments to a minimum. Under the Reinsurance (Acts of Terrorism) Act 1993, the Treasury holds responsibility for providing certificates of classification for acts of terror. Members might think that that duty would more sensibly sit under the Home Office, given its wider responsibilities for policing and security. The Bill is the chance to update that obvious discrepancy and to speed up classification to better help those affected when terror attacks occur. The Government and the security services tell us that the threat remains severe so, sadly, further attacks will come.

Under existing arrangements, the Treasury is supposed to classify within 21 days, but in practice that varies widely. There is also a contrast with individual Ministers, who often state on the day or the next day after an attack occurs that it was terrorism, but official certification takes longer. Ministerial comment should act as a guide to insurers and others involved, but the practical experience at London Bridge and Borough market in my constituency has taught me that that does not always happen, leaving those distraught after an attack with further problems just knowing how and when those with insurance can claim back losses.

I believe that the Westminster attack took 11 days to classify, and the London Bridge and Borough market one took far too long to declare: that happened 21 days after the attack, and only following pressure as a result of an Evening Standard intervention on behalf of classification. Those delays have consequences. The amendment aims to tackle situations in which businesses hit by terrorists are then held up by a convoluted process in moving on with their lives and their business.

As mentioned on Tuesday, claiming on insurance after attacks is tough enough. One insurer told a business affected by the Borough market attack that it was not covered for terror attacks, and the same insurer told another firm—one with terror insurance—that the Borough market attack had not been classified and that no payment could be made. That is simply not good enough, and the amendment would end that bad practice.

The amendment would allow for swifter declaration, in line with ministerial statements, and would protect businesses further and better. The uncertainty and delay over London Bridge and Borough market caused more anxiety for those affected at an already difficult time. It is unnecessary and unhelpful to experience delays in accessing the support that is supposed to be there in very tough circumstances, with businesses already badly damaged.

Ministers have claimed previously that London Bridge and Borough market took longer to classify due to the involvement of three police forces: the British Transport police, the Met and the City of London police. Blaming police forces that did so much to end the attack so swiftly and to help all those affected is simply distasteful. The amendment could provide a swifter process, to prevent police officers from being blamed for delays to classification.

Members may have concerns that a three-day limit is too short a timeframe in more complex incidents, but the amendment is designed not to be overly prescriptive—I thank the Clerks for helping me draft it. Cyber-attacks, by their very nature, can take more time to identify—months, in some cases—and any return to planting bombs around buildings or infrastructure without the involvement of suicidal attackers might also take more time to investigate to confirm motives. The amendment would allow for that.

The three-day process is designed for the more obvious attacks, such as that in my constituency last year. Ministers and the Prime Minister stated on the day that it was a terror attack—weeks before formal classification. However, the amendment includes a means of deferring formal declaration for more complex attacks. It would make a helpful, practical difference to employers affected by terror in the immediate aftermath. For attacks that take longer to classify, the amendment allows a statement to be made indicating what that time might be. At the time of any event, and in the face of all the facts, which may or may not be in the public domain, it would be entirely up to Ministers to make that statement and give direction, without that being burdensome.

The proposal would allow insurers and Pool Reinsurance to step in more swiftly to support those affected by any future attack. I hope that the amendment is welcomed by the Government, and I look forward to the Minister’s reply.

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It is nice to serve under your chairmanship, Ms Ryan.

As the hon. Member for Bermondsey and Old Southwark (Neil Coyle) explained, the intention behind the amendment is to ensure that the Government make a public statement three days after an incident about whether it is an act of terrorism as defined by the Reinsurance (Acts of Terrorism) Act 1993. If that is not possible within three days, the amendment would require the Government to provide an estimate of when they will be able to make such a statement.

The amendment would significantly alter the current process, and would introduce uncertainty for businesses and insurers during what is already a stressful and challenging time, following a terrorist attack. The 1993 Act requires that reinsurance and guarantee arrangements can be extended only for losses related to acts of terrorism, as defined by the Act. There is an established contractual process, under which an incident is certified as an act of terror in accordance with the 1993 Act. That important process is designed to give the insurance industry certainty about whether an incident is within those reinsurance or guarantee arrangements.

In the case of the Government-backed terrorism insurer, Pool Re, Her Majesty’s Treasury has an agreed deadline to certify whether an incident is an act of terrorism. It must do so within 21 days of receiving a certification request from Pool Re. It is worth clarifying that Pool Re’s formal certification request may not necessarily arrive on the day of the terror event, as it is driven by whether any of its members have received a claim.

The Treasury treats certification as a priority, to ensure that Pool Re and its members can proceed with the claim process. That means that businesses can get the financial protection they have paid for through insurance contracts. The Westminster, Manchester and London Bridge attacks in 2017 were all certified within 21 days. For example, the Manchester Arena attack was certified within five business days of the certification request being received from Pool Re.

Once such a request has been received, Treasury officials consult the police and the Home Office before giving advice to the Chancellor of the Exchequer, who makes a final decision about whether an event should be certified as an attack. That certification process properly sits with the Treasury, as the Chancellor’s approval is ultimately required to authorise any financial support required for Pool Re.

Pool Re is not the only underwriter of terrorism risk in the country. Many businesses across the UK are insured via contracts with different terms, conditions and certification processes. That means that if the Government were to make a public statement about the status of the certification process, as it related to Pool Re, it would risk confusing those businesses about the status of their own claims.

I know that the hon. Member for Bermondsey and Old Southwark is particularly concerned about the length of time it took for the horrific terrorist attack in his constituency in June last year to be certified, and I am very conscious of the impact that any delays can have on businesses. I have therefore asked that our officials look at why the process is not quicker after a Pool Re certification request comes to the Treasury, given that, as Security Minister, I sometimes know within minutes or hours whether an attack is a terrorist offence. Indeed, the head of counter-terrorism often makes a public statement to that effect within hours, not days.

I have taken the essence of the hon. Gentleman’s amendment and his constituents’ concerns and sought to follow up to see why it takes so long when a request enters the Government system—I cannot do much about how long it takes for claimants to submit a claim. The clock starts not once the event happens but once a claimant makes a claim to an insurer, and then the insurer triggers the Pool Re request. That could take time, depending on loss adjustment and that end of the process.

I assure the hon. Gentleman that I will seek to improve the performance of the process and to find out why it takes so long once the Government formally receive a request. His point is well meant, and I do not disagree with it. I cannot see why the process takes so long in some cases. I assure him that I will follow that up. I hope my assurances, which I will keep the hon. Gentleman updated on, are enough to persuade him to withdraw his amendment.

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I thank the Minister for his response. The difficulty is that he wants a reactive system, whereby insurers wait for someone to get in touch with them, but I think we should have a more proactive approach. Insurers should step in as soon as a Minister makes it clear that a terror incident has occurred. However, on the basis that the Minister is seeking further advice before the Bill progresses any further, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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I beg to move amendment 27, in clause 19, page 19, line 27, at end insert—

“(4) After section 2 of the Reinsurance (Acts of Terrorism) Act 1993 (Reinsurance arrangements to which this Act applies) insert—

‘2A Duty to advise on terrorism insurance

(1) Where the conditions in subsection (2) are met, an insurance provider has a duty to advise on the available insurance related to losses sustained as a result of acts of terrorism.

(2) The conditions referred to in subsection (1) are—

(a) that a person asks the insurance provider for advice in relation to insurance (whether related to terrorism or not); and

(b) that it seems to the insurance provider that the person may benefit from insurance in relation to a loss which is covered by terrorism reinsurance arrangements under this Act.

(3) In this section, “insurance provider” means—

(a) a person regulated by the Financial Conduct Authority or the Prudential Regulation Authority who sells insurance, or underwrites the risk of such insurance, or

(b) the agent of such a person.’”

This amendment would require insurance providers to advise on the insurance available in relation to losses sustained as a result of acts of terrorism.

I thank insurers and brokers for all their help since last June, including the Association of British Insurers and the British Insurance Brokers’ Association. The amendment would require insurance providers to advise on the insurance available in relation to losses sustained as a result of acts of terrorism.

The Government have been commended for belatedly acting to better extend the Pool Reinsurance model to cover contemporary forms of terrorism. Having seen my constituency attacked without the adequate protection that could have been available, I am slightly more reticent to congratulate them. However, covering non-physical damage and allowing employers to be covered for all business interruption issues arising from a terror attack is a significant step forward for people and firms who might be affected by future attacks.

There were firms at London Bridge and Borough market that were affected by physical damage from the vehicle that was used initially in the attack on the bridge. The vehicle ended its journey on the edge of the bridge, damaging the Barrowboy and Banker and the London Bridge Experience. Some buildings incurred other damage during the attack, including bullet holes from the swift police response to end the brutal rampage. However, most of the damage was non-physical, as we discussed on Tuesday. The closure of premises; the lack of access to stock; the loss of stock; the inability to contact customers; lost bookings; lost contracts; and employees leaving, with the associated recruitment costs, are all forms of business interruption, as highlighted on Tuesday. Extending coverage for those matters as standard in future attacks is welcome.

