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The third safeguard on which I want to touch is what qualifies an official to make a decision, because it is important for the House to consider the accountability of the decision taker. Decisions are not taken by unelected officials. Asset-freezing decisions are made personally, assiduously and carefully by the Exchequer Secretary, and officials advising her draw their counsel from either the police or the Security Service, and, where appropriate, that may include information from criminal trials. Wider evidence must also be provided, where it exists, but the final decision rests with the Minister.

The fourth question on which I want to touch is transparency and whether decisions are taken in secret or in a transparent manner. It is essential that these decisions are made in a transparent manner, so the orders will continue to ensure that designated persons are informed of their designation along with an explanation, that the public are informed of the person's name and location by a notice on the Treasury's website, and that the House is informed through a quarterly report on the operation of the regime, including information on new designations, reviews and de-listings, the amount of funds frozen and licensing statistics.

Finally, there is the critical question of how decisions taken by the Exchequer Secretary are open to challenge; we might discuss this further later. The orders we seek to underpin provide a clear route by which any individual affected by a designation or a licence can contest the Exchequer Secretary's decision. They can make an application to the High Court to have that decision set aside. Courts can then judge whether the grounds of a decision were reasonable, and can scrutinise the Minister's decision that the designation was necessary for public safety. That scrutiny will include all the material before the Treasury when the decision was made and any material available that should have been considered. The courts have the power to quash Treasury designations if they are found not to have met the strict criteria set out in the orders. At the point of the designation, the Treasury issues a legal expenses licence, which includes legal aid. That means that the designated person is able to seek legal assistance immediately and challenge the Treasury's decision.

Mr. Dismore: Presumably, that is on the basis of the test of judicial review, according to my reading of the draft Bill. However, as long ago as the 2003-04 Session, my predecessor at the Joint Committee on Human Rights had already indicated that

My Committee comes back to that point time and again in other aspects of counter-terrorism policy, too. How can my right hon. Friend be sure that what he is proposing will be human rights compliant, bearing in mind the wealth of evidence to the contrary?

Mr. Byrne: I am confident that the courts have the necessary latitude to consider the two tests that an individual needs to fail to become designated. First, there must be reasonable evidence that they are involved in terrorist activity, and the courts are perfectly able to consider the evidence on which the Minister relied when making that decision. Secondly, the courts are able to consider whether the freezing of an individual's assets is necessary in order to protect the public. Even if there is
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information from closed sources, procedures are available that ensure that courts are able to review that material, too.

Mr. Hogg: The right hon. Gentleman is doing his best to reassure the House, but does he understand that there is a fundamental difference between judicial review and reviewing the merits? Judicial review is essentially designed to determine whether the Minister is acting properly, but reviewing the merits is basically designed to determine whether an order is just; and whereas the provisions deal with the former, they do not deal with the latter.

Mr. Byrne: I understand that, but I think that the protection in place is appropriate, because in the first instance we are dealing with whether there is reasonable suspicion-and reasonable suspicion is the right point on which to rely, because we are seeking to act in a pre-emptive manner in order to ensure that the economic resources available to somebody involved in terrorist activity are not used for a terrorist attack or the maintenance of terrorist infrastructure. The test of reasonable suspicion is a lower one, but clear guidance as to what constitutes reasonable suspicion is available. It is important that the courts are able to look at the evidence available to a Minister, on which that Minister relies, and investigate whether they made a proper and rational decision based on it. Thus, a second test also needs to be considered: whether the asset-freezing order put in place is needed for the protection of the public.

Mr. Gerrard: Let us be clear that the court will see that evidence but the person who is the subject of the order will not see it, because the special advocate procedure is being used. It is, thus, difficult for that person to produce counter-arguments to the evidence put before the court.

Mr. Byrne: Only closed-source evidence is used in the special advocate procedure, but we must ensure that appropriate checks and balances are in place. I am satisfied that against the test of reasonable suspicion judicial review is an appropriate way to ensure that Ministers act rationally and in the spirit of the law.

I wish to say a word about the sunset clause, which is important for the House to debate. We proposed a sunset clause period in this Bill ending 31 December 2010, but amendments have suggested that that is too long. The House must strike a balance between urgency and careful deliberation. The Bill is designed to solve the urgency problem; given that a stay of judgment was not handed down by the Supreme Court, it is important that assets frozen under the Terrorism Act 2006 remain frozen. Two further terrorism orders rely on the same UN Act for their legal substance and there is therefore a risk that they are vulnerable to being struck down. In addition, there is a problem in respect of those individuals covered by clause 3(1)(b) of the Al-Qaida and Taliban (United Nations Measures) Order 2006. However, these assets are frozen under EC regulations. The only issue with freezing things under EC regulations is that sanctions are not attached, so the Government will introduce secondary legislation to attach sanctions to those EC regulations.

