Session 2010-11
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Terrorist Asset-Freezing Etc Bill

Terrorist Asset-Freezing Etc. Bill [Lords]

The Committee consisted of the following Members:

Chairs: Mr Roger Gale  , Jim Sheridan 

Bagshawe, Ms Louise (Corby) (Con) 

Brake, Tom (Carshalton and Wallington) (LD) 

Brown, Lyn (West Ham) (Lab) 

Crockart, Mike (Edinburgh West) (LD) 

Gapes, Mike (Ilford South) (Lab/Co-op) 

Gardiner, Barry (Brent North) (Lab) 

Goodwill, Mr Robert (Scarborough and Whitby) (Con) 

Hanson, Mr David (Delyn) (Lab) 

Hoban, Mr Mark (Financial Secretary to the Treasury)  

Kelly, Chris (Dudley South) (Con) 

McCarthy, Kerry (Bristol East) (Lab) 

Mearns, Ian (Gateshead) (Lab) 

Mosley, Stephen (City of Chester) (Con) 

Sharma, Alok (Reading West) (Con) 

Simpson, David (Upper Bann) (DUP) 

Weatherley, Mike (Hove) (Con) 

White, Chris (Warwick and Leamington) (Con) 

Wicks, Malcolm (Croydon North) (Lab) 

Sarah Davies, James Rhys, Committee Clerks

† attended the Committee

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Public Bill Committee 

Tuesday 23 November 2010  

[Mr Roger Gale in the Chair] 

Terrorist Asset-Freezing etc. Bill [Lords]

10.30 am 

The Chair:  Good morning, ladies and gentlemen. Before we begin, I have a few preliminary announcements. 

Members of the Committee may remove their jackets if they wish to do so. Please ensure that mobile phones and other electronic devices are turned off. Chairmen tend not to take a kind view of phones ringing during proceedings. 

There is a money resolution in connection with the Bill, of which copies are available in the room. As a general rule, I and my fellow Chairman will not call starred amendments that have not been tabled with adequate notice. The required notice period in Public Bill Committees is now three working days; therefore, only those amendments tabled by the rise of the House last night will be selectable for debate on Thursday. The Committee will be asked in a moment to consider the programme motion on the amendment paper, on which debate is limited to half an hour. 

As I look around, I suspect that there may be hon. Members on both sides—certainly on one side—who have not served on a Bill Committee before. It is an arcane process. If you study the papers carefully, you will discover that the amendments are grouped. Only the first amendment will be moved by the person putting forward the amendment; all the others remain unmoved until we reach where they appear in the Bill, because amendments are grouped by subject and legal merit, not in sequence. That includes Government amendments, which may be debated. All the amendments are debated as a group, but they may or may not thereafter be moved at all. If they are moved, having been debated, they will be moved formally. I hope that is clear. 

If any hon. Members have any queries or do not understand the procedure, do not be frightened. I have been known to bite people’s heads off, but not for this purpose. Please rise on a point of order and straightforwardly ask the question. If you do not understand what is going on, I or, failing my knowledge, the Clerk will endeavour to explain it to you. 

We now proceed to the programme motion, after which we will take the reporting of written evidence motion. 




the Committee shall (in addition to its first meeting at 10.30 am on Tuesday 23 November) meet— 


at 4.00 pm on Tuesday 23 November; 


at 9.00 am and 1.00 pm on Thursday 25 November; 


the proceedings shall (so far as not previously concluded) be brought to a conclusion at 4.00 pm on Thursday 25 November.—(Mr Hoban.)  


That, subject to the discretion of the Chairman, any written evidence received by the Committee shall be reported to the House for publication.—(Mr Hoban.)  

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Written evidence to be reported to the House 

TA 01 Liberty and Justice 

TA 02 Equality and Human Rights Commission 

Clause 1 ordered to stand part of the Bill.  

Clause 2 

Treasury’s power to make final designation 

Tom Brake (Carshalton and Wallington) (LD):  I beg to move amendment 1, in clause 2, page 2, line 1, after ‘believe’, insert 

‘on the balance of probabilities’. 

Amendment 1 is the first of a small number of probing amendments that relate to the report of the Joint Committee on Human Rights, which carried out legislative scrutiny of the Bill. Any members of the Committee who want more in-depth knowledge about the amendments and their purpose should obtain a copy of the report, because it is very helpful. These probing amendments provide an opportunity for the Government to respond in detail to the concerns that were raised by the Joint Committee. 

Although the Joint Committee welcomed the fact that the Government were raising the legal threshold for an asset freeze from reasonable suspicion to reasonable belief, it still had concerns about the standard of proof that was to be used and whether that had been raised to the civil standard of balance of probabilities. In their response, the Government relied on the Court of Appeal’s interpretation of the phrase “reasonable belief” in the Anti-terrorism, Crime and Security Act 2001 in maintaining their view that the standard of proof did not need to be changed. The position now, therefore, is that a person’s assets can be frozen by the Treasury even if it is not satisfied of that person’s involvement in terrorism on the balance of probabilities. I hope that the Minister will use this opportunity to explain why the Government feel that that is appropriate. 