The Government tell us the threat remains severe, so it is likely we will witness more atrocities, sadly. The Government are taking one step towards better cover, but they need to recognise the broader issue of coverage. Even when the Bill is enacted and implemented, coverage will have another limitation: terror insurance will still need to be held. “Market penetration” is the term the sector uses. The Minister spoke on Tuesday about insurers and brokers upping their game. In effect, the amendment would help to ensure that they do and that more firms take out protection through better awareness of the offer when advised by insurers and brokers.

The British Insurance Brokers’ Association estimates that less than 2.5% of 5 million UK businesses have terror insurance. That leaves vast swathes of employers and jobs at risk under the severe threat that the Government tell us exists of another attack. The amendment is designed to help tackle that issue and increase take-up.

There are options. The Government could compel Pool Reinsurance to advertise, but have never done so. Pool Re has been left alone, with the consequence that coverage has been inadequate in terms of what is protected and who has bought into the system. My personal preference would be to compel larger employers and firms with higher turnover to hold terror insurance. That could be done alongside compelling some form of direct marketing of terror insurance and Pool Reinsurance to businesses, especially in areas known to be at greater risk. I appreciate that that is not the Government’s approach, so my amendment is designed to find a means of promoting coverage that is not onerous, that facilitates choice for all firms, that reflects the level of risk in different areas and that has a means of delivery that is not burdensome on those involved.

The amendment would compel insurance providers and brokers of insurance to offer terror insurance and to advise on the merits of terror insurance and the risks of not having it. Individual businesses would still be able to make their choice based on circumstances, including location, but the offer must be made, and advice must be given on the pros and cons and risks involved.

I am aware that Pool Reinsurance has adapted its package and support, and now offers a £30 arrangement to cover up to £500,000 in damages. The costs of taking up support are not massive for most firms. The amendment facilitates better awareness of the package and helps build resilience in the pool through greater coverage and protection for more businesses. The amendment would obviously work most easily in terms of direct sales with firms and drawing up new contracts, but it goes further.

In discussions with insurers and brokers’ representatives, I am aware that a lot of insurance is bought online in standard packages. The amendment would not alter that. Firms offering those deals would simply need to consider adding terror insurance to those them, or to add an automated trigger system to ensure follow-up correspondence advising on terror insurance and its benefits. That’s it—it’s simple.

Under existing packages and arrangements, insurers and brokers could also go back to customers to flag up their new requirement to offer terror insurance—a responsibility that is on them and not on customers, who have only to consider their advice. I acknowledge that there are costs to put that in place, and those are costs for the insurers, who have overseen the very low record of take-up, which puts more firms, jobs and revenue for the Treasury at risk in the event of further terror atrocities. Ignoring the massive gap should not be an option. It is not in UK plc’s interest to perpetuate the current lack of take-up.

Borough market is an example of where, even when terror insurance was offered, it was so basic that some firms declined to take it up because it was limited to physical damage only. Traders felt they were unlikely to have their stalls blown up. However, they have lost considerably because of the attack last June—£2 million, as discussed on Tuesday. They needed to have better coverage in place and to have been made better aware of what coverage was possible. If terror insurance had—the Bill addresses this—covered business interruption, and they had been advised on it, more take-up would have occurred. It should not be an either/or scenario. The Government are making the business interruption changes, but they are not focusing enough on how to drive up the coverage, which is also essential.

This amendment comes from the practical experience of Borough market and a desire to ensure that other areas are not so badly affected in the event of future attacks. I hope that it will receive Government support as our consideration of the Bill progresses. I would welcome discussion of it now and an indication of the Minister’s position.

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I am very conscious of the wider impacts of terrorist attacks on surrounding communities and businesses. However, I am afraid that there are several issues with the proposed amendment and its objective. Most prominent among those is the increased regulatory burden that would arise from the amendment. That would be likely to lead to an increase in the cost of insurance for people across the UK, as the hon. Gentleman has said, as well as for businesses being sold terrorism insurance instead of other insurance products that might better suit their needs.

The amendment would also impinge on the existing regulatory protection provided by the Financial Conduct Authority. The FCA’s “Insurance: Conduct of Business” sourcebook sets out the regulatory framework for the conduct of insurers and brokers in the United Kingdom. It aims to ensure that customers are treated fairly and given clear and fair information when they are sold insurance. These rules already include an obligation on firms involved in selling or providing advice on insurance to make sure their customers have sufficient information to make an informed purchase. In practice, that would mean that if terrorism is excluded from a business interruption product that is being purchased by a business, the broker should tell them, so that different businesses can consider whether a different product might better suit their needs.

If a customer feels that they were not provided with advice that met that requirement, they can ask for a review by the Financial Ombudsman Service. That service is open to individuals as well as to small and medium-sized enterprises with less than 10 staff and an annual turnover of up to €2 million. Larger businesses can take their insurer to court.

The amendment would also reduce the flexibility of the existing regulatory framework and potentially stifle innovation. That is because further primary legislation would be required to adjust the statutory duty in the future if necessary, unlike with the rest of the FCA’s rules, which can be updated quickly in line with trends in the insurance sector.

By imposing a specific statutory duty outside the FCA’s regulatory framework, the amendment would also risk significant additional consumer detriment. It would require any firm involved in providing advice on insurance products or selling insurance products to consider whether terrorism insurance was relevant to every one of their customers. In practice, that would mean that such firms would have to consider whether individuals and businesses would benefit from terrorism insurance when they are looking to purchase other insurance products, such as home insurance, mobile phone insurance, travel insurance and motor insurance.

This prescriptive approach would likely result in cases of mis-selling and an increase in the cost of insurance. That would be driven by firms that are more concerned about avoiding penalties for breaching a new requirement cost than the interests of their customers, as well as by firms introducing new processes to ensure they are compliant with the amendment.

The amendment might also result in those firms over-prioritising the sale of terrorism insurance relative to other risks, which might be a greater threat to an individual business. There are over 5.7 million SMEs in the UK. It is not generally the Government’s role to prescribe to those businesses the risks against which they should be insured.

Officials at the Home Office, the Treasury and the Department for Business, Energy and Industrial Strategy are working on options to improve take-up of insurance by businesses and by SMEs in particular. This is part of an holistic approach, looking at insurance as one of the many steps that an SME can take to improve its resilience to financial shocks.

Given the steps that are already under way to improve take-up, the existing protections already available through the UK’s regulatory framework, and the potential for significant additional costs to consumers—

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On that specific point about increasing take-up, will the Minister explain how take-up is being encouraged and what level he expects it to be at within, say, three years of implementation of the Bill?

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The Association of British Insurers and the insurance broker trade industry do great amounts of marketing and promotion to get people to buy insurance and be protected and covered. The biggest threat to us all in the insurance space is inappropriately covered people, whether that is in terms of terrorism or anything else. That is a constant challenge to the industry, often because a number of its risks are mutually pooled, as we were talking about when considering a previous amendment on motor insurance. Therefore, it would be in the interests of the insurers to ensure that people have appropriate insurance for their risk; that is quite important.

The Government can play a role in highlighting awareness of the threat of terrorism. Everyone here will be very aware of the shift in terrorism over the last 18 months; it has been top of the news most weeks. Probably like everyone else, I will look at whether my travel insurance for my summer holiday covers terrorism—well, I am going to Wales, but if I was not, I would check that. The difference between me and the hon. Member for Bermondsey and Old Southwark is that he wants the Government to direct the insurance industry to tell people about that insurance. The position of the Government is that the FCA should use its regulations and advice to be more responsive, and we should not use primary legislation.

Members on the Government side of the House would also say that there is some onus on the customer to seek the most appropriate cover from their insurers to match the threat that they face. That is where we differ, and it is why I urge the hon. Gentleman to help us seek a way to improve take-up through the building up of marketing and promotional material on getting the right insurance, and indeed through regulations, rather than primary legislation. A project is under way to improve take-up, and I will write to him with further details if he would like me to. I urge him to withdraw his amendment.

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I think the Minister has slightly misinterpreted my suggestion. I did not suggest placing an obligation on customers to purchase insurance—merely that insurers advise on its availability. On Tuesday the Minister talked about insurance market failure in some areas, and this will be a missed opportunity to correct that failure. However, on the basis that the Minister will outline the awareness-raising activities that the Government will undertake, and in the hope that doing so will allow a discussion before the Bill goes to the Lords, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

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With this it will convenient to consider New Clause 4Review of the changing nature of terrorism reinsurance requirements

“(1) The Pool Reinsurance Company Limited must provide an annual report to the Secretary of State setting out—

(a) an assessment of the nature of terrorism reinsurance requirements; and

(b) any recommendations on how terrorism reinsurance arrangements should be amended to address terrorism reinsurance requirements.

(2) The Secretary of State must lay the report and any recommendations made under subsection (1) before the House of Commons within three months of receipt.

(3) The laying of the report and recommendations under subsection (2) must be accompanied by a statement by the Secretary of State responding to each recommendation made under subsection (1)(b).”.