Mr. Gummer: The Minister is being his usual charming self in explaining these matters, but I wish to press him again. There is a fundamental difference between the
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courts making a decision as to whether a Minister has acted properly and a decision as to whether a Minister has acted justly. The thing that I do not understand is why the Government do not think it proper to make sure that the issue of justice is involved when an appeal takes place, because that is why we are fighting terrorists. Justice is crucial to the whole argument and not to refer to it is worrying.

Mr. Byrne: I do not want to take a single word away from the opportunity that we will have to debate this legislation at more length. The right hon. Gentleman makes a good point to show why the House needs some time to debate our proposed transposition of the Orders in Council, on which we are relying, into primary legislation. These are exactly the kinds of debates that we need to test. The only point that I should make this afternoon is that the judicial review test is the norm in a number of other national security contexts and courts have demonstrated readily that it can be adapted to ensure an appropriately robust level of scrutiny of ministerial decisions.

Let us return to the final question of a sunset clause. If, as I hope, the House agrees this legislation over the two days, it will need to turn its mind to considering the right procedures for debating the full legislation in order to tease out some of the questions that have just been posed. This legislation equips the Executive with strong powers and I could not be confident that, given the looming elections and recesses, this job of scrutiny could be safely dispatched and a full Bill could be taken through both Houses before 31 July 2010-the date that I believe was proposed by the Liberal Democrats. We are therefore asking for a sunset clause of 31 December, in order to ensure that the draft Bill, published last week, is debated in full.

In conclusion, in these times of severe threat to our national security we cannot afford to fail to take the necessary steps to disarm terrorists or to disarm them of their financial power. Without primary legislation of the kind before the House, we will leave gaps in our defences that will give flexibility and capability to people who intend serious harm to the British public. The Bill provides for the safeguards for the citizen set out in the orders to remain in place. Those safeguards, I would argue, are tried and tested defences against the misuse of power by the Executive. At the same time, the Bill will provide Parliament with the proper time needed to consider and debate permanent legislation in full and I therefore commend the Bill to the House.

5.45 pm

Mr. Mark Hoban (Fareham) (Con): Let me make it clear that we will support the Bill tonight. We agree with the Government that there need to be proper controls in place to prevent terrorists and suspected terrorists from having access to their financial resources and the financial system. However, the Government need to recognise that we are here tonight, pushing through this emergency retrospective legislation, because they failed, despite many warnings, to put the asset-freezing regime on to a proper legislative footing. If they had heeded those warnings, we could have dealt with these issues through the proper consideration of a proper Bill, rather than with the three-clause emergency Bill before us today.


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Each of us wants to ensure that our country is protected from terrorist threats. There are many aspects to those threats, but one of the essential elements is finance-the money to buy the plane tickets, to buy chemicals, or to rent a lock-up garage. Although the three orders at the heart of the Bill cover only 33 people and £151,000, that would be sufficient to fund terrorist activity. By denying terrorists or those suspected of participating in terrorist acts access to their funds and the financial system, we are restricting their ability to mount further terrorist acts.

If we freeze the assets of terrorists or suspected terrorists, it helps us to thwart the acts that they were planning, which is something that the Prime Minister emphasised when he was Chancellor. In a speech at Chatham House on 10 October 2006, he set out clearly the importance of this issue, ranking the importance of tracking terrorist assets alongside that of the code breakers of Bletchley Park during the second world war. He said that

He stressed that it was important not just to be able to track assets but to take the right steps to freeze those assets. He went on to say:

Of course, it was the 2006 order that was quashed by the Supreme Court on 27 January. Now we know what the Prime Minister meant when he went on to say:

So what was the weakest link? It is now clear that it was the order about which the Prime Minister boasted. The modern-day Bletchley Park was neutered because the order was quashed.

Mr. Gummer: I think my hon. Friend is being too kind to the Government. The problem is that this attitude is not limited to these issues-the Government, on almost every issue, would prefer legislation that is not debated in the House and that does not receive proper scrutiny to legislation that goes through the House. My hon. Friend ought not to limit his comments to this situation, serious though it is.