If the Government were so inclined, the amendment would be a simple way to redress the problem and ensure that the standard of proof relied on had to be the balance of probabilities. That would answer the concerns expressed in the Joint Committee’s report. I hope that the Minister will also explain why such a course of action is not appropriate. 

Mr David Hanson (Delyn) (Lab):  Good morning, Mr Gale. It is a pleasure to serve under your chairmanship.  

The official Opposition will not support the amendment, because we do not feel it is appropriate. It might be helpful if I explain to the Committee that, as we know from the debate on Second Reading, the Bill’s genesis lies in discussions that took place under the previous Labour Government. There is a relatively good element of cross-party support, certainly from the Government and the Opposition, for the Bill’s contents. 

The clause provides for the Treasury to make a designation on the basis of concern about someone’s involvement in terrorist financing, and it does so in relatively clear terms. Subsection (1)(a) refers to the reasonable belief 

“(i) that the person is or has been involved in terrorist activity, (ii) …is owned or controlled directly or indirectly by a person within sub-paragraph (i), or
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(iii) …is acting on behalf of…a person within sub-paragraph (i)”.

Subsection (2) gives what I believe are clear definitions of “involvement in terrorist activity”, including 

“the commission, preparation or instigation of acts of terrorism”. 

The Joint Committee on Human Rights has raised some concerns, which the Committee and the Minister will need to consider, but I think it reasonable to say that the standard of proof in the Bill as drafted is sufficient to deal with matters of such import, such that we have clarity about the purpose of the clause. We do not need to take the view of the hon. Gentleman and his hon. Friend the Member for Cambridge (Dr Huppert), as stated in their amendment. 

In clause 26, the Bill includes a right of appeal to a court on such issues. If people feel that the designations are too strict or if they are concerned about them, they can appeal. 

Despite the Joint Committee’s concerns, I think the Bill meets the test of protecting the public from the financing of terrorism. I speak not only as the Opposition spokesman, but as the Minister in the previous Government who had responsibility for counter-terrorism. I know that there are dangers from a range of organisations funding terrorist activity. Information will sometimes cross the desk of the Treasury or the Home Office that strongly indicates levels of proof substantial enough for action to be taken, but that should not necessarily be brought out in court immediately because of ongoing terrorist activity, or because of the need to monitor other activity or to ensure that the sources of the information are not disclosed. 

If the higher level of proof sought by the hon. Member for Carshalton and Wallington was used, there would be a danger of our undermining attempts to stop terrorist activities. The clause is about trying to ensure that we do not have 7/7s or 9/11s or terrorist funding in this country. Those who are concerned, if they are subject to clause 2, have the right of appeal under clause 26; they can argue their case in court, and often do so. I think the hon. Gentleman will find, as I did when signing control orders under the previous Government, that nobody ever appeals against them, because they do not want the information to come out. They do not want it tested in court, because they know that the designation has been made for valid and sound reasons. 

Tom Brake:  I hear what the right hon. Gentleman says, but does he agree that, if the Government accepted the amendment, the standard of proof that would apply would still be lower than required to charge a person with a criminal offence and, therefore, the powers could still be used in a preventive manner? 

Mr Hanson:  I may be slightly old-fashioned in these matters, but I do not believe the Treasury would take action under clause 2 unless it had sufficient evidence to secure a potential action, which was testable by appeal under clause 26. 

I am happy to give the Minister and the Treasury the benefit of the doubt in relation to clause 2. We would support the provision if I were sitting where the Minister sits now. I do not think that we should water down the provision on proof. If we do that, we increase the

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danger of terrorist funding being undertaken and of the Treasury and the Government not being able to take action against individuals who would fund terrorist activity and try to subvert the democratic processes that the hon. Gentleman, with his amendment, is trying to uphold. 

The Financial Secretary to the Treasury (Mr Mark Hoban):  It is a pleasure to serve under your chairmanship, Mr Gale. I am grateful to my hon. Friend the Member for Carshalton and Wallington for indicating that the amendment is probing. I shall set out why the Government believe that the test of reasonable belief is the appropriate one for the circumstances. 

Amendment 1 would change the threshold from that of reasonable belief to one where the Treasury would need to be satisfied on a balance of probabilities. As I emphasised on Second Reading, in order to fulfil our United Nations Security Council obligations and to meet our national security needs, the asset-freezing regime needs to be preventive—that is, it must be capable of being used at an early stage to disrupt and prevent terrorist acts. In our view, a threshold of a balance of probabilities would not enable us to act when action is needed. 

The balance of probabilities test is applied by the courts in the context of civil proceedings and requires one party to demonstrate to the court that it is more likely than not that a particular fact is true. If that test were applied to asset freezing, it would require the Treasury to be satisfied and to be able to demonstrate to a court that a person is more likely than not to be, or to have been, involved in terrorism. That sounds reasonable, but it is in fact a high burden, because the burden of proof would rest with the Treasury. It would mean, for example, that if the picture was unclear and an equally plausible argument could be made that an individual was not involved in terrorism, that the Treasury would not be able to impose an asset freeze. In our view, because of the serious threat posed by terrorism, in such cases, where a reasonable belief standard is met, the Treasury should be able to freeze assets on a preventive basis to protect the public. The alternative is to hold back until further evidence is accumulated, but that runs the risk of an individual being able to carry out a terrorist act without preventive action being taken. 

