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The hon. and learned Member for Beaconsfield asked whether it would be possible to establish an office where people could submit the full details of what was being proposed and be given a tick or a cross against it. I do not think it desirable to provide for such a scheme in the Bill, and in any event it would not be possible to do so
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in the time available to us. Certainly we have been given no advice to that effect. What I will say to the hon. and learned Gentleman, however, is that clause 7(2), plus the guidance, will give commercial organisations that have acted responsibly, assiduously and in good faith such a complete defence to any prosecution in respect of an individual case that it is unlikely that one would ever be launched.

Clause 7(1) makes a "relevant commercial organisation" guilty of an offence if a person associated with that organisation

the organisation, or

the organisation.

However, the second limb of the clause-expressed in subsection (2)-states that it is a defence for the relevant commercial organisation to prove that it

the organisation "from undertaking such conduct."

This measure is not designed to trip up decent companies that are acting responsibly or in good faith. On the contrary, it is designed to help them, because, as the experience from other countries has shown, the more it is made an imperative that those representing major businesses across the world are themselves under a requirement to act lawfully, the less will be the opportunity for those who are so tempted either to seek or offer bribes. I undertake to this House that we will keep the guidance issue carefully under review; it will have to be a kind of living document, therefore.

Clause 13 has proved to be a sticking point. It provides for a defence for conduct necessary for the proper exercise of the functions of the intelligence services and the armed forces engaged on active service. The House should be in no doubt of the need for such a defence. Members will understand that I cannot go into operational details, but there are circumstances in which it is necessary for the effective discharge of the functions of one of the intelligence agencies or the armed forces that they engage in conduct that would otherwise amount to an offence under clauses 1 and 2. They need to do so because they are working to protect us and our liberties in difficult, and often dangerous, circumstances. We are being very straightforward about that in making provision for this defence.

The truth is that nowadays our intelligence services are subjected to a far higher degree of transparency and accountability than those of most other comparable countries. Again, the House will, I know, excuse me for not being able to go into as much detail as I would like, but the difference is striking. That used not to be the case, of course. Before the passage of the Security Service Act 1989, our intelligence and security agencies-GCHQ, the Secret Intelligence Service and the Security Service-were never "averred", a strange verb meaning that their existence was never admitted to. Everybody denied that these agencies existed, even though there they were in Century house above a petrol station on
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the St. George's road to the Elephant, and in Gower street and- [Interruption.] No, it is not Michael Foot again. They were also in Curzon street. That changed, however. First, we had the 1989 Act, and then the Intelligence Services Act 1994, which also established the Intelligence and Security Committee. Those Acts, along with the Regulation of Investigatory Powers Act 2000, mean that we now have substantial ministerial, parliamentary and judicial oversight.

David Howarth: May I put to the Secretary of State a point about this clause that was made in the other place? These services have a function that goes beyond national security: upholding the economic interests of the country. It has been suggested that it is not appropriate for the permission to bribe, or to be bribed, to be used for that purpose, as opposed to the main purpose of national security.

Mr. Straw: I understand, of course, the concerns that are felt about the operation of the intelligence and security agencies, because they have to work in secret in order to protect our liberties, and there is not only a paradox in that, but a tension, too. Also, to be blunt, those anxieties have clearly been heightened by recent court decisions and what has been exposed as a result, although that has only come out because of the level of transparency that this House has put in place from the specific Acts I have just mentioned through to the Human Rights Act 1998.

I was going to make the following point later, but perhaps I should mention it now. I am in a literally unique position in this House, as over the years I have been responsible for all three of the intelligence agencies. My view is that the functions that are laid down-which, as the hon. Member for Cambridge (David Howarth) said, include economic well-being-are as narrowly defined as they can be. It would be very difficult-in fact it would involve some casuistry and theology-to say, "They could do this, but they can't do that." In an instant case, it can be difficult to say exactly which limb of which function a particular operation might come under, and usually they come under more than one. I therefore hope the hon. Gentleman does not pursue that point.

Hugh Bayley (City of York) (Lab): Most Members recognise that there might be occasions when the intelligence and security services will offer cash or some other advantage in order to obtain information. I am, however, concerned about how the term "active service" in clause 13 might be interpreted. I would not under any circumstances want the procurement of military or intelligence equipment to be deemed to be exempt from the provisions of this Bill because that equipment was to be used in a military operation. Can my right hon. Friend give me the assurance I seek?

