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"The conditions are that the Treasury have reasonable grounds for suspecting that the person is or may be-
(a) a person who commits, attempts to commit, participates in or facilitates the commission of acts of terrorism".
The Court took the view that these provisions exceed the powers given to the Treasury under section 1 of the 1946 Act. In paragraph 61 of his judgment, Lord Hope said:
"I would hold that, by introducing the reasonable suspicion test as a means of giving effect to"
"the Treasury exceeded their powers under section 1(1) of the 1946 Act. This is a clear example of an attempt to adversely affect the basic rights of the citizen without the clear authority of Parliament."
Mr. Hogg: The fact that the Treasury adopted the reasonable suspicion test, which has proved unsatisfactory in the eyes of the Supreme Court, demonstrates the lack of wisdom of legislating by way of secondary legislation. Does my hon. Friend agree that if this matter had gone before the House in primary legislation, there would have been substantial protest from us and, no doubt, other right hon. and hon. Members regarding the use of the reasonable suspicion test, which is a low standard of proof?
Mr. Hoban: My right hon. and learned Friend makes an important point, and it was because of the lack of parliamentary scrutiny that the Supreme Court reached the conclusion that it did on the orders.
Let me continue to quote from paragraph 61. It goes on to say that
"fundamental rights cannot be overridden by general or ambiguous words. The absence of any indication that Parliament had the imposition of restrictions on the freedom of individuals in mind when the provisions of the 1946 Act were being debated makes it impossible to say that it squarely confronted those effects and was willing to accept the political cost when that measure was enacted. In my opinion"
"is ultra vires section 1(1) of the 1946 Act".
So if there had been a proper parliamentary process that had sanctioned depriving those who were suspected of involvement in terrorist acts of their rights, the Supreme Court would not have quashed the orders, but in the absence of that process, the Court felt that the powers were outside the scope of the Act.
As several right hon. and hon. Members have said, there were plenty of warnings. In addition to the way in which the case was pursued through the courts, there were three other warnings to the Government about the risk that they were taking in using the 1946 Act as the basis of the terrorist freezing orders. Those warnings were the Foreign Affairs Committee report on Sierra Leone in 1999, the Newton committee report of 2003, and the precedents used in other common law jurisdictions.
I shall say a little about them to demonstrate that the Government had the warnings but chose not to hear them.
The Foreign Affairs Committee looked at how the Government imposed sanctions on Sierra Leone using the 1946 Act, and highlighted the need to use primary legislation to underpin the future use of those powers. In its 1999 report, the Committee drew attention to the way in which a resolution of the Security Council about the imposition of sanctions against Sierra Leone had been implemented by an Order in Council, but the Security Council resolution did not define Sierra Leone, leaving the extent of its application ambiguous. The Order in Council defined it in terms that removed any ambiguity but arguably went beyond the scope of the resolution. In the same way, in the present order the Government arguably went beyond the scope of the Security Council resolution that they were seeking to implement.
In its report, the Committee said that the way in which the Order in Council was dealt with was unacceptable as it was subject to no parliamentary procedure. Had it been necessary-this goes back to the point made by my right hon. Friend the Member for Suffolk, Coastal-for a Minister to appear before a Standing Committee on Delegated Legislation or to defend the order on the Floor of the House of Lords, it was likely that wider attention would have been given to its true meaning and extent.
In paragraph 23 of its report the Select Committee recommended that
"the United Nations Act 1946 be amended so that delegated legislation made under section 1 was subject to affirmative resolution in both Houses of Parliament."
So the Foreign Affairs Committee highlighted the problem that we see today, where the order overreached the Security Council resolution, and recommended that the affirmative resolution procedure should be used in the future.
A second warning arose from Lord Newton's review of the Anti-terrorism, Crime and Security Act 2001, which conferred powers on the Treasury to make freezing orders on residents of a country or territory outside the UK. Comment has already been made about the number of Acts on the statute book that could be used to freeze assets. A point that Justice made in its submission on the Bill was to ask why parts 1 and 2 of that Act and parts of the Terrorism Act 2000 and the Prevention of Terrorism Act 2005 could not have been used in place of the Bill. It would be helpful if the Minister addressed that issue when winding up the debate, as it has triggered widespread concern.
The 2001 Act was reviewed by a Committee of Privy Counsellors chaired by Lord Newton. Lord Newton said in his report that powers under part 2 were unlikely to be used while the 2001 order was in place. He argued in his conclusions that
"freezing orders for specific use against terrorism should be addressed again in primary legislation, based on the well-tested provisions of the Terrorism (United Nations Measures) Order 2001".
This is another warning that the basis of the orders should be explicit in primary legislation. In retrospect, the 2001 order might not be seen as robust as later iterations, but the point that Lord Newton made about primary legislation is still valid.