We need to be mindful that, as eminent judges such as Lord Justice Laws and Lord Rodger have remarked, the material available to the authorities about terrorist plots may often be fragmentary and incomplete, and the picture may not be clear for good reasons. That does not mean that the material available is wrong. It just reflects a number of real world facts about terrorism: that intelligence has to be gathered covertly; that terrorists go to considerable steps to disguise their activities; and that to protect the public, plots sometimes have to be disrupted at an early stage rather than allowed to run on further in order to accumulate more evidence. For those reasons, we believe that moving to a balance of probabilities test would have significant risks for our national security. 

10.45 am 

There is also an international dimension. A balance of probabilities test would also be out of line with international best practice. The Financial Action Task

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Force makes it clear in its guidance on terrorist asset freezing that a legal threshold of reasonable suspicion or reasonable belief should be used. We are not aware of any country that uses a balance of probabilities test to freeze terrorist assets in accordance with UN Security Council resolution 1373. For those reasons, as I set out on Second Reading, we remain convinced that a reasonable belief test is the right threshold for making a final designation. We believe that it strikes the right balance between protecting national security on the one hand and protecting civil liberties on the other. Let me be clear: that does not result in the Treasury making decisions where it thinks it more likely than not that a person is not involved in terrorism. The point is that the decision maker believes, from a careful assessment of what may well be a complicated intelligence picture, that a person is involved in terrorism. 

The threshold of reasonable belief for a decision is one used in many other contexts—for example, decisions about terrorism, such as under the Anti-Terrorism Crime and Security Act 2001 and under schedule 7 to the Counter-Terrorism Act 2008. The courts are then asked, on a review or appeal, to determine whether there are reasonable grounds for that belief. We believe that that is the right test here: it provides an assurance that a proper burden is placed on those seeking to impose a designation, but at the same time enables action to be taken to protect national security when needed. I hope my hon. Friend will withdraw the amendment. 

Mike Gapes (Ilford South) (Lab/Co-op):  I endorse the remarks made by the Minister and my right hon. Friend the Member for Delyn. In particular I draw attention to an interesting briefing that was sent to us by the organisations Liberty and Justice, which points out that amendments were made in the House of Lords following the judgment in January, which brought in the current wording in the Bill. Therefore, there has been a change. I would like to ask the hon. Member for Carshalton and Wallington, when he responds, to clarify his position. In the briefing from Justice and Liberty, they call for the removal of clause 2, to be replaced with something completely different. They argue that the Bill is 

“inconsistent with the coalition Government’s promise to ‘reverse the substantial erosion of civil liberties’ under the previous Government.” 

Given that both the Lib Dem and the Conservative parties are part of the coalition and the hon. Member for Carshalton and Wallington has said that the amendment is probing, I want to be clear whether the coalition position is probing, whether it is a pledge, or whether it is the position just expressed by the Minister. 

Tom Brake:  That may be a matter to which I or my hon. Friend the Member for Cambridge may want to return on Report. However, I am sure the hon. Gentleman will read carefully what the Minister had to say, particularly about the UK being out of line with best practice elsewhere. Unfortunately, it was all too often clear that the counter-terrorism legislation introduced by the previous Government was out of line with best practice in other countries, in that we adopted a position with which other countries felt much more uncomfortable. 

In response to the comment from the hon. Member for Ilford South, the coalition Government are at one on the need to review our civil liberties legislation. That

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is why we are in the process of carrying out a counter-terrorism review, which I understand should be reporting early next month. I am confident that that will start to roll back some of the more draconian measures that his Government introduced. The coalition Government’s position on terrorist asset freezing will be the one we arrive at in Committee, at the end of our proceedings and the progress of this Bill through the House of Commons. The hon. Member for Ilford South may laugh, but I am afraid he is having to accommodate himself to something that he will not have experienced in the last 65 years—because there has not been a coalition Government in 65 years—but I am sure he will get used to that process, if he is able to adapt, in the next few months. 

I have listened carefully to what the Minister had to say. He raised some pertinent points and I beg to ask leave to withdraw the amendment. 

Amendment, by leave, withdrawn.  

Clause 2 ordered to stand part of the Bill.  

Clause 3 

Notification of final designation 

Tom Brake:  I beg to move amendment 2, in clause 3, page 2, line 27, at end insert— 

‘(aa) explain, as fully as possible consistent with the public interest in non-disclosure, the reasons why they are satisfied that the conditions in section 2(1) are satisfied.’.