This new clause would ensure that terrorism reinsurance arrangements are kept under annual review by Pool Re and would require the Secretary of State to respond to Pool Re’s recommendations in relation to terrorism reinsurance.

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I raised this issue on Second Reading. I generally welcome the clause. The original provision in section 2 of the Reinsurance (Acts of Terrorism) Act 1993 restricted the loss that could be claimed for loss of, or damage to, property and for consequential loss, which I am afraid therefore excluded business interruption in situations in which there was no direct damage to property. The clause solves that problem and will explicitly insert business interruption as a form of loss in that section of the 1993 Act. That is welcome, because it recognises that the terrible acts of terrorism that we see have an impact on the wider community and have a financial impact on businesses in terms of lost trade.

However, I want to set out the concern about businesses that have suffered losses in the past. I pay tribute to the work of my hon. Friend the Member for Bermondsey and Old Southwark, who has campaigned tirelessly for his constituents on this issue after the terrible atrocity that occurred at London Bridge and Borough market in his constituency. He eloquently put the case today and last week for dealing with these iniquities in the system.

I hear what the Minister says about looking into the past. Wherever a line is drawn, it will, of course, lead to further unfairness because of the events that would fall on the wrong side of it. However, will the Minister at least undertake to look at whether anything can be done with respect to some of the losses occurring through business interruption in Borough market and elsewhere, so that no stone is left unturned as to whether any form of help can be provided? I would be very grateful for that reassurance from him.

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I rise to speak to new clause 4. I have nicknamed this “the resilience clause”, and I hope it will be adopted to protect UK firms. I will speak as briefly as possible, but I will touch more generally on clause 19, for which I have been campaigning for the last year, and I am grateful to see it emerge now. Had it been in place before last year, it would have made a huge difference to those affected by the terror attacks at Borough market and London Bridge last June. I have been seeking this through Westminster Hall debates, so I am pleased to see it. I am disappointed that, as my hon. Friend the Member for Torfaen just said, the Government are yet to offer any form of compensation—a single penny—for the damage felt and caused at Borough market and London Bridge last year. I will keep campaigning for that.

New clause 4 would ensure that terrorism reinsurance arrangements are kept under annual review by Pool Reinsurance, and would require the Secretary of State to respond to Pool Reinsurance recommendations in relation to terrorism reinsurance. The clause is designed to prevent the Government-backed system from falling behind terrorist methods and their future impact. It would help to build resilience in our anti-terror structures overall. The clause would require Pool Reinsurance to provide an annual report on the nature of terrorism and any need to improve the systems designed to protect UK citizens and businesses from the form of terrorism we currently face, and to advise on how it is changing and what we might expect in future.

If that system had been in place from the introduction of Pool Reinsurance in the 1990s, it could have ensured that as the Provisional IRA threat of physical damage to economic infrastructure diminished and as terrorism morphed into the deliberate targeting of innocent civilians with knives and vehicles, the pool would have adapted accordingly over time, or at least have had the potential to do so. The Provisional IRA targeted buildings—physical economic infrastructure—not civilians. The pool was designed for that early 1990s threat, after the devastating Canary Wharf and Manchester Arndale attacks. Sadly, the system has not been updated properly over time as the nature of the threat has changed and, with it, the impact on businesses and employers’ insurance needs.

As discussed on Tuesday, Pool Reinsurance, despite warnings dating back to at least February 2016, has not been updated swiftly enough by the Government to cover the brutal attacks against innocent people, such as those enjoying Borough market on Saturday 3 June last year. That should have been possible, and the new clause will ensure that it will be going forward. The pool should never be left to slip behind again. The duty would ensure an annual appraisal of the nature of terror threats and their potential impact on businesses in particular, and would ensure that advice and recommendations are provided on how to adapt to better protect under-insurance systems from contemporary systems, and who or what terrorists target.

The duty would be on Pool Reinsurance, but the clause is not prescriptive regarding how it would work in practice. The pool could involve a range of stakeholders, including Government Departments, ABI, BIBA and business representatives. The wording is kept simple enough to prevent too onerous a system, or too rigid a structure, from developing. The duty is on Pool, because Pool is obviously in a strong position to provide overview from a tactically strategic position, and at no new cost. Pool already provides a quarterly terrorism frequency report, which could form the basis of any future annual reporting of risks and the UK’s ability both to prevent companies from losing out and to protect employers and employees from job losses as a result of insufficient coverage.

I believe that Pool would welcome the role. It has already sought to improve its insurance coverage in terms of packaged costs, awareness of cover and extending the support offered after different forms of attack, including both cyber and business interruption. However, Pool’s work has not always been swiftly acted on by Ministers, creating the gap that so badly affected London Bridge and Borough market in my constituency last year, and that the Bill is aimed at addressing.

Pool Reinsurance would report, and make recommendations, to the Secretary of State, who would be obliged to reply. That obligation is not massively onerous, especially given the huge range of responsibilities, and the clause suggests an ample three-month timeframe. I hope that the proposed new clause will have the backing of the Minister, and I would welcome an indication of whether the Government will pursue it in the Bill’s later stages.

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I understand what the hon. Gentleman is trying to do, which is, in order to ensure that we do not miss the impact—in terms of how victims of terrorism are dealt with—of the changing threat, to have a review of that to ensure that all the holes in cover are plugged in future. The only point on which I differ from him is in understanding what Pool Re is.

Pool Re is a private organisation owned by its members. They therefore have a vested interest, inevitably, in what they decide to cover and how to cover it. The role of Government is to be independent of that, and therefore they should be doing that job rather than Pool Re and its members. I will give the hon. Gentleman a commitment that I will ask my officials to examine, working with the Treasury, how we can—annually or biannually or whatever is the appropriate timeframe—do a review of incidents that have happened within those 12 months or whatever, to see where there have been and are gaps in insurance, so that we can be in a better position not to miss those vulnerabilities and to ensure that we engage with Pool Re in a more deliberate manner about the raising of the threat.

My point about Pool Re’s different structure and its interests does not seek to undermine what it is. It has within it some extraordinary people who know about risk and about security, but it is the role of Government, rather than them, to be doing that. If I can get back to the hon. Gentleman about what I think would be a good way to take that forward, so that we can have confidence in the future that these things are pointed out and followed up, I would be happy to do so.

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Is the Minister suggesting that Pool Re is seeking to extend its role beyond where it should? Is he suggesting that the Government and Ministers are in a better position to judge the impact—bearing in mind that the overall clause is about terror insurance—and to advise on what should be covered than Pool Re, which is already there doing the job and has sought to have cyber-attacks, and the kind of non-physical damage we have seen mentioned in this clause, brought into coverage? I would slightly disagree.

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We have to be careful. Pool Re is, first of all, not the only organisation in the marketplace. The Government have a duty to all the insurers, including Pool Re, to indicate where risk, certainly in the security space, is developing or currently stands. We must be minded that it is not a stand-alone organisation. It should be the Government who indicate risk in security. It is our JTAC, the joint terrorism analysis centre, that indicates, independently of Ministers, what the latest analysis shows about where a security threat is developing. We raise severe threat levels and so on.

It is not the Government’s job to tell people how to do the insurance, and we would not seek to tell Pool Re how to carry out or issue insurance policies, but it is the role of Government—because the Government are independent of that vested interest—to be the owners of understanding where the threat is going and being able to pull together all those experiences. It is from the hon. Gentleman’s experience as a constituency MP that he has learned about his businesses in Borough Market. The police will have their experiences, as will the ambulance service and so on.

If we are to really get to grips with understanding the vulnerabilities, it requires someone who is set aside from the insurance industry. I do not think it would involve the Government producing a report saying, “You must insure this, and this is how you do it.” I think it would be the Government saying, periodically, “Let’s have a look at what has happened, what has been missed out, what the public need to be aware of and what action they need to take.” That is where I would sit; that is the issue I have with the start point of the hon. Gentleman’s new clause. Again, his meaning is not misplaced and nobody in the Committee disagrees with his determination to improve his constituents’ opportunities to get insurance, but I see it as a question of how we will get there.

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My concern is that an expert body already exists specifically with this focus of terrorism reinsurance—a body that could do this job and in part does it already through the advice it offers. The new clause would formalise that role. Instead of taking that approach, the Minister seems to want to take on an even bigger Government, a bigger state and more civil servants. I thought we were meant to be the party of big Government, not the Conservatives, so I am confused.

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The hon. Gentleman’s question would basically mean asking an insurer “Whom should we insure?”. As to the role of Government, they have secret intelligence at their fingertips, and have numerous reviews. After the Manchester attack, dozens of reviews took place over the past year; we have all of that. Some of it is secret, and some is not. That can help us understand and be better informed. We have no interest in the outcome of that.

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Has Pool Reinsurance ever asked the Government to cover something that is not now covered—be it business interruption or cyber? Has that ever happened? That is what the Minister seems to be suggesting. Under the new clause the Minister would respond to recommendations. That is where the points that he makes would come in.

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We have lots of discussions with Pool Re and many other insurers, and it has asked about cyber, as the hon. Gentleman has suggested. I have met its representatives several times, being the Security Minister. It has asked to do cyber, and we then take that into the process and go to the Treasury.