The third warning was the way in which other nations have implemented the orders. Having originally opted for implementation using their equivalents of the 1946 Act, New Zealand and Australia subsequently set up the orders using primary legislation. Lord Hope responded to this by stating in paragraph 50 of the judgment:
"The regimes that both Australia and New Zealand have introduced by means of primary legislation are exacting. But they contain various, albeit limited, safeguards and in so far as they interfere with basic rights of the individual that interference has been expressly authorised by their respective legislatures."
That is not the route that the Government have chosen to go down.
So there were warnings from the Foreign Affairs Committee and Lord Newton's committee and the precedent from other common law jurisdictions that primary legislation was the preferred route, but the Government chose to ignore those and we have to put through this emergency legislation today.
No one should be under any illusions about the gravity of the measures in the Bill. Because the Supreme Court quashed the orders on Thursday morning, those subject to the orders could have accessed their bank accounts and the financial system with impunity since then. The Treasury sought the co-operation of the financial services sector to ensure that this could not happen, even though those subject to the order have the same right as you and I to use those assets.
I should like to ask the Minister about the period between the Supreme Court's quashing of the orders on Thursday and the Bill gaining Royal Assent. Can she confirm that the provisions in clause 2 are sufficient to protect banks and other financial institutions from claims made by those subject to the freezing orders if, between 4 February and Royal Assent, they sought to withdraw money from their bank accounts? Has the Treasury granted an indemnity to any financial institution covered by this?
Where the Treasury has been given powers to grant further directions in clause 1(3)(a), can the Minister clarify under which order-the 2001 order, the 2006 order or the 2009 order-new directions would be issued where a terror suspect has been recently identified?
The final point that I want to raise with the Minister, to which I will return at greater length in the Committee stage, is the sunset clause. As I indicated in an intervention on the Chief Secretary, until last Thursday there was only one plan in town. It was to publish a longer, substantial Bill that would put the freezing orders on a proper footing through primary legislation, with a view to completing the parliamentary process by no later than 31 March 2010. That is the document that was published last week.
The view then was that that would give time for adequate scrutiny and it would have allowed Parliament to debate the measures properly. That is the offer that was on the table, and we reiterated to the Exchequer Secretary last Thursday that we were content to continue down that route, as well as participating in discussion of the Bill today. We believe it is right for this to happen, and it would reduce the period during which the Government were dependent on this emergency Bill. That is the basis of the amendment that we will move later.
The issue demonstrates the importance of reviewing the patchwork of anti-terrorism legislation. In its submission, Justice asked why parts 1 and 2 of the
Anti-terrorism, Crime and Security Act 2001 and parts of the Terrorism Act 2000 and the Prevention of Terrorism Act 2005 could not be used in place of the Bill. Surely it is time to move beyond a piecemeal approach to national security legislation, and consolidate the legislation and ensure that it is compatible with fundamental rights and freedoms.
The Bill is necessary, because without it those suspected of involvement in terrorist activity could have been free to use their financial assets and the financial system. We do not know how they would have used this freedom, but it would have been reckless for the Government not to take steps to restrict that access, given the Supreme Court's ruling. But in supporting the Government's actions today, we cannot and will not ignore the fact that the Government are in this mess because they failed, despite all the warnings, to put the orders on to a proper basis. To deny people's right to the freedoms that we take for granted, they bypassed Parliament and failed to seek Parliament's approval for the action that they took. The Government's repeated failure to respect Parliament has led them to the position that they are in today.
In 2006 the Prime Minister said that
"as terrorist finance operates on a global scale, we know that we are only as strong as our weakest links.".
Today proves that the weakest link was the Treasury, the Department that the Prime Minister ran. It was the Department that failed to put the orders on to a proper footing. It failed to respect Parliament. It failed to respond to the warning signs from home and abroad. In passing the Bill tonight, we are bailing out the Prime Minister and getting the Government out of a hole, but it is the right thing to do to safeguard our country.
6.8 pm
Jacqui Smith (Redditch) (Lab): I welcome the Bill and the speed with which the Government have introduced it. Nobody would want any Bill to have to pass all its stages in one day, and for the House to miss the opportunity of pre-legislative scrutiny, but I am wholly convinced that the serious risk of no effective provisions being in place for terrorist asset freezing following the Supreme Court decision and, significantly, following the Supreme Court's refusal to suspend that judgment, justifies the unusual action being taken by the Government today.
Opposition Members have made much about the Government somehow failing to heed the warning signs of legal action against the orders, but the High Court's quashing of the order in early 2008 was overturned later that year by the Court of Appeal.
Mr. Hogg: I can understand the right hon. Lady taking a legalistic point of view, but surely she should also go to the high ground and look back to 2001 and Lord Newton's committee, or to 2004 and her hon. Friend the Member for Hendon (Mr. Dismore) and his Joint Committee on Human Rights. They did not interpret the matter on legalistic grounds; they based their contention on the fact that the measures should have been in primary legislation on broad, ethical grounds.