Mr. Hoban: My right hon. Friend is right. The Government have sought to limit scrutiny of legislation on a series of measures and they have sought to override the interests of Parliament. At the heart of the reasons behind the need for the Bill today is the fact that the Government overrode the interests of Parliament-they circumvented Parliament and they are paying the price for that by having to force through this Bill.

I was referring to the Prime Minister's speech at Chatham House. He went on to say:


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But it seems that the complacency to which the then Chancellor of the Exchequer referred was complacency at the heart of the Treasury, which failed, despite repeated warnings, to put the orders on a proper basis that would withstand legal challenge. As I shall set out in more detail later, the Treasury has had plenty of warnings about the legislative basis for the orders, but it was complacent and it failed to act, thereby putting us in the position that we are in today of needing to pass the legislation to safeguard our nation's interests.

This is another example of the Government's cavalier attitude to Parliament. The orders, which deny fundamental human rights, were put in place without proper parliamentary scrutiny. Let me give my right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer) a few more examples. The Supreme Court announced that it was quashing the orders on the same day that the Exchequer Secretary was brought before the House to explain why there had not been proper parliamentary scrutiny of another Treasury decision that related to terrorism. Later this month, we are to debate a package of reforms that will strengthen the House and weaken the Executive's grip on it, but the relevant order has been written in a way that minimises the chance of those reforms going through. Even in their dying days, the Government have yet to learn that one cannot ignore Parliament. Today's emergency Bill is a reminder of what can happen when one does. If the Government had respected Parliament and put primary legislation in place, they would have avoided having to rush through these emergency measures today.

I do not particularly want to rehearse the details of the case that the Supreme Court heard or the reasons for the Court's judgment, but I think that we need to understand why the Government are having to introduce this Bill today. As I have said, we all recognise the importance that finances and access to the financial system play in terrorism. The three orders that are covered by the Bill restrict the ability of those who are suspected of involvement in terrorist acts to access their money and the system, but that process is intrusive, as Lord Hope made clear in paragraph 38 of the Court's judgment. He said:

terrorism order and the al-Qaeda order

He went on to say, in paragraph 39:

The impact of the restrictions on the lives of the people who are affected by the orders should not be underestimated. In paragraph 31, Lord Hope referred to three suspects-A, K and M-and explained the effects of the orders on them. He said:

Jacqui Smith (Redditch) (Lab): Given the hon. Gentleman's understandable concerns about the impact of such measures on families, does he welcome, as I do, the Treasury's recent decision not to investigate or impose on spouses restrictions such as those he is concerned about? Many of us share his concerns about spouses, but the Treasury has already acted on those issues.

Mr. Hoban: I am trying to illustrate the impact that the regime has. The Treasury has relaxed some of the rules and there has been a change in relation to the nature of the three orders. There has also been reform of the system of licensing and exemption. In the 2009 order, there is much greater acceptance of the terms; indeed, the Treasury is trying to migrate a number of the people who are covered by the earlier orders on to the 2009 order.

The judgment continues:

So the Government have introduced an intrusive regime that denies people who are suspected of crimes some of their fundamental rights under the European convention on human rights, including those under article 1 on protection of property, article 8 on respect for privacy and family life and article 6 on the right to a fair trial. As Lord Brown argued in paragraph 192:

He went on:

David Howarth: Before the hon. Gentleman moves on to the fundamental rights aspect of the orders, may I bring him back to an earlier quote from the Supreme Court's judgment, which stated that A and K have disappeared? How does it help the fight against terrorism that people who are suspected of taking part in terrorism simply go underground?

Mr. Hoban: The hon. Gentleman has a point. I assume, and hope, that while A and K might have disappeared in the eyes of their solicitors and the judges, they have not disappeared in the eyes of the police and security services. Perhaps the Minister can clarify that point later. It would be a perverse reaction to the orders for A and K to disappear without trace.

What was the basis of the orders? As we have established, they were introduced under section 1 of the United Nations Act 1946, which was enacted to enable the implementation of the UN charter and Security Council resolutions. Measures under section 1 of the Act are introduced by Orders in Council, so there is no primary legislation or secondary legislation under either the affirmative or the less onerous negative procedure. So
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those fundamental breaches of human rights were put into force by the Executive-the Government-and not by Parliament. The Supreme Court has ruled that the orders go beyond what is required to implement the relevant Security Council resolution and are therefore ultra vires, but how did they go beyond the resolution? It was because of the reasonable suspicion test. Article 4(2) of the Terrorism (United Nations Measures) Order 2006 states:


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