Mr. Straw: I have to rely on what clause 13 says:

or, secondly, that it was necessary in relation to

I think my hon. Friend was referring to the first of those limbs.

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Hugh Bayley: With respect, I was referring to both, and in particular to a concern in respect of the armed forces. I seek an assurance that this clause would not permit the armed forces to offer a bribe in securing the purchase of military or security equipment.

Mr. Straw: If my hon. Friend has a concern in respect of the armed forces, I should point out to him that the clause states that

and there are various definitions following that statement. My hon. Friend will, I hope, excuse me if I do not speculate about the precise terms of any decision made variously by the directors general or a Secretary of State about a particular operation. I shall return to this point later. The decisions that are taken are not taken capriciously. The functions of the three services are laid down in two Acts-the 1989 Act deals with the Security Service's functions and the 1994 Act deals with those of the Secret Intelligence Service and GCHQ. I assure my hon. Friend that it is unlikely or wholly improbable that the kind of circumstances that he describes would arise.

Mr. Grieve: I am trying to remember the exact wording, but I seem to recollect that one of the functions of the Security Service and the SIS is to ensure the economic security or well-being of the nation. One can imagine how one interpretation of that could suggest that bribery might be used to secure some economic or commercial advantage. I am sure that that is not the Government's intention, but the issue will have to be addressed in the explanation given as the Bill goes through the House.

Mr. Straw: I should say to the hon. and learned Gentleman that the wording slightly differs. One function of the Security Service is

there is no full stop, because with a bit of luck that is a function of the Treasury, the Department for Business, Innovation and Skills and the rest of us-

As I say, similar, though not the same, language is used in respect of the other two agencies. It is right that these provisions should be scrutinised, but I hope that it will be possible to reassure the House and the Committee on them.

We could have done what other jurisdictions do, which is to be silent about all this. It is much easier to be silent about this, particularly in civil Napoleonic systems, as I know to my certain knowledge, having discussed what protections are given in practice to intelligence agencies by the judicial systems of some of our European partners. Their approach is straightforward and it is a matter of policy: nothing is on the statute book, but everybody knows what they need to do and everybody does it. Our system is much more open and because of that I thought it would have been disingenuous to have remained silent on this issue and it would have been intensely unfair on officers or agents of the intelligence services and armed forces who may be asked to undertake
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this unpleasant activity in the course of their work. Nobody should be put in a position where they are placed at risk of prosecution for engaging in work that would otherwise be unlawful but which is necessary in pursuit of the security of the state. I believe that there is common ground on that.

The question to address is what form the special provision for the intelligence services and armed forces should take. The 2003 and 2009 draft Bills contained provision for an authorisation scheme cast in similar terms to section 7 of the 1994 Act. That provides for an authorisation by the Secretary of State and, in practice, by the Foreign Secretary of the day. An authorisation allows members of the agencies to undertake activities that would otherwise be in breach of the criminal law. That was the original proposal, but the Joint Committee that examined the most recent draft Bill was not persuaded of the case for these special arrangements and therefore proposed the removal of the authorisation scheme. I examined that, and I tried to respond to the criticism that was made of the Bill and improve the Bill. I thought that if there was a better and lighter way of meeting the same purpose we should use it. We, thus, withdrew the authorisation scheme and concluded that a better approach would be to provide for a defence.

The defence is a more focused and case-specific mechanism than the authorisation scheme contained in the draft Bill. An authorisation scheme needs to provide for a wider authorisation if it is to be workable in practice and confer the necessary operational flexibility. If I may say so, that is one of the fundamental defects with the authorisation scheme that has now crept into the Bill in a subsection of clause 10. The House of Lords accepted that there was a need to make special provision, but it argued that there was a greater need for better oversight of the conduct of the intelligence services and armed forces in respect of conduct that would otherwise constitute an offence. The other place also argued that the defence was cast too wide in that it included law enforcement agencies. I recognise the strength of the second argument about the breadth of the defence, and we have now narrowed the application of the provision down, in effect, to the intelligence agencies and the armed forces-and nobody else. I am grateful to Members of the other place for drawing our attention to that defect.

Mr. Garnier: Will the Secretary of State clarify whether the Government intend to leave clause 10 as it has come to us from the House of Lords or to seek to amend it in Committee?

Mr. Straw: As I am about to explain, the Government intend to seek to amend the clause, because it will create a hybrid and very uncertain set of authorisations. I hope that I can convince the hon. and learned Gentleman and the House that not only is it not necessary, but it is not desirable. I should say to him that when I examined it my starting point-my default position, as it were-was to see whether we could accommodate it. Why would that not be my position because, particularly at this stage of a Parliament, I am not picking fights unnecessarily?