I rise again to debate an amendment that the Joint Committee on Human Rights is keen should be adopted by the Government. Again, it is a probing amendment, to which I hope the Minister will respond. It is on the question of whether the Treasury should be including in the written notices of designation under clause 3(1)(a) as much information about the reasons for designation as it is possible to give 

“consistent with the public interest in non-disclosure”. 

I underline that point. 

In response to the Joint Committee, the Government said that it was not necessary to introduce an amendment of this nature 

“because the basic administrative law principle of giving reasons for decisions of this sort applies, regardless of whether a duty is specified in the legislation or not.” 

However, the Committee, with some justification in relation to the control order regime, pointed out that, when evidence is based on material that cannot be put into the public domain, it is indeed very difficult to get reasons out into the open. I totally accept that there could be a large number of reasons that need to be kept closed. 

However, there may also be occasions when the reasons could be put into the public domain, but in relation to control orders, that does not happen regularly. Therefore, the proposed amendment from the Joint Committee on Human Rights would ensure that, fully consistent with the public interest in non-disclosure, reasons were made public when possible. I will listen carefully to what the Minister has to say. I hope that he will be able to address the concerns raised by the Joint Committee and give me and it some satisfaction that the “basic administrative law principle” will ensure that reasons for decisions are made available when possible. 

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Mr Hanson:  I shall not detain the Committee long, either. We generally support the clause. Will the Minister inform us about the ongoing review that the Government are undertaking in relation to control orders? It was mentioned by the Joint Committee on Human Rights as one of the reasons to support the amendment tabled by the hon. Member for Carshalton and Wallington. The Minister will know that we have strong views on control orders, and indeed the Government’s review. I had oversight of control orders as a Minister in the previous Government, and I never once supported one that did not have information supplied to support it. If there is to be a review of control orders and a change in the regime, the Minister needs to inform the Committee now so that we can take into account the amendment and reflect on it. 

On Second Reading, the Minister said that the Bill is a stand-alone Bill, and that the review by the noble Lord Macdonald will not impact on the wider terrorism review. But the hon. Gentleman has raised the issue of control orders in relation to this particular aspect. If the Minister argues against the amendment, he needs to give a view on current Government thinking, because there has been debate over the weekend about the validity of control orders, and there is potentially some tension between both sides of the coalition on that issue. It is important that we hear from the Government whether the principles, which might be changed—they are at least being considered by the Government under the wider review of terrorism legislation—would have an impact on clause 3. I support the clause as drafted, and I would recommend that my hon. and right hon. Friends do not support the amendment. It is important that the Minister gives a wider view than the amendments, given the points that the hon. Member for Carshalton and Wallington has raised. 

Mr Hoban:  Let me make some broader points about the amendment and return to the comparison between this and control orders, and address the point that the right hon. Member for Delyn has made. As the hon. Member for Carshalton and Wallington said, the amendment reflects a suggestion made by the Joint Committee on Human Rights in its report on 12 November. I will give some background on that. 

On 13 October, the Chair of the Joint Committee wrote to Lord Sassoon, asking whether the Government would write on to the face of the Bill an express requirement on the Treasury to provide reasons for a designation, subject to the public interest requirements for non-disclosure. I understand that that proposal was born from a concern to ensure that individuals were sufficiently informed of the reasons for their designation at the point where their assets were frozen, in order for them to amount an effective challenge. The Government declined to include such an obligation on the grounds that the JCHR’s proposal was intended only to ensure that the Treasury complies with the basic administrative principle of giving reasons for decisions of this sort and that writing such an obligation on to the face of the Bill was unnecessary, because administrative law principles apply, regardless of whether that duty is specified in legislation. 

The JCHR considered my noble Friend’s response, but maintained in its report on 12 November that an obligation should be written into the Bill. The reason was that: 

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“A mandatory statement of reasons in the written notice of designation would help to ensure that the new right of appeal is an effective remedy.” 

We believe that that conflates two separate issues. Disclosure as part of court process, in a challenge to a designation, is a separate issue to disclosure at the time of designation. We do not think that there is a direct linkage between the provision of reasons for a designation at the time that it is imposed, and the effectiveness of a subsequent appeal against that designation. That is because, where a person appeals against a designation, the Government will, in any event, be required to make such disclosure as is necessary in the view of the court to meet the requirement for a fair trial under article 6 of the European convention on human rights. That may include a disclosure which is damaging to national security, but which is required under article 6. Including an express provision to require the disclosure of reasons at the time of designation in the Bill will not alter that obligation or ensure that the right of appeal is any more effective as a remedy. 

The Government believe that it is right that reasons should be provided for imposing an asset freeze on someone, subject to public interest requirements. That is consistent with good administrative law principles, and as the Exchequer Secretary explained on Second Reading, it is already the Government’s policy to do so. There will, of course, be situations where the Government cannot divulge the full details of the case for a person’s designation. For example, where people have been arrested or charged with terrorism offences, disclosing information could have a detrimental impact on prosecuting such people. Where sensitive intelligence has been relied on for a decision, it may not be possible to disclose the reasons without damaging national security—for example, by compromising our intelligence sources or methods. None the less, subject to those considerations, the Treasury will continue to meet the requirements of administrative law and provide reasons for a person’s designation to the extent that it is consistent with the public interest. 