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That was not my question.

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We are not going to agree: I view the role of the Government in this space as being able to review an incident, take input from communities, police, ambulance services and everyone else who has dealt with damage, add that to the secret intelligence they have on emerging threat, and come up with a position.

When we do such reviews they are significant. In the case of Manchester attack, the operational improvement review alone was 1,300 pages. Every detail was examined. That is where that type of advice to the market, including Pool Re, should come from. Clearly we are not going to agree on that. It is not that Pool Re is not a great organisation; but it is owned by its members and is a reinsurance company. Call it big state, if you like, but I think that the role of the Government of the day is to be able to direct it. That is the right place for it to sit, so I urge the hon. Gentleman to withdraw the new clause.

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Order. May I make it clear that we are on the clause stand part debate? Although we are discussing new clause 4 within the debate, it will not be formally moved or voted on until we reach new clauses at the end.

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I asked for reassurance from the Minister about leaving no stone unturned in the matter of past compensation. I do not think he responded to that when he was responding to the new clause, and I wonder if he would do so.

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We want Pool Re to be dynamic and we want it to stimulate other insurers to meet the growing threat. The issue relates to a point I have made on numerous occasions—the number of travel insurances that have slowly, over the years, dropped terrorist insurance. It is not just about increasing insurance cover; it is important to keep an eye out for areas that are losing it. One of the lessons of last year is that we must be very much in touch with the affected communities—and it is about not only the human beings, but other aspects—to understand what has not been covered, and what more we can do.

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I am grateful to the Minister for covering those issues. Last week he argued against compensation for past events—because a line would have to be drawn somewhere. He said there could be additional unfairness because if the past period was set at 12 months, as my hon. Friend the Member for Bermondsey and Old Southwark suggested, something that happened two years ago would not attract the benefit, but something that happened six months ago would. The Minister said that that would create a new unfairness. I seek assurances that he will leave no stone unturned to find out whether anything can be done in relation to some of those past events, including the one at Borough market.

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The hon. Gentleman makes an important point. I spoke to the hon. Member for Bermondsey and Old Southwark after the Committee sitting last week. After last year’s attacks, mayors and local authorities got together and produced requests of Government, which we met, with £23 million or £24 million in Manchester. We also met a request from Salisbury.

I said to the hon. Gentleman, “Let’s meet and speak with the local authority that covers Borough market and put together an ask.” I did not receive a reply from the Mayor of London on that, but we did receive replies from the Mayor of Manchester and the Salisbury council leader. I am happy to sit down and see what we can do. We gave an extra £1 million to the NHS to deal with some of it, but in comparison, for the Manchester package—the hon. Member for Manchester Central (Lucy Powell) was involved in that—we gave in response to a big long list of everything, from a marketing budget—to help that great city attract people back—to help with infrastructure and so on.

I am happy to meet the hon. Gentleman and his local authority and say, “Okay, come on—what is it you seek?” whether it be business rate relief or whatever. The Treasury will go mad at me for suggesting that. The point is, I have not received such a request, but I am happy to help stimulate it and will also work with the Mayor of London to do so.

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I will certainly take the Minister up on that offer. Those who have been affected and are trying to rebuild their businesses—some are still in combat with insurance companies—have put further effort, while their businesses have suffered, into a request. That was put to a BEIS Minister, who came to the Borough Market Trust and met those directly affected. It was also put to a Treasury Minister here in Westminster when traders came to talk about their experience and ask for help. Those requests for support have been made, but to date they have not been acknowledged.

The Prime Minister visited the site and came back for the commemorative service. She was obviously welcome to do so, but she was aware of what had happened, its direct impact, the lack of insurance cover and costs involved for some, including microbusinesses, who could have gone under without public support. It is a little unfair to suggest that a request has not been made, but I will look to draw up something more comprehensive with the leader of the council, Peter John, and the Mayor of London and come back to the Minister with that. I thank him for the offer.

Question put and agreed to.

Clause 19 accordingly ordered to stand part of the Bill.

Clause 20

Border security

Question proposed, That the clause stand part of the Bill.

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The clause simply introduces schedule 3, which confers powers exercisable at ports and borders in connection with the questioning and detention of persons for the purpose of determining whether they are or have been engaged in hostile activity. It fulfils a mechanistic function; the new powers will be best discussed when we debate schedule 3.

Question put and agreed to.

Clause 20 accordingly ordered to stand part of the Bill.

Schedule 3

Border security

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I beg to move amendment 44, in schedule 3, page 35, line 37, leave out “whether or not there are” and insert “where there are reasonable”.

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With this it will be convenient to discuss new clause 2—Threshold for port and border control powers

“(1) Schedule 7 to the Terrorism Act 2000 is amended as follows.

(2) In paragraph 5 before ‘A person who is questioned’ insert ‘Subject to paragraph 9A,’.

(3) After paragraph 6A(2) insert—

‘(2A) A person questioned under paragraph 2 or 3 may not be detained under paragraph 6 unless the examining officer has reasonable grounds to suspect that he is a person falling within section 40(1)(b).’

(4) In paragraph 8(1) before ‘An examining officer’ insert ‘Subject to paragraph 9A below,’.

(5) In paragraph 9(1) before ‘An examining officer’ insert ‘Subject to paragraph 9A below,’.

(6) After paragraph 9 insert—

Data stored on electronic devices

9A (1) For the purposes of this Schedule—

(a) the information or documents which a person can be required to give the examining officer under paragraph 5,

(b) the things which may be searched under paragraph 8, and

(c) the property which may be examined under paragraph 9 do not include data stored on personal electronic devices unless the person is detained under paragraph 6.

(2) “Personal electronic device” includes a mobile phone, a personal computer and any other portable electronic device on which personal information is stored.’”

This new clause would implement the recommendations of Parliament’s Joint Committee on Human Rights and would require an officer to have reasonable grounds for suspecting an individual is or has been concerned in the commission, preparation or instigation of acts of terrorism before she could detain an individual for up to 6 hours under Schedule 7.

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I tabled the amendment in the hope of further exposition and assurances from the Minister. The shadow Home Secretary and I set out on Second Reading that, in the light of the events of recent months—with nerve agents on the streets of Britain—it is right that the Government should look at our border security. Therefore, while I will not stray out of order and discuss our other amendments, in generality they are designed to introduce further safeguards into the various powers available.

Amendment 44 would deal specifically with the non-suspicion power, if I may put it that way, in schedule 3, part 1, paragraph 1(4) on page 35. In regard to the power to stop, question and detain at the border, it states:

“An examining officer may exercise the powers under this paragraph whether or not there are grounds for suspecting that a person is or has been engaged in hostile activity.”

I am pressing the Minister specifically on whether or not there are grounds for suspecting. Clearly, in our criminal law there would usually be a reasonable suspicion of an individual. This power clearly goes beyond that, to suspicion that is not linked to the individual who can be stopped.

In previous debates and exchanges with the Minister on this matter, he has given me two explanations. The first was with regard to the nature of the intelligence provided; an example would be a flight where perhaps there is a suspicion about someone or people travelling on that flight, but the intelligence does not necessarily narrow down who that is. Therefore, anyone coming off that flight may be stopped. Secondly, with regard to the nature of the intelligence, when there are reasonable grounds for suspicion, those grounds may come about because of intelligence that, in itself, cannot be declassified or go into the public realm.

I am well aware of the arguments for the non-suspicion power; however, I would be grateful if the Minister could set out some of the situations in which this power would be used. Secondly, will the Minister indicate how frequently he would expect them to be used? I know it is not an exact science—we cannot predict the future—but I hope the Minister would at least have some sense of how he might expect it to be used and how frequently. Thirdly, there is concern because this power is different from so many other aspects of our criminal law where there has to be reasonable suspicion. Why does he think it is so vital for our national security that this be in schedule 3?

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It is a pleasure to see you in the Chair again, Ms Ryan. I shall speak in support of new clause 2 and amendment 44.

The new clause would largely do similar things, with an addition in our case. It would implement the recommendations of the Joint Committee on Human Rights and would require an officer to have reasonable grounds for suspecting that an individual is or has been concerned in the commission, preparation or instigation of acts of terrorism before they could detain an individual for up to six hours under Schedule 7. In addition, it would institute safeguards with regard to electronic devices.

The issues concerning this schedule are topical, given that some of it has been drawn in response to the Skripal incident in Salisbury in March. Obviously, in recent days there has been another incident, which is under investigation. The Bill was introduced with the intention of

“giving the police new powers to investigate hostile state activity at the border.”

The press release that accompanied the Bill stated:

“Using the new power, the police or designated immigration or customs officer will be able to stop, question, search and detail an individual at a port, airport or border area to determine whether he or she is, or has been engaged in hostile activity.”

On the face of it, there is little to disagree with in terms of the sentiment. Obviously, it is right and proper that we are able to take action on those who look to enter our country to do our country or its citizens harm. The authorities that do that do an incredibly important job and we should be grateful to them and ensure they have the necessary powers, but as drafted, these powers are concerning due to the lack of a reasonable grounds test for suspecting that an individual may be entering the UK to cause harm. They are therefore open to abuse and there is not enough assurance for officers working at our borders.