Mr. Garnier: Oh yes you are!

Mr. Straw: No, no, I am not, and I am certainly not doing so on something as esoteric as this. However, I came to the view-I am clear about this-that this provision is both unnecessary and undesirable.

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The other place accepted the case for the defence clause, but what it did, not as an alternative, but as an addition, was decide to put in place a discretionary ministerial authorisation scheme, and that now forms subsections (6) and (14) of clause 10. What are the defects of those provisions? One defect is that they would sanction conduct covered by the offence at clause 6 of the Bill, which is derived from the OECD's convention on combating bribery of foreign public officials. The Bill as originally drafted did not allow for that possibility. We could put that defect right, but what cannot be put right is the ill-conceived hybrid arrangement, which seeks to combine an optional authorisation scheme with an existing defence. The arrangement is neither one thing nor the other, and thus creates uncertainty about its legal and practical effects and, in the process, undermines the purpose of clause 13.

I remember sitting in this House before I had responsibility for any of the intelligence agencies and sometimes thinking that I was being asked to take on trust undertakings being given in this place by Ministers who say that they know it all but that they cannot communicate what they know. Mostly we did take things on trust from distinguished members of the previous Administration such as Lord Hurd and Lord Howe, and rightly so. Some people have the idea that the intelligence agencies operate in highly regular circumstances-it is a highly regulated system-whereby they have the time to consider individual applications for actions out in the field and these can then be weighed in the balance and an authorisation sought for them prospectively. All that is true in respect of activities by the agencies that are covered by warrantry, which include interception of different kinds and intrusive surveillance. However, some of their actions are inevitably fast-moving-people must have authority at a point at which they are exercising sensible discretion on behalf of the state.

The previous authorisation scheme, which the Joint Committee did not like, was cast to take account of the necessary flexibility that is required by the agencies. It is paralleled by section 7 of the 1994 Act. This provision, however, is far too specific and would jam up the system. I remind the House that there is already intensive supervision of the work of the agencies. Each of the substantive Acts-the 1989, 1994 and 2000 Acts-provides for there to be commissioners who are retired senior members of the judiciary, typically and usually retired Court of Appeal judges, who scrutinise the various aspects of the agencies. Having been subject to their scrutiny, I can tell the House that that is not something that they take lightly. No sensible Secretary of State takes it lightly, and neither do the agencies. Of course, a lot of what they do cannot see the light of day, although they publish redacted reports, but it is extremely important.

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With the mechanisms for external accountability in place, in addition to a robust system of internal checks that are partly prompted by the external checks, there is then a powerful onus on the individuals concerned who are carrying out and authorising operations to demonstrate and be satisfied that the proposed action is both necessary and proportionate. Our view, which the Under-Secretary of State for Justice, my hon. Friend the Member for Watford (Claire Ward)-who has just disappeared from the Chamber-will be urging the Committee to accept, is that the defence, when combined with these existing oversight mechanisms, provides an appropriate level of accountability.

In providing a purely discretionary authorisation scheme, the Lords amendment to clause 10 at one level arguably adds nothing but its effect would be-I promise the House-to add confusion and uncertainty. However, through my hon. Friend the Under-Secretary, I shall consider whether we can provide further assurance to the House that there is effective oversight of the conduct of the intelligence services and armed forces that engages the clause 13 defence.

I hope that the House will accept what I have said. I also hope that it will accept the good advice of, for example, Transparency International. As a senior Minister in this Government I have responsibilities for getting a Bribery Bill on the statute book, but as a senior Minister-not least as one who has had responsibility for the various agencies over a nine year period-I also have a responsibility to ensure that those agencies can operate effectively and sensibly. I hope that Members of the House will not allow the best, in their view, to be made the enemy of the good. We cannot put on the statute book a Bill that, in dealing with one mischief-bribery-creates a worse mischief, undermining the effective, proportionate and lawful work of the agencies. Transparency International said that it believed that the issue about clauses 13 and 10

That is good advice.

The Bill will put in place a coherent, comprehensive framework of criminal law. It will make it abundantly clear that bribery has no place in this country and that it will not be tolerated in our commercial and other dealings with the rest of the world. Those are aims to which the whole House, I hope, can subscribe, and I hope that we can now get on and pass the Bill. I commend it to the House.

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