Let me deal with the point from my hon. Friend the Member for Carshalton and Wallington, which revolves around the distinction between control orders and asset freezing. He referred to the JCHR’s final report, where one of the arguments for maintaining that the obligation should be written on to the face of the Bill was that the reasons for imposing a designation were not forthcoming, in practice, under the control order regime. Our view is that there are fundamental differences between asset freezes and control orders, including their respective impacts on human rights. The first difference is that there is a standing United Nations obligation to freeze terrorist assets and an agreed international framework for implementing it. That is not the case for control orders. Secondly, in practice, control orders are used against individuals in the UK who cannot be prosecuted or deported. The majority of asset freezes that have been imposed on UK persons have involved individuals who have been charged with, or convicted of, a terrorist offence. Asset freezing is also used against terrorist individuals and organisations based overseas. 

11 am 

Mike Gapes:  Throughout, when the Bill refers to persons, I take that to mean persons in the UK. However, as Minister is aware, we have several overseas territories

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and a number of Crown dependencies. Will he clarify how the Bill relates to the Turks and Caicos Islands, Bermuda, the Cayman Islands, Jersey, Guernsey and other parts of the world that are under our jurisdiction, but not in the UK? 

Mr Hoban:  The hon. Gentleman makes an important point. I wish to highlight the fact that, in respect of assets frozen under the regime or assets based in the UK, individuals may or may not be based in the UK. We are trying to freeze the assets that are located here in the UK, which is the basis of the Bill. 

Mike Gapes:  The US Government sent several people from Guantanamo Bay to Bermuda without the knowledge of the British Government. There are therefore people who could be terrorists or alleged terrorists and, as we know, some strange financial dealings have gone on in certain British overseas territories. In fact, the UN special committee has examined that, as has the G20. I am interested in not only people based in the UK who may have assets somewhere else, but individuals in those overseas territories. 

Mr Hoban:  The hon. Gentleman will recognise that the Bill has been drafted because we have an international obligation under UN Security Council resolution 1373 to implement terrorist asset-freezing measures. That has been agreed at an international level and will clearly apply in those territories. 

I was dealing with the distinction between asset freezing and control orders, and the fact that control orders can have a more significant impact on human rights than asset freezes as they can impose restrictions on movement, association and communication. 

Malcolm Wicks (Croydon North) (Lab):  The issue raised by my hon. Friend the Member for Ilford South is one that I wanted to raise, albeit under clause 54 where I think it belongs. Will the Minister and his team take my comments as giving them notice that, rather than just nod through clause 54 in the usual way that we could do, the hon. Gentleman might talk at slightly greater length about the Channel Islands, the Isle of Man and other territories. That is an important matter as those countries would not be a bad place for terrorists to hide their assets if the law enabled them to do so. 

Mr Hoban:  No, indeed, and the right hon. Gentleman is right to draw our attention to clause 54, which extends the powers to the Channel Islands, the Isle of Man and British overseas territories, so a regime is in place that affects assets not only here in the UK, but in Crown territories and overseas dependencies. 

Malcolm Wicks:  I suppose that we would be interested in what talks the Government have had or plan to have with representatives of the Channel Islands and other territories. In other words, the clause is not just a technical measure. We would want some evidence when we reach the clause that the Government are fully aware of the risks. 

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The Chair:  Order. We are either going to discuss the matter now—I do not mind if we do—or we shall discuss it when we come to clause 54. We shall certainly not do both. 

Mr Hoban:  Thank you, Mr Gale. I am just trying to wrap the matter up now rather than in a clause stand part debate. I hope that you are content with that. You did say that that was one of the options. 

We expect all overseas territories and places such as the Crown dependencies to adhere to the highest international standards when it comes to financial transactions, whether money laundering, disclosure and so on. We sent out that very clear signal in our discussions with those territories and they appreciate that that is exactly what we want them to do. International mechanisms are in place to ensure that they do so. 

The Chair:  I just want to be absolutely clear that members of the Committee are satisfied because I shall tell Mr Sheridan that we have debated the issue and it will not come up again under clause 54. If hon. Members wish to raise anything further on the subject, will they please do so now? 

Mike Gapes:  I want the Minister to be clear. We are not just talking about assets that are held in other jurisdictions by United Kingdom citizens. We are also talking about individuals resident in, or citizens of, other jurisdictions, such as overseas territories, Jersey, Guernsey and other Crown dependencies, who will also be subject to the regulations. 

Mr Hoban:  The hon. Gentleman is rather narrow in his ambition for the Bill. It freezes assets that belong to people who are either resident in the UK and those territories or resident outside the UK and those territories. It is a very comprehensive regime focused on assets that could be used to engage in terrorist acts, regardless of the residence of the individuals whose assets they are, but those assets must within the UK and those territories. I hope that I have clarified the point. 