In addition, the Bill fails to protect any individual who has been designated a suspect. The arguments against these search and detail powers have been rehearsed over the years, but we should not dismiss the concerns that have been raised about racial profiling and how these powers allow for an element of discrimination in our society.

New clause 2 would implement the sensible recommendation of the Joint Committee on Human Rights and would require an officer to have reasonable grounds for suspecting an individual. It would provide greater clarity on when someone should be detained and would eliminate the chances of an individual’s personal belongings being searched and retained. It would therefore protect any individuals suspected of carrying out such an offence and also offers protection to the relevant officer on the border by providing greater clarity as to when they should detain a potential suspect. I urge the Minister to give new clause 2 and amendment 44 due consideration.

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The Minister and I discussed some of these powers privately, and I welcome the chance to discuss them again. He is aware of a number of cases that I am concerned about regarding detention or stopping and searching at borders. I make it absolutely clear that, when needed to protect public safety—whether from hostile state activity or from those travelling abroad or entering this country to commit acts of terrorism—the powers must absolutely be there to enable searching, detention and other necessary processes to deal with that and to keep the public safe.

However, there are two crucial points. The first is that, wherever possible, action should be taken before we have to detain or search or interdict somebody at a border, particularly if that person is leaving the UK. We should, if possible, detain them at their home or interview them elsewhere—voluntarily or otherwise—because if we get to the stage at which somebody attempts to board a plane or a ship or a Eurostar or whatever, there will be a risk both to public safety and of unnecessarily detaining or disrupting the travel of individuals who are not guilty of any offence.

The second point, which the Minister is aware of, is that we need to be aware that individuals may travel with family members or other individuals who are in no way connected and should not be under the reasonable suspicion that may be directed at that individual. What steps are being taken to ensure that information and processes are being shared to ensure that such detentions, searches and interdictions take place at the earliest possible opportunity? What arrangements are there to ensure that relevant information is shared, wherever possible, between airlines or other forms of transport, the Border Force, the Passport Office, the security services, the police and others to ensure that those things I mentioned are done at the earliest stage? I will move amendments on that issue later.

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I shall be brief. I would like the Minister to take a couple of my questions into account when answering those raised by other Members. It is clear that this whole area gives a lot of power to officers, and that the term “hostile activity” risks casting an extremely wide net; in essence, anyone could be subject to the Bill’s invasive powers. Will the Minister explain how any confidential material obtained at the border will be protected? How do the Government intend to ensure that these powers will not lead to ethnic and religious profiling? In view of these broad powers, will the Minister also clarify whether any training will be given to officers?

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First, the use of, effectively, no-suspicion stops on our border is not new. In fact, as we heard from those giving evidence to the Committee last week, lots of stops happen on our border, because borders are particularly vulnerable spaces. There are screening stops, in which people are asked questions about where they are coming from or going. There are also customs and excise stops, which go beyond that, and in which people are stopped and their bags and luggage are properly searched, perhaps in a side room. That is detaining, in a sense. It is not for a long period of time; it is certainly not as long as some of the scheduled stops that we will talk about.

Until someone is arrested, their access to legal advice and so on is different, because our vulnerability at a border, and our need to establish who, what and when, is really important for our national security. That is why many of those stops, in different guises—whether customs or identity screening—have been in place, sometimes, for hundreds of years. This is a development of that. In the Terrorism Act 2000, passed by the last Labour Government, the feeling was that, given our vulnerability at the border in a fast-moving world of millions of passengers, it was important to give our Border Force and our law enforcement community the ability to establish that information.

Some 89% of all stops at the border are done in under an hour. The vast majority are inward not outward, but to the point made by the hon. Member for Cardiff South and Penarth, I also have a constituent who was stopped when outward bound. My constituent was held up, and a family holiday and lots of money were effectively lost. Having met the hon. Gentleman, we have started a piece of work to look at exactly what we can do to minimise that. A good example would be asking whether it is really necessary to stop someone on the way out; they could perhaps be stopped only on the way back in. If we do not think they are going to travel to fight in Syria, but we think they might be going to do something else, we could just wait until they come back, and people are much less likely to suffer financial risk if they are done.

In answer to the question by the hon. Member for Manchester, Gorton, only officers who are specially trained are allowed to conduct a stop, search and detail. I think it would be illegal, and it would certainly be against the powers, to do it for arbitrary or discriminatory reasons. That would cover doing it on the basis of race or anything else. The no-suspicion power has been incredibly useful and has caught a significant number of terrorists, predominantly due to the fact that they have been stopped and data or biometrics has been seized. We have seen a number of cases. There was a guy from Wembley, I think, who was convicted of murder based on material recovered from a stop.

There will be safeguards in this new power. Our terrorism stops are reviewed by the Independent Reviewer of Terrorism Legislation. I have asked the Judicial Commissioner, Lord Justice Fulford, to review the use of the hostile state power on an annual basis. One of the reasons why we have introduced this is that the Independent Reviewer of Terrorism Legislation had serious concerns that in the past we were using a counter-terrorism power to stop people on a national security or hostile state concern. This is our response to what I think was David Anderson’s recommendation to take that forward.

The hon. Member for Torfaen and the Scottish National party have spoken about no-suspicion and the fact that we should have reasonable grounds. The biggest challenge is that the way our intelligence is presented to us can often be very broad. It can be based on a method, on a threat on a date, or on a plane, rather than on a person. The Government’s reading of the law is that if we had to have reasonable grounds, it would be too narrow for us to be able to respond to some of that intelligence threat.

It may even be that we have gone to a state of “critical”, where an attack is imminent but we do not know from which direction. I have personal experience, doing this job, of where we had some “reliable” intelligence about an attack in one part of the country, but in fact an attack happened in an entirely different place at another end of the country. The information was enough to consider raising the threat level, but not enough to know exactly where it was happening. I remember having rather an uncomfortable night, going out and having in the back of my head what I had been told might happen; while I was pleased that it did not happen, something else then happened elsewhere. It is a challenge; it is a difficulty. It is the way our intelligence is often presented to us, and that is why we need a no-suspicion stop.

There are protections for journalistic material and legal privilege. Because the seizing at this stop would not be under suspicion, the examining officer would have to apply to the Judicial Commissioner for that to be further examined, and the Judicial Commissioner could say no. We have included protections for journalists, lawyers and so on, to ensure that that happens, because we do not want the power abused, especially when we are talking about a hostile state rather than terrorism. Of course, hostile states are pretty clever at how they try to penetrate or come into the country.

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Obviously I do not expect the Minister to share any information here if it would be inappropriate to do so, but he mentioned the clever way in which hostile states may attempt to penetrate this country and undertake acts, whether that is the Skripal poisoning or other activities. Could he reassure us about measures in place at, for example, general aviation airports, smaller seaports and so on? Obviously, a lot of our focus is understandably on major locations such as Heathrow or Eurostar terminals and so on, but hostile states are well known for using alternative routes or, indeed, diplomatic channels to bring in individuals who conduct serious offences.

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The hon. Gentleman makes an interesting point. Again, it goes to the reason we have the no-suspicion stop. They are most likely to be trained, capable agents of a country, not amateurs, or they may be disguised using amateurs. Look at the history of the cold war. That is why we sometimes have to respond to more general intelligence specifics. Let us say we had intelligence that a hostile state was seeking to use a minor port, a west coast port or a private air strip. That is all we would have, but if the threat was significant enough we would then have to—and we do—deploy individual police and Border Force officers from each region to cover that. However, that is quite wide. It is not, “Ben Wallace is coming in on flight X, Y or Z”; perhaps it is our responding to a flight plan. It is sometimes that simple.

I have come from a Cobra meeting this morning where we have seen the consequences of some really hostile state activity, which has put two innocent British citizens, who are very seriously ill, in hospital. We are being taken advantage of as an open country. I am afraid that there is far too much intelligence officer activity, not always under diplomatic cover in this country, from some of our adversaries, and we have to make our border a bit harder for them. Diplomats will not be covered by that—we will still be obliged under the diplomatic conventions—but their families may be. It goes back to the question on suspicion. I might have a suspicion that X is doing it, and they are a diplomat, but they may say, “Well, I’m not carrying that in; I’m not risking myself, but I’ll get someone else in the wider party who doesn’t have diplomatic cover to do it.”

I am afraid that is why it is really important for us. It is why the last Labour Government thought it was important on the terrorism issue. The Law Society of England and Wales witness said in his evidence that he had no concern about the suspicion part of the powers. He had some concerns about legal privilege, and I listened with interest to that part of his submission. That is why I think it would set us back in our national security and counter-terrorism work if we lost the power to do that. I am afraid the Government will therefore resist the amendment, and I ask colleagues on both sides of the Committee to reflect on that, and hopefully the hon. Gentleman will withdraw the amendment.