Jacqui Smith:
My point is that there was not only significant legal advice that the 1946 Act was a legitimate ground for introducing Orders in Council in order to
translate UN Security Council resolutions, but legal justification between October 2008 and the point at which the Supreme Court upheld once again those individual appeals. The idea that every time a piece of legislation-primary or secondary-faces a challenge in the courts, the Government should rush to Parliament to pass separate legislation in order to mitigate the challenge is ridiculous. If anybody would like to estimate the time that we would spend here legislating on that basis, they would find that none of us would get home on any night at all.
As my right hon. Friend the Chief Secretary to the Treasury said, we continue to face a serious threat from terrorism; and, despite the hard work of our police and our security and intelligence agencies at home and abroad, recent events have demonstrated that the threat remains from the al-Qaeda leadership, their immediate associates, their affiliates throughout the world and from rogue individuals who espouse their view and ideology. The scope and nature of that threat mean that we need a broad approach to tackling it. With the rule of law and the protection of human rights at its heart, the first priority of any counter-terror strategy must be to catch and prosecute those responsible for planning, facilitating and carrying out attacks, and to take action through our courts. The almost 200 successful convictions since 2001 are evidence of our commitment to, and success in, pursuing that route.
However, the threat is such that we should also use the broadest range of methods, including non-prosecution where necessary, to disrupt activity and make the UK as hostile as possible to terrorist planning and facilitation. An important element of that must be cutting the finance that funds attacks and networks. Terrorists need money to plan and carry out attacks, although, as my right hon. Friend identified, it is worrying how little an amount can cause terrible damage and loss of life. As he said, it is estimated that the 7/7 attacks on London cost £8,000. The improvised explosive devices that are used to attack our forces abroad can cost much less even than that.
Terrorist organisations also need money to sustain networks and provide financial support to terrorists and their families. The sums are likely to be greater, but they provide for the infrastructure of terror. We need to ensure that those who radicalise individuals and peddle the ideology that supports terrorism are tackled as they raise the funds for such work. It is suggested that work to limit funding internationally is successfully hampering the work of al-Qaeda. That activity is welcome, but it shows how important action on terror financing can be.
In recent years, that work has been scaled up throughout Government, involving the Serious Organised Crime Agency and the private sector. Work is in place to deter terrorists from using the financial system, to detect them when they do and to use financial tools to disrupt them. I understand that financial intelligence and investigation tools are used to support all counter-terrorist investigations, and we have excellent, specialist terrorist financial investigation capacity in this country.
Asset freezing is only one element of that work, but it is important. As my right hon. Friend said, our asset-freezing regime is based on international recognition, through the UN, of its significance in helping to counter the terror threat. As we have heard, the UN maintains under Security Council resolution 1267 a list of individuals and entities connected to al-Qaeda and the Taliban.
Security Council resolution 1373, adopted in September 2001, broadened that approach, recognising that individual states needed to take action against those within their territories who funded terrorism, even if they were not on the UN-held list. Given the fragmented terror threat and the growing phenomenon of individuals who self-radicalise or act alone following radicalisation, the legislation before us seems an important and appropriate development of the asset-freezing regime. That may well explain, as my right hon. Friend and my hon. Friend the Exchequer Secretary have explained, why the Anti-Terrorism, Crime and Security Act 2001, which confines itself to restraints on terrorists or acts that have been inspired overseas, may be insufficient. Given the fragmented terror threat, it is not inconceivable that wholly domestically organised and determined terrorist threats and networks may be operating, and we need an asset-freezing tool to use against them, too.
At the heart of the Supreme Court ruling was neither the principle of asset freezing nor even its practice in the UK, although the judges rightly commented on the onerous requirements, as other Members have said. At its heart was the translation of Security Council resolutions into UK law.
David Howarth: It is important for the House to understand why the Supreme Court did not consider the human rights aspect of the legislation. It thinks, and thought, that, because of the al-Jedda case, the implementation of Security Council resolutions takes precedence over all human rights under the European convention. That seems to be a wholly different position from saying that it is all right in human rights terms to pass such legislation.
Jacqui Smith: I was not making that argument; I was arguing that the Supreme Court made its decision on the basis of the translation of UN Security Council resolutions into UK law, rather than on the detail of the legislation's implementation or even on some of the other questions, which Members from all parts have rightly raised.
Mr. Hogg: The right hon. Lady is right in part, but she will also accept that Lord Hope's judgment, for example, was to the effect that the provisions in the orders were, in a democratic state, incompatible with civil and political rights.
Jacqui Smith: Surely the key element is that, given the significant and onerous nature of the proposals, it was wrong to implement them without sufficient parliamentary oversight and scrutiny. The Government are attempting to put right the first stage of that today.
Given the seriousness of the threat, and given that there was legal advice to support the use of the 1946 Act, it is understandable that the Government thought it suitable. Its use has been ruled ultra vires, and the right response is to bring forward primary legislation, first, as quickly as possible in order to plug the gap.
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