Malcolm Wicks:  I was rather hoping that by this exchange we would have politely put the Minister on notice that some of us would like him to give us a fuller exposition when we debate clause 54, so that we can understand better what is meant by providing a power to make an order. I understand what that means, but will such orders be made? In other words, we should have a fuller debate about the matter in the right place, which is under clause 54. 

The Chair:  Order. I have made it absolutely plain that the matter can be debated once, but it cannot be debated twice. We are beginning to become a little bit pregnant, and the Committee cannot do that. Either we debate the matter under clause 54 or we debate the matter now, which the hon. Member for Ilford South is happy to do. I do not want to do it twice. 

Mr Hoban:  I am rather caught. It is our intention to make sure that the orders are made. It is important that they are. I know that overseas territories want to make sure that they comply with UK law. They want to

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comply with UN standards in the same way that they comply with other international standards. It should not be a matter of debate whether there is any choice, either in the UK making the orders or the Crown territories actually complying with them and wishing to comply with them. A good regime will be in place to tackle assets held in offshore territories. It is important that hon. Members are reassured about that, but such a measure will also demonstrate that the regime that we want to introduce is broadly based and not narrowly focused purely on the UK. 

The Chair:  To put this to bed, I have no power to tell him, but I invite the Minister to write to the hon. Member for Ilford South and the right hon. Member for Croydon North if there are further queries on the subject because we have covered the subject, and I do not want to deal with it again under clause 54. Let us now move back to the motion under discussion. 

Mr Hoban:  Thank you very much, Mr Gale. Before we had a Cook’s tour of overseas territories, we were talking about the distinction between control orders and asset freezing, and the difference in nature that stemmed in part from the JCHR’s comments. It is also fair to say that we do not accept the JCHR’s view on the position of the control order proceedings. A control order always explains that the Government suspect that an individual is, or has been, involved in terrorist-related activity and that a control order is necessary to protect the public from the risk of terrorism. After serving a control order, the individual is always provided with the open case against him. The starting point for that has been that the open case must contain as much material as possible, subject only to legitimate public interest and concerns. 

Mr Hanson:  If the Government propose any changes to the control order regime, the key point for me is whether the Minister anticipates reflecting those changes in the clause or the Bill in the future? If he does not, I am content. If he does, he needs to explain that to the Committee now. 

Mr Hoban:  All in good time. I want to respond to the concerns of my hon. Friend the Member for Carshalton and Wallington about what was expressed by the JCHR on the application of the process of relating control orders to asset freezing. The starting point for control orders is that the open case must contain as much information as possible, subject only to legitimate public interest and concerns. Reasons will not be given in the control order context if there is legitimate public interest in refraining from disclosing information that might jeopardise national security. The JCHR has acknowledged that in such a situation it is acceptable to withhold giving reasons. Special advocates can and do make submissions that further information should be disclosed to the individual. 

Subject to public interest and article 6 considerations, court rules that underlie control order proceedings also require disclosure of all relevant material, which, effectively, goes beyond providing reasons to providing underlying material. I do not believe, therefore, that the JCHR’s concerns about control orders are correct. There is also a distinction between the impact of control orders and the impact of asset-freezing orders, which we should bear in mind. 

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As the right hon. Member for Delyn has said, the Macdonald review of control orders is taking place and I do not want to speculate on its possible conclusions, which will be announced in due course before the end of the year. It is worth reminding ourselves that there is a particular reason why the Bill needs to be on the statute book by the end of December—the previous legislation was struck down by the Supreme Court, and the previous Government entered into a commitment, which we supported, to introduce new legislation by the end of this year. It is important, therefore, to proceed on that basis, await any further comments on asset freezing from Lord Macdonald, and leave such discussion to a later point. 

Tom Brake:  I thank the Minister for setting out in detail the differences between control orders and asset freezes. I am sure that he acknowledges that we need to be careful not to repeat, in this legislation, some of the problems that have arisen with control orders, which are the subject of the current review. 

The Minister has said that reasons should be given if there is no public interest reason for non-disclosure. Once the Bill has been enacted, I am sure that he will want to keep a watching brief on the extent to which reasons are being given in relation to designations. On that basis, I beg to ask leave to withdraw the amendment. 

Amendment, by leave, withdrawn.  

Mr Hanson:  I beg to move amendment 42, in clause 3, page 2, line 28, leave out ‘take steps to’. 

The Chair:  With this it will be convenient to discuss the following: 

Amendment 44, in clause 3, page 2, line 32, leave out ‘the Treasury believe that’. 

Amendment 45, in clause 3, page 2, line 40, leave out subsection (4). 

Amendment 46, in clause 5, page 3, line 22, at end insert ‘(c) publicise the revocation.’. 

Amendment 43, in clause 7, page 4, line 4, leave out ‘take steps to’. 

Amendment 47, in clause 7, page 4, line 15, leave out sub-paragraph (iii). 

Amendment 49, in clause 8, page 4, line 30, at end insert ‘(c) publicise the expiration.’. 

