Terrorist Asset-Freezing etc. Bill [HL]

My Lords, I thank noble Lords for their contributions, which have made for a stimulating and interesting debate and have played an essential role in providing full and proper scrutiny as we embark on this legislation. I am particularly grateful for the support from the opposition Front Bench. I opened this debate by observing that this month marks the five-year anniversary of the London bombings. I believe the whole House will agree with me that we must continue to guard against the threat to the UK from international terrorism. Importantly, a number of contributions this afternoon put this whole debate into context. We were reminded of the local and community context by the noble Baroness, Lady Hughes of Stretford, in her very welcome maiden speech; my noble friend Lord Sheikh also addressed this. At the other end of the scale, we were reminded of some of the global contexts, again in a striking maiden speech, by the noble Lord, Lord Davies of Stamford, who referred not least to piracy. My noble friend Lord Patten not only put the debate into its proper global context but even took us into the realm of cybercrime. This context is very relevant and points to the challenges posed by terrorist activity. In this context, the Government have inherited an asset-freezing regime that is an essential part of the UK’s counterterrorism toolkit but which has not been grounded on a secure legislative footing, an asset-freezing regime which the UK is required to have as part of its international obligations but which exists only under temporary legislation. The debate today has taken us a step closer to resolving this undesirable situation. The Government have rightly prioritised national security and public protection, and through this Bill we will ensure that suspected terrorist funds cannot be diverted and used for terrorist purposes. This will help to ensure that the UK financial system cannot be abused by would-be terrorists. But this Government are progressive and so is this Bill. It reasonably balances the requirements of national security with protecting civil liberties. It puts safeguards that did not exist under the 2006 order on a permanent and secure footing, and introduces additional mechanisms to assist Parliament in effectively monitoring the asset-freezing regime. None the less, we have today debated the merits of this legislation and I will now turn to some of the major points raised. I am reminded by the noble Lord, Lord Davies of Oldham, that I might have tested the patience of some Members of your Lordships’ House last night in trying to respond to all the points in a long debate. I hope that noble Lords will forgive me if I do not address every point this evening, but I will write later on points which have not otherwise been addressed. My noble friend Lady Falkner of Margravine asked about the number of people and the amount of money that was frozen. I mentioned it at the beginning, but I will mention it again. We are referring to only 26 people and only £150,000, but we have to remember that not only were some of those 26 people involved in such planned outrages as the 21 July Tube plot, the Glasgow airport bombs and so on, but that the amounts of money that can do so much damage can be very small. The estimates suggest that the 7 July London Tube bombings cost only £8,000. Another part of the Bill which has been much discussed is the Home Office review. I will only repeat what I have said before in answer to points raised by the noble and learned Lord, Lord Davidson, my noble friend Lady Hamwee and my noble and learned friend Lord Mackay of Clashfern. The Treasury is working closely and is co-ordinating with the Home Office review. The Home Secretary has said that the review will be reported to Parliament after the Summer Recess, which, for the other place, ends rather earlier than ours. I repeat what I said before: it would be appropriate to introduce any government amendments, if we consider them to be appropriate, in Committee. A number of different questions and comments were raised about consolidation of the legislation into a single Bill, and whether it is counterterrorist legislation or asset-freezing legislation, by my noble friends Lord Patten, Lady Falkner of Margravine and Lady Hamwee, the noble and learned Lord, Lord Davidson, and the noble Lords, Lord Pannick, Lord Myners and Lord Davies of Stamford. At the outset I said that of course there is merit in consolidation, but producing consolidated legislation would be a very significant task. There was reference to eight months having passed since February. It has not been that long since the new Government took office and it would not be a simple matter to put together consolidated legislation. Our priority has to be to get the current legislation in place with appropriate parliamentary scrutiny before 31 December. I turn now to some of the substantive concerns about the legal tests in the Bill. Understandably, there has been a lot of discussion about the reasonable suspicion test. Questions were raised again by my noble friend Lady Hamwee, the noble Lords, Lord Pannick and Lord Myners, and the most reverend Primate the Archbishop of York in particular. I and the Government very much recognise the concerns that have been expressed, but I have explained and would reiterate the operational benefits of using suspicion to allow early action. But this is a topic that we will consider alongside the Home Office review. Since there have been quotations from Justices of the Supreme Court, perhaps I may read out something else that the noble and learned Lord, Lord Rodger, said to this point—that, "““it may well be that, in a significant number of cases, because of its variable quality and fragmentary nature, the available information does not permit the Treasury to go further than to say that they have reasonable grounds for suspecting that the person concerned is committing or facilitating terrorist acts. If so, then it may be better to base designation on reasonable grounds for suspicion rather than on some higher standard which could not be readily achieved and which, if applied faithfully, would mean that the Treasury failed to freeze a significant number of assets which were actually under the