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I am grateful to the Minister for that explanation and exposition, and for the promise of the annual review under Lord Justice Fulford, which I think will be extremely useful. On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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I beg to move amendment 37, in schedule 3, page 36, line 7, at end insert—

“(6A) The Investigatory Powers Commissioner (‘the Commissioner’) must be informed when a person is stopped under the provisions of this paragraph.

(6B) The Commissioner must make an annual report on the use of powers under this paragraph.”

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With this it will be convenient to discuss amendment 36, in schedule 3, page 40, line 31, at end insert—

“(2A) The person who owns or was carrying or transporting an article which is retained under paragraph 11(2)(d) or (e) must be notified by the examining officer when the Commissioner is informed that the article has been retained.”

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I will be quite brief, because these amendments simply insert some further safeguards. They do not detract from the central aims of what the Government are seeking to do, but provide additional protections.

Amendment 37 relates to the power to stop, question and detain, which obviously we have been discussing in relation to my previous amendment. The amendment would simply allow the Investigatory Powers Commissioner to be informed when a person is stopped, and to make an annual report on the use of the power, which seems a perfectly reasonable request in the circumstances.

I will deal with amendment 35 in due course. Amendment 36 is simply about the commissioner being informed about the retention of property. The person who owned the article, or who was carrying or transporting it, will be notified by the examining officer when the commissioner is informed that it has been retained. These two amendments are not major interferences with the power, or with the aims of the Bill, but I suggest to the Minister that they are sensible safeguards.

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As the hon. Gentleman has explained, the two amendments seek to enhance the oversight of the powers in schedule 3 by the Investigatory Powers Commissioner. I entirely agree that we need effective oversight, but I hope to persuade him that the Bill already provides for that.

Amendment 37 would require that when a person is stopped and examined under schedule 3, the commissioner must be informed. It would also require the commissioner to make an annual report on the use of those powers. As to the duty to prepare an annual report, I refer the hon. Gentleman to part 6 of schedule 3, which already sets out the duty on the commissioner to keep under review the operation of the provisions in the schedule and to make an annual report to the Secretary of State about the outcome of that review.

The mechanism outlined in part 6 mirrors the well-established reporting apparatus of the independent reviewer of terrorism legislation in relation to counter-terrorism powers. In his annual report, the independent reviewer reviews the operation of the equivalent port and border power in schedule 7 to the Terrorism Act 2000, and in doing so highlights any issues that have arisen through the exercise of those powers, provides a statistical breakdown of how they are used and makes recommendations for their future operation.

Amendment 36 would require that the examining officer informs the owner of an article that has been retained under paragraph 11(2)(d) or (e) of schedule 3 once the Investigatory Powers Commissioner has been notified of its retention. An examining officer may retain an article under paragraph 11 (2)(d) when

“the officer believes that it could be used in connection with the carrying out of a hostile act”,

or under paragraph 11(2)(e)

“for the purpose of preventing death or significant injury.”

Although I appreciate the amendment’s intent, it would place an unnecessary burden on the examining officer.

My officials are working with the Investigatory Powers Commissioner’s Office to determine the precise mechanism for keeping the individual informed of the fate of their property, including the appeal process and notice of any decision made. That will be set out in greater detail in the schedule 3 code of practice that we aim to publish in draft this autumn. Let me reassure the Committee that no individual will be left guessing as to what has happened. I agree wholeheartedly that the process should be governed appropriately and transparently. Given that the issues are already addressed in the Bill, or will be in the code of practice, I invite the hon. Gentleman to withdraw his amendment.

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I am grateful for those reassurances. I ask the Minister to comment on a further issue that relates to what I said previously. When the commissioner is carrying out the review process and producing the report that the Minister has referred to, will they be aware of every stop that has taken place?

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Yes. As for the counter-terrorism stops that exist, the total numbers will be in the annual transparency report. Although the commissioner will not be informed every time someone is stopped, the numbers will all be recorded, and he will have the power, in the same way as the reviewer of terrorism legislation does, to investigate those stops while doing the review. It will not just be, “Are these the numbers? Have they complied?”

The reviewer of terrorism legislation can investigate intelligence agencies issues, police issues and the things that lay behind the stops, and that is what we expect them to do. That is why I want a judicial commissioner to do that for hostile states, so if we see it being abused or not being right, he will spot it—not us. He will spot where police officers are not being properly trained or are not doing it correctly, or if it is being overused with no results. I assure the hon. Gentleman that in that scenario the independent commissioners will not take it at face value.

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I am grateful for those reassurances. In those circumstances, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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I beg to move amendment 35, in schedule 3, page 40, line 27, at end insert—

“11A(1) This paragraph applies where—

(a) an examining officer intends to retain an article under paragraph (2); and

(b) the person who owns or was carrying or transporting the article alleges that the article contains confidential material.

(2) Where sub-paragraph (1) applies, the examining officer—

(a) may not examine the article; and

(b) must immediately provide the article to the Investigatory Powers Commissioner (the ‘Commissioner’).

(3) On receiving an article under sub-paragraph (2), the Commissioner must determine whether or not the article contains confidential material.

(4) Where the Commissioner determines the article contains confidential material, the Commissioner may authorise the examination and retention of material in accordance with the provisions of paragraph 12(5).

(5) Where the Commissioner determines the article does not contain confidential material, the Commissioner must return the article to the examining officer to determine whether the material should be retained under paragraph 11(2).”

The amendment relates purely to the protection of confidential material. I have based it squarely on what was said by the Master of the Rolls, one of our most senior judges, in the Miranda judgment, with which I am sure the Minister is familiar. The Court of Appeal judgment is dated 19 January 2016. The Master of the Rolls, who gave the leading judgment—this is from paragraph 119 of the judgment—said:

“But in disagreement with the Divisional Court, I would declare that the stop power conferred by para 2(1) of Schedule 7”—

to the Terrorism Act 2000—

“is incompatible with article 10 of the Convention”—

the European convention—

“in relation to journalistic material in that it is not subject to adequate safeguards against its arbitrary exercise and I would, therefore, allow the appeal in relation to that issue. It will be for Parliament to provide such protection. The most obvious safeguard would be some form of judicial or other independent and impartial scrutiny conducted in such a way as to protect the confidentiality in the material.”

It is important to protect the confidential material, as the Minister is aware. I have simply taken what one of our country’s most senior judges has said and tried to construct a protection that is in line with what he has asked Parliament to do. It would work through the oversight of the Investigatory Powers Commissioner.

The commissioner could determine whether an article contains confidential material and could then give powers in those circumstances where it can still be examined and retained, but there has to be that protection and that distinction given by the commissioner. Where there is a determination that the article does not contain confidential material, it could be returned to the examining officer. That is a sensible suggestion to deal with the lack of a safeguard that has been highlighted by one of our most senior judges.

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I am grateful to the hon. Gentleman for explaining his amendment. I want to start by reaffirming the Government’s strong conviction that confidential material should always be handled with the utmost care and consideration. We have sought to provide for that in schedule 3. The Bill provides that the Investigatory Powers Commissioner must be the one who authorises the retention and use of an article that consists of or includes confidential material, subject to meeting the requirements of paragraph 12(5). Beyond the point at which the examining officer comes to hold a reasonable belief that an article contains confidential material, the officer will not be able to examine that article until further authorisation has been granted by the commissioner.

However, it would be improper to impose a restriction on the examining officer such that they were unable to establish their own belief that the article does in fact consist of confidential material. The police have a statutory obligation to protect our citizens and prevent crime. They cannot be expected always to take at face value the word of someone they are examining, who in some cases will be motivated to lie. If an individual being examined claims that an article consists of confidential material, the examining officer should be within their rights to verify that if they feel that is appropriate. Having verified that the article does indeed consist of confidential material, the examining officer should stop the examination and, if they wish to retain the article, seek the commissioner’s authorisation to examine it.

The point about face value is important. Bona fide people will usually be able to identify themselves as bona fide lawyers or journalists pretty quickly. If someone turned up with no law degree or legal background and said, “I’m a lawyer, so you cannot look at my devices,” it would be fair for the officer not to be able to examine the whole documentation or device, but to seek to establish the fact before they then take the next step and go to the judicial commissioner with a request to examine the material. Until the request is granted, the judicial commissioner can say, “No, you can’t. You have to destroy it.” They can direct them.

The difference between me and the hon. Gentleman is the extent to which we want face value to be established before it goes to the judicial commissioner. I stress that under this schedule the examining officer can seek to retain that material only if they believe that the article could be used

“in connection with the carrying out of a hostile act”,

or if they believe that retaining the article could prevent “death or significant injury”. Although it is not in the Bill, I assure the hon. Gentleman that it will be in the code of practice that is provided for in part 4 of schedule 3. If the commissioner concludes that the article could not be used in connection with the carrying out of a hostile act, or could not cause death or significant injury, they will direct the article to be returned to the person from whom it was taken.

I assure the hon. Gentleman that we are working with the police and the Investigatory Powers Commissioner on how those provisions will be implemented in practice. The mechanics will be set out in the schedule 3 code of practice that we aim to publish in draft in the autumn. I hope that I have persuaded him that that is the right approach and he will accordingly be content to withdraw his amendment.