Before I invite the right hon. Gentleman to discuss the amendment, I return to the remarks that I made at the beginning of the sitting. The amendment paper shows hon. Members that amendments 42, 44 and 45 relate to clause 3; amendment 46 relates to clause 5; amendments 43 and 47 relate to clause 7; and amendment 49 relates to clause 8. If Mr Hanson wanted to move amendment 46, he would indicate that to the Chair, and it would be moved formally when we reached clause 5, but not now. That is the process to which we endeavour to adhere. 

Mr Hanson:  I am grateful, Mr Gale, for your clarification. Our discussions on the amendments will range over several clauses. The amendments are designed to be generally supportive of the Government’s approach. I have tried to include in them certain points on which we seek clarification, and a couple of key points on which we aim to test the Government—in a supportive way, rather than a confrontational way. 

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Amendments 42 and 43 would delete the words “take steps to” in relation to the notification of final designation. Under clause 3(1)(b), the Treasury must 

“take steps to publicise the designation.” 

Deleting “take steps to” firms up the publicising. I have suggested the deletion for two reasons: first, the Minister might provide some clarification about what “take steps to” means; and, secondly, I am interested to know what he means by “publicise the designation.” Although the previous Government drafted the legislation in broad terms, there may be differences of interpretation with regard to what “publicise the designation” means. 

Through the amendment, we seek clarity from the Minister as to what steps he intends to take to publicise the designation. If I am honest, the words “take steps to” water down the commitment to “publicise the designation.” I cannot see why the Minister does not simply say that he wants to publicise the designation and indicate how he would do that. That would result in much firmer wording in the Bill. I seek clarification on what “publicise the designation” means. 

11.15 am 

Amendment 44 would remove the words “the Treasury believe” in clause 3(3)(a). That subsection is about whether the Treasury can take action if the designated person is an individual under the age of 18. The current phraseology is: 

“the Treasury believe that the designated person is an individual under the age of 18”. 

By removing the words “the Treasury believe”, we are trying to firm up the provision and test the Minister on what it means. If the amendment were accepted, the condition would be that the designated individual was under 18. I accept that there could be a range of reasons why the Treasury would not know whether someone was over 18, but the clause currently has an open phraseology. “The Treasury believe” means that the Treasury believes, but not that the person is—or is not—over the age of 18. 

What I am really looking at is what standard of proof the Minister will exercise with regard to what “the Treasury believe”. I would be interested to know whether, once the Bill is enacted, “the Treasury believe” will be sufficient, if a person tests that wording in court. “The Treasury believe”—unless the Minister outlines on what basis the Treasury believes it—might open a range of discussions in any future court case as to whether that was suitable for our legislation. I am trying to be helpful to the Minister, because what he says today could, if the words stand in the Bill, be used in a court case. If the amendment is not accepted, it would be helpful for interpretation downstream if the Minister gave an outline. It is important that we know what the Treasury believes when it determines whether a designated person is under 18, and how it assesses that fact. It is, if I can put it in his terms, a probing amendment for the Minister to respond to. 

Amendment 45 would delete clause 3(4). Not that I disagree with 3(4); the amendment is simply a way for me to test the Minister on what it means. Clause 3(4) states: 

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“If one or more of those conditions is met, the Treasury must inform only such persons as they consider appropriate.” 

To test that, I want the Minister to tell the Committee what the circumstances are, and whom he considers it appropriate to inform. I remind the Committee that the Bill states that where a final designation is made, the Treasury must 

“give written notice of the designation to the designated person” 


“take steps to publicise the designation”— 

that is, unless the person is under 18 or the Treasury believes that the disclosure of the designation should be restricted in the interests of national security, for the prevention or detection of crime, or in the interests of justice. If one of those conditions is met, the Treasury must inform only such persons as it considers appropriate. Who, in broad terms, would the Treasury consider informing? Whom does it consider appropriate? Will the Minister give some clarity on that, simply so that we know the intention behind clause 3(4) when the Committee considers it? 

Amendment 46 is on a more substantial issue than the three initial probing amendments. As I have said, under clause 3(1)(b), the Treasury must 

“take steps to publicise the designation.” 

Under the Bill, if an individual is found to be involved in terrorist activity—if they are involved in commissioning, preparing or instigating acts of terrorism, or in facilitating the commission, preparation or instigation of such acts, or are acting on behalf of somebody who is doing those things—that is, if the conditions of clause 2 are met, the individual is designated. Under clause 3, the Treasury must then take steps to publicise the designation. Under clause 5, which we will come to in substantial detail later, the Treasury must, if it revokes the final designation, give written notice to the designated person and 

“take reasonable steps to bring the variation or revocation to the attention of the persons informed of the designation.” 

What clause 5 does not do is mirror clause 3—that is, require steps to be taken to publicise the revocation. There is an inconsistency there. 

Under clause 3, the Treasury tells the person that they are designated. It writes to let people who are interested in that designation know of it, such as banks and others, and it publicises the designation. It might well put it on the website; it might put out a press release; there might be a press notice on the Treasury list; and it might do other things that the Minister may explain in a moment. Under clause 5, when a final designation is revoked, the Treasury writes to the individual and interested parties, but it does not publicise it. Someone’s reputation could be fairly—or unfairly—well trashed under clause 3. When the revocation takes place, that information is not publicised more widely. That is an inconsistency that the Minister might want to consider, today or at a later stage. He might at least explain to the Committee why that inconsistency occurs. We could have a situation where people designated under a freezing order are unable to have their name cleared in a manner that reflects the way in which the information was put into the public domain under clause 3. 