control of people who committed … terrorist acts””." This is by no means an easy matter, even for the courts. A related question was asked by my noble friend Lord Sheikh about decisions breaching or not breaching Article 8—the right to respect for private life. I can assure him that the Treasury considers interference with human rights when deciding to make a direction, and that directions are made only when necessary for public protection. When deciding what is necessary, of course the Treasury carefully balances individual rights against public safety. A number of questions were put about appeals processes and the question of judicial review. Points were made by my noble and learned friend Lord Mackay of Clashfern and my noble friend Lady Hamwee. We seek to avoid being in a position where there is a need to challenge Treasury licensing decisions. We seek to take a fair and proportionate approach so that challenges are avoided, but if there is a need to challenge, we think that judicial review is the right course. The process can be expedited if the court thinks that there is a need to consider licensing decisions quickly, and indeed the Constitution Committee recognised that the judicial review process is a meaningful scrutiny process. But, again, we recognise that this is an issue to be examined further alongside the Home Office review. The most reverend Primate the Archbishop of York asked whether judicial review should be automatic. Most UK asset freezes are made at the same time as criminal arrest and charge, so I believe that automatic judicial review would be unnecessary when many people are subject to prosecution for terrorist offences. However, I will take the matter away and think about it further. Another related point was raised by the noble Lord, Lord Davies of Stamford, on the question of whether the court should have access to information considered by the Minister. We expect the court to take a robust approach to any judicial review, examining the evidence on which a decision is made. This would include consideration of closed material so that the court would see all the information seen by the Minister if it wanted to do so. Again, of course, the Treasury in this context always seeks to comply with Article 6 of the ECHR. The noble Lord, Lord Myners, asked about the availability of legal aid. I remind him that the Treasury has issued a general licence to ensure that, where people are entitled to legal aid, the asset-freezing regime does not prevent them accessing it. The noble and learned Lord, Lord Davidson, asked a question about innocent people getting off the list. In that context, the noble and learned Lord, Lord Rodger of Earlsferry, was referring to the AQ regime, where the UN has a list of designated persons. The AQ regime is not part of this Bill and I am not sure whether I need to address that point. The noble Lord, Lord Davies of Stamford, asked what would happen if someone was the subject of a wrongful freezing order. If a person’s asset freeze is quashed, that person can start an action for damages, including for breach of contract and under the Human Rights Act. We invite designated persons to make representations to the Treasury on their asset freeze to enable them to challenge evidence that the Treasury has used. I am looking nervously at the clock but we may get through the points. My noble friend Lord Patten referred to the importance of tackling the evolving nature of terrorist finance and questioned the poor performance of SOCA. I welcome his important contribution in recognising the evolving threat of terrorist finance and organised crime. The Government are committed to tackling these threats robustly and are already taking steps to do so. That is exactly what my right honourable friend the Home Secretary’s announcement on 6 July on proposals to establish a new national crime agency seeks to do. As I said in opening, the financial services sector is very much in the front line. My noble friend Lord Sheikh asked about the guidance that is given to companies providing financial services. I reiterate that we recognise the crucial role that the financial sector plays in implementing asset freezing. The Treasury works closely with the financial sector to provide advice on implementation issues and, in that context, we welcome the input of the British Bankers’ Association to our recent public consultation. There were a number of questions about the role of the independent reviewer as proposed in the Bill. The noble and learned Lord, Lord Davidson, asked about the cost in relation to the impact assessment, as did the most reverend Primate the Archbishop of York. The noble Lord, Lord Myners, asked about identity and commented on the need for an independent reviewer. The independent reviewer will be reimbursed but I cannot put a figure on it at this stage. In the current fiscal climate it will certainly not be a significant sum in relation to the totality of the impact of the legislation. We shall not appoint a reviewer until the legislation has been passed but, when we do, we will want someone who will be an effective and credible reviewer and who will take an independent stance. There were a couple of questions on procedural matters, if I may put it that way. My noble friend Lord Patten asked whether the Bill will be extended quickly to the Channel Islands and the Isle of Man. Yes, it will. We are already discussing this with the overseas territories and the dependent territories and we shall seek to ensure that they are covered either by an order made under the Bill or through their own legislation. This brings me to the question raised by the noble Lord, Lord Pannick—I do not know whether it is the most important point of the day—about the mystery of the word ““etc.”” appearing in the title of the Bill. That was something that I questioned when the Bill was first presented to me, but I assure the noble Lord that there is nothing behind this, other than that it was added to reflect the amendments to the Counter-Terrorism Act in Part 2 of the Bill. That is why ““etc.”” needed to be put in the Title. There is absolutely no intention of widening the Bill to include any wider conclusions from the Home Office review or anything. I am sorry to prick that sense of mystery.