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I am grateful that the Minister has set out the position regarding the proposed code of practice. If he would undertake to keep me updated on how discussions go leading up to that publication in the autumn, I would be very grateful and willing to withdraw the amendment.

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To reassure the hon. Gentleman, it will be a statutory code, so it will go through the full process.

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In that case, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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I beg to move amendment 21, in schedule 3, page 46, line 17, leave out “and 26”.

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With this it will be convenient to discuss the following:

Amendment 22, in schedule 3, page 46, line 26, leave out sub-paragraph (3).

Amendment 38, in schedule 3, page 46, line 27, leave out from “would” to the end of line 28 and insert

“create an immediate risk of physical injury to any person or persons.”

Amendment 40, in schedule 3, page 46, line 28, at end insert—

“(3A) Where the examining officer believes that there is an immediate risk of physical injury to any person or persons under subparagraph (3), they must allow the detainee to consult a solicitor by telephone.”

Amendment 23, in schedule 3, page 46, line 33, leave out sub-paragraph (6) and insert—

“(6) Sub-paragraph (5) does not apply if the examining officer reasonably believes that the time it would take to consult a solicitor in person would create an immediate risk of physical injury to any person.”

Amendment 39, in schedule 3, page 46, line 34, leave out from “would” to the end of line 35 and insert

“create an immediate risk of physical injury to any person or persons.”

Amendment 41, in schedule 3, page 46, line 35, at end insert—

“(6A) Where the examining officer believes that there is an immediate risk of physical injury to any person or persons under subparagraph (6), they must allow the detainee to consult a solicitor by telephone.”

New clause 3—Access to a solicitor

“(1) Schedule 8 of the Terrorism Act 2000 is amended as follows.

(2) In paragraph 7 leave out ‘Subject to paragraphs 8 and 9’.

(3) In paragraph 7A—

(a) leave out sub-paragraph (3),

(b) leave out sub-paragraph (6) and insert—

‘(6) Sub-paragraph (5) does not apply if the examining officer reasonably believes that the time it would take to consult a solicitor in person would create an immediate risk of physical injury to any person.’

(c) in sub-paragraph (7) at end insert ‘provided that the person is at all times able to consult with a solicitor in private.’

(d) leave out subparagraph (8).

(4) Leave out paragraph 9.”

This amendment would delete provisions in the Terrorism Act 2000 which restrict access to a lawyer for those detained under Schedule 7.

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The amendments would delete the provisions that restrict access to a lawyer for those detained under schedule 3 for the purpose of assessing whether they have engaged in hostile activity. However, in doing so, the amendments would add an important safeguard that would ensure that that would not apply if the examining officer reasonably believed that the time it would take to consult a solicitor in person would create an immediate risk of physical injury to any person.

In addition, new clause 3 would amend schedule 8 of the Terrorism Act 2000 with regards to access to a lawyer. It acts on the concerns that have been expressed to us by many different organisations and respected individuals. As we have heard, this section of the Bill would allow an individual to be detained for a significant period of time without reasonable grounds.

Notwithstanding the Minister’s points about the varied forms of intelligence that are received, the amendments are not about constraining the powers of the men and women who work at our borders, but acting on the concerns that have been expressed to ensure that correct and proper due process is followed. During the evidence session, we heard from Richard Atkinson that the schedule was of “great concern” to him as

“It fundamentally undermines what I would consider to be a cornerstone of our justice system—legal professional privilege.”––[Official Report, Counter-Terrorism and Border Security Public Bill Committee, 26 June 2018; c. 26, Q55.]

We will come on to that in more detail in the next set of amendments.

In addition, during the oral evidence, Abigail Bright of the Criminal Bar Association also had concerns about

“having no access to a lawyer, on the face of it for no good reason”

and

“why the rights of a suspect, who is potentially an accused person, should be diminished”.––[Official Report, Counter-Terrorism and Border Security Public Bill Committee, 26 June 2018; c. 58, Q128.]

I suspect that the schedule has been drafted as a result of concerns that lawyers and legal advisers could be exploited and manipulated in some way, as has been outlined. However, as was pointed out, that is not unknown to our criminal justice system and we already have powers in place to deal with such occasions. For example, in code H of the Police and Criminal Evidence Act 1984, which deals with counter-terrorism cases, if there is a concern about an individual lawyer, there is provision for the suspect to have the consultation with that lawyer delayed but to be offered the services of another lawyer in the meantime, so the suspect is not devoid of legal advice.

Access to legal advice is a cornerstone of the British justice system—as a Scottish National politician, I should say the English and Welsh justice system and the Scottish justice system, before I get chided—and one that we should protect at all costs. I accept the Government propose the changes with the best of intentions to keep us safe but, as we have pointed out, there are ways that that can be done without eliminating or infringing on the basic principle of the rule of law.

The amendments provide a degree of flexibility to the authorities while ensuring that individuals can still access and make use of proper legal representation. Specifically, amendment 23 would, as I have outlined, provide that an individual can be prevented from consulting a lawyer in person only where the officer reasonably believes that the time it would take to secure a solicitor’s presence would create an immediate risk of physical injury to an individual or group of people. Those are important safeguards when there is valid suspicion about waiting for a lawyer to meet a client. Public harm can be caused by the wait, but at the same time there is an issue in the majority of circumstances of protecting someone’s basic right of access to a lawyer.

New clause 3 would amend schedule 8 to the Terrorism Act 2000. It would delete provisions restricting the access to a lawyer of people detained under schedule 7 to the same Act. I respect the concerns that the Minister has outlined, but I think that they were alleviated in the oral evidence given by Max Hill a couple of weeks ago. By tabling the amendments and new clause I am trying simply to maintain access to justice.

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I support the amendments tabled by the hon. Member for Paisley and Renfrewshire North; I also want to speak to amendments 38 to 41, which I tabled. They follow the same general tenor as the hon. Gentleman’s amendments, in that they are practical suggestions for maintaining the right to access to a lawyer. Amendment 41 is about consultation via telephone.

I will not discuss the amendments in the next group now. They have far more to do with the right to consult a solicitor in private. None the less, that issue is also at the heart of the amendments in the group we are now considering. The hon. Member for Paisley and Renfrewshire North has already referred to the evidence given by Max Hill, and I commend the evidence of Richard Atkinson, too. He chairs the criminal law committee of the Law Society, and I am sure that the Minister recalls a conversation with him on this very issue.

The Minister put the practical point to Mr Atkinson about whether access to a lawyer would be requested on every stop at the border. However, that is not what is at the heart of the amendments. The Minister asked Mr Atkinson whether he thought

“that when a Border Force person, a customs person, seeks to detain you for an hour or however long to examine and question you further, they, too, should have access to a lawyer”––[Official Report, Counter-Terrorism and Border Security Public Bill Committee, 26 June 2018; c. 29, Q66.]

That was about when the stage of being questioned was reached. The Minister mentioned a series of stages—whether it was a screening stop or another type of stop; but what I am talking about applies when questioning starts, when legal advice would be a necessity. We are not talking about the thousands of stops that are made. We are talking about particular circumstances that would be analogous to the position in the Police and Criminal Evidence Act 1984.

I also commend Mr Atkinson’s evidence in terms of seeking practical solutions to deal with the Government’s concerns and still maintain our cherished right of legal professional privilege. As I have said, Ms Ryan, I will not talk about that in principle now, as I will do so on the next group of amendments. However, Mr Atkinson suggested several ways in which the balance could be maintained. He said the consultation could be delayed; if there were concerns about a particular lawyer, the services of a different one could be offered; and advice could still be given within the sight of examining officers without necessarily being given within their hearing.

I recognise the issue of immediate physical threat, as well. However, I urge the Minister to look at the matter practically, and not to sacrifice legal professional privilege but to take note of the practical solutions by which we could deal with concerns about individuals abusing the right to consult a lawyer by, for example, consulting someone who is not a lawyer or passing on information. I accept that there is a risk and I accept what the Government say, but we should turn our minds to finding a practical solution that maintains legal professional privilege.

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I commend the spirit of the amendments tabled by the hon. Members for Paisley and Renfrewshire North and for Torfaen. It is important that as we strengthen our powers to tackle hostile state activity, we ensure that appropriate safeguards are in place to govern the exercise of those powers. The amendments seek to ensure that if an individual has been detained under schedule 3 to the Bill, and schedules 7 and 8 to the Terrorism Act 2000, the examining officer must postpone questioning until the examinee has consulted a solicitor in private. The amendments, and those in the next group, would remove almost all restrictions on that right, which allow police officers to impose conditions on its exercise. The Government’s case against the amendments applies equally to those in the next group, so I ask for your indulgence, Ms Ryan, if I touch on the issues raised by amendments 24, 25 and 42. It may be that when we come to the next group, we will find that we have already covered much of the ground.

The powers under schedule 3 to this Bill and schedule 8 to the 2000 Act would afford any person who is formally detained the right to consult a solicitor privately, if they request to do so, subject to exceptional powers of delay, which I will explain further. I agree with Opposition Members that where an individual has been detained under those schedules and has requested to consult a solicitor, they should have the right to do so privately. In the vast majority of cases, there will be no reason to question that right. On rare occasions, there might be a need for the examining officer or a more senior police officer to impose certain restrictions.

I want to be clear that the restrictions in schedule 3 are not new or novel. Indeed, they are modelled on existing restrictions and conditions that are available now to police officers in schedule 8 to the 2000 Act and in the PACE codes governing the detention rights of those arrested under non-terrorist arrest powers. They are designed to be available only in specific and serious circumstances, namely where those detained seek to frustrate an examination, cause evidence to be interfered with or alert others who are in some way involved in an indictable offence.

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If there were, just as there would be in a police station, a list of duty solicitors—or a list of approved lawyers where, if there were concerns, those lawyers could be removed from the list—why would there be a concern about an individual speaking to one of those lawyers in private, if that control were in place?

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In the PACE codes, we already have that small ability to reflect that concern, if there is a concern. It can be done already in such a situation.

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There can certainly be restrictions. There could be a restriction that an individual can consult a lawyer within sight of an examining officer—no issue with that. The issue is where the Bill goes further and provides that it must also be within the officer’s hearing. The justification given for that, as I understand it, is a worry that the individual will abuse that right and pass on information to someone, saying they have been picked up or whatever it might be. Why would that be a problem if there was an approved list of lawyers, which we were monitoring all the time, where we know that they are bona fide lawyers and there is not a concern?

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I will address that issue later in my speech. I can inform the hon. Member for Torfaen that at the moment, if an individual is detained on a customs stop for an hour, they only have a right to a lawyer in that environment once they have been arrested, not while they are being detained. That is currently the practice.

In the vast majority of cases there will be no reason to question the right, but on rare occasions, there may be a need for the examining officer or a more senior police officer to impose certain restrictions. As I have already stated, these conditions are available now to police officers in schedule 8 to the 2000 Act and in the PACE codes. It is mainly about a situation where those detained seek to frustrate an examination or in some way alert others who might be themselves subject to an indictable offence. That might be where prior intelligence indicates that the individual might seek to obstruct an examination, either because they have a history of doing so or they have been trained to bypass, frustrate or subvert police examinations. The officer might also witness interactions between the individual and their solicitor, which alerts the officer to the possibility that they are conspiring to obstruct an examination or interfere with evidence.

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Clearly, the professional code of conduct that lawyers have would prevent them in engaging in any illegal activity, so that would be covered in any event. If there were, say, four or five approved lawyers who were completely regulated and we knew who they were, why would there be a risk of them passing information on to other people?

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Let me proceed. When it comes to a person’s right to have access to a lawyer, no one currently prescribes in law that they may have only certain lawyers, except in Special Immigration Appeals Commission hearings. I would be interested in what the Law Society in Wales would say if we tried to set out that they could see only vetted lawyers.

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Police stations have duty solicitor rotas, and that has been in existence for decades.

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I understand that, but that does not restrict arrested people in a police station to choosing only from those lawyers. They can say, “I don’t want any of those five. I want the one I want.” I understand the hon. Gentleman’s point about a lawyer being trustworthy or effectively selected not specifically by the person detained but from an approved list. However, it would be difficult to go down the path of trying to approve people.

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But that is already the case in Police and Criminal Evidence Act 1984 code H. Richard Atkinson said that

“where there is concern about an individual lawyer”—

let us take the example of a person who asks to ring someone we are not entirely sure about—

“there is provision for the suspect to have the consultation with that lawyer delayed but to be offered the services of another lawyer in the meantime.”––[Official Report, Counter-Terrorism and Border Security Public Bill Committee, 26 June 2018; c. 27, Q55.]

Why do we not take the equivalent of that to the border? We could offer the services of those on our duty list—problem solved.

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I understand the hon. Gentleman’s point. All such schemes, including his, restrict people’s right to a lawyer, one way or another. They either say, “I don’t trust your lawyer, so you can have my lawyer,” or—this is how the Government are doing it—“We have exceptional grounds, authorised by a chief officer, because we are suspicious of something”.

The hon. Gentleman makes a point about police stations, but many of these examinations are about establishing who, what, where and when. We should remember that in the port stops power, to balance the removal of some rights, these verbal discussions are not admissible in court as evidence, unlike in a police station, where everything said can be taken down in evidence and used. We give that protection, as my hon. Friend the Member for Cheltenham (Alex Chalk) pointed out.

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I accept what the Minister says about trying to balance rights by not allowing such conversations to be used as evidence, but would it not be better and in the wider interest to allow the use of solicitors from a pool and be able to use those conversations as evidence?

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If I were to propose such a restriction on which lawyers could be consulted, I would find difficulty in the House of Lords. Let me proceed.

Accepting the amendments would in effect offer an opportunity to those engaged in activity of such severity to frustrate and obstruct an examination. Let me address the key point raised—the evidence we heard last week on restriction of the right to consult a solicitor in private. We must be clear that schedule 3 would allow use of the power only when an officer at least of the rank of commander or assistant chief constable has reasonable grounds for believing that allowing the examinee to exercise his or her right to consult a solicitor privately will have certain serious consequences.

The provisions are largely modelled on similar provisions in PACE: namely, where there are reasonable grounds to believe that private consultation will result in interference, injury to another person or hindering the recovery of property. Due to the potential severity of an act of terrorism, schedule 8 to the 2000 Act outlines additional consequences that might justify allowing the legal consultation to take place only within the sight and hearing of a qualified officer. Those include interference with information-gathering relating to an act of terrorism, alerting a person and making it more difficult to prevent an act of terrorism.

Schedule 3 to the Bill contains a similar consequence as a ground for allowing non-private legal consultations, namely the consequence of interference with information gathering about

“a person’s engagement in hostile activity.”

The need for the restriction is clear. It is there to disrupt and deter a detainee who seeks to use their right to a solicitor to pass on instructions to a third party. It already exists in legislation in schedule 8 to the 2000 Act, which the Bill seeks to replicate. In giving evidence to the Committee, the chair of the Law Society’s criminal law committee questioned why this restriction went beyond the equivalent provisions in PACE code H, which relate to a situation where an individual has been arrested on suspicion of a terrorism offence. PACE code H provides that:

“Authority to delay a detainee’s right to consult privately with a solicitor may be given only if the authorising officer has reasonable grounds to believe the solicitor the detainee wants to consult will, inadvertently or otherwise, pass on a message from the detainee or act in some other way which will have any of the consequences specified under paragraph 8 of Schedule 8 to the Terrorism Act 2000.”

Those consequences include harming others or tipping off terrorism suspects. In such circumstances,

“the detainee must be allowed to choose another solicitor.”

We have considered that carefully, but there are two main reasons why it is not feasible from an operational standpoint. First, in the circumstances described, where the police are concerned that an individual will use their solicitor to pass on instructions, allowing them access to a different solicitor in private will not prevent that possibility. The solicitor might be completely oblivious to the fact that their client is using them to pass on instructions to a third party. For instance, a detainee might ask the solicitor to contact someone and pass on a specific message, such as the fact that they are being detained and their location, with the solicitor unaware that the message will trigger some prearranged activity.

Secondly, inviting the detainee to choose another solicitor is not as straightforward at a UK port as it is at a police station. Unlike a detention under PACE, where there is time and access to a duty solicitor, it might take a substantial amount of time for an alternative solicitor to arrive at a UK port. To offer that option up front to the detainee, who is already presenting reasons to believe they are up to no good, provides another means for them to obstruct and frustrate the examination against a ticking detention clock.

Despite those reservations, I draw the Committee’s attention to two important safeguards that govern the exercise of such a direction. The first will ensure that a direction may be given only by an officer of the rank of assistant chief constable. The second will ensure that the officer present during the detainee’s legal consultation must not be connected with the detainee’s case. I reassure the Committee that the safeguards to the schedules have been carefully considered, following lessons learned through the exercise of the equivalent police powers, the work of the independent reviewers of terrorism legislation and our engagement with the public in respect of the existing powers for counter-terrorism purposes.

In relation to the amendments before us today, I stress that we should not hinder the ability of our law enforcement professionals to disrupt and deter those who present a threat to this country due to their involvement in terrorism or hostile state activity. Accordingly, I invite the hon. Member for Paisley and Renfrewshire North to withdraw his amendment.

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I do not propose to take this particular group of amendments to a vote at this stage, but I say to the Security Minister that the first of the two explanations given—that somehow solicitors bound by a code of conduct would be unwilling and unaware stooges passing on information to third parties—is not particularly credible. I do not think the distinction between a police station and a border security stop is particularly strong either, and I urge the Minister to look again at the practical steps around this. However, it is not my intention to push the amendments to a vote at this stage.

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I have to say that I remain somewhat unconvinced by the Minister’s arguments, and we may choose to revisit some of these amendments on Report, but at this stage I will keep my powder dry until the next group of amendments. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Ordered, That further consideration be now adjourned. —(Paul Maynard.)

Adjourned till Tuesday 10 July at twenty-five minutes past Nine o’clock.

Written evidence reported to the House

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