Amendment 49 effectively recycles those arguments under clause 8. I have used a slightly different wording, but the principle is there. What I am interested in hearing from the Minister is the principle; why can we

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publicise the change made under clause 3, but not the changes made under clauses 5 or 8? I welcome the Minister’s views on those points, and will reflect on his comments before deciding whether to discuss the matter further. 

Tom Brake:  On amendments 42 and 46, I too will listen carefully to the Minister’s response. With regard to amendment 42, I assume that 

“take steps to publicise the designation” 

means “publicise the designation”, so removing the words would be a simplification of the intention. As for the contrast between publicising the designation and its opposite, the revocation, there is a difference. The measures provide for general publicity about the designation, whereas the measures relating to revoking the designation seem very specific, in relation to the people being informed. That may be my misunderstanding of what is intended. I hope that the Minister will be able to clarify those two points. 

Mr Hoban:  Under clauses 3 and 7, the Treasury is required to provide written notification to a person of a final or interim designation made in respect of them under clauses 2 and 6 respectively. Clauses 3(1) and 7(1) require the Treasury to take steps to publicise the final or interim designation. Except where one of a number of conditions applies, the obligation is to publicise the designation generally. Where one of the exceptions applies, the obligation is to tell such persons as the Treasury thinks appropriate. The exceptions relate to minors, or to where disclosure would be contrary to national security, the prevention and detection of serious crime or the interests of justice. Those exemptions are necessary where, for example, a general, rather than a targeted, enforcement of an asset freeze might be detrimental to an intelligence operation. 

Amendments 42 and 43 would omit the words “take steps to” from clauses 3(1) and 7(1) and would, therefore, remove any element of discretion that the Treasury might have in identifying by which methods and to what extent a designation is publicised. The amendments are unnecessary. The Treasury is obliged to publicise a designation; how it does so is a matter of judgment. The discretion provided by the words “take steps to” does not qualify the obligation, but it makes it clear that the Treasury has the scope to decide on the best method of publishing a designation, whether that is by putting it on the Treasury website or by an alternative method. That would not be the case if the words were omitted. 

The current process for publicising designations generally is for the Treasury to issue notices on its website. It also makes available on the website the names and other identifiers of designated persons, such as their date of birth and their general location, where known, in a consolidated list of those effectively subject to financial sanctions in the UK. The Treasury also provides a free service through which subscribers can receive e-mail notification whenever a notice is added to the website or the list of designated persons is updated. The existence of the website is widely publicised across the financial sector via the relevant trade bodies. Most banks and building societies and many other financial organisations subscribe and receive updates. 

The automatic publication of designations on the website, unless one of the conditions in clauses 3(3) or 7(3) is met, is the most efficient and effective means

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of achieving the appropriate level of awareness of, and compliance with, the asset freeze. However, the discretion provided for by the words “take steps to” is appropriate, as it enables the Treasury to decide on the most effective method and level of publication required to inform the financial sector and other parties of their asset-freezing obligations, thus limiting the risks of the prohibitions in the Bill being unwittingly breached and the risks of funds being diverted for terrorist purposes. On the back of that clarification about the methodology and the reasons why we need that discretion, I hope that the right hon. Member for Delyn will withdraw those amendments. 

Amendments 44 and 45 relate to conditions in clauses 3(3) and 7(3) that set out the circumstances under which a designation would not be publicised generally. Amendment 44 would replace the condition that the Treasury “believe” that a designated person is under 18 with the requirement that it is an established fact that that person is under 18. That would bring into question the Treasury’s discretion to use the available evidence in assessing whether a designated person is under 18 when established facts are not available. The amendment might limit the Treasury’s ability to restrict the publication of the designation of a minor where the information available as to age is inconclusive, and where, although it may believe that the person is under 18, it cannot establish that as a fact. 

If the right hon. Gentleman reflects on the nature of the information available to the Treasury when it makes the designations, he will accept that such information is sometimes incomplete. Fragments of information may suggest that people are under 18, but the Treasury might not have their birth certificates. The evidence available to determine whether they are under 18 is not always as clear as it could be. The Treasury would like to have the discretion to decide, on the basis of what evidence it has, whether they are under 18, so that it can exempt them under clauses 3(3) and 7(3). 

As for Amendment 45, I draw the Committee’s attention to clause 3(1), which states that 

“Where the Treasury make a final designation…they must…take steps to publicise the designation.” 

That is qualified by subsection (4), which requires that 

“If one or more of those conditions is met, the Treasury must inform only such persons as they consider appropriate.” 

The amendment would remove that subsection and, therefore, the qualification on publication. We will resist the amendment because where one of the conditions in subsection (3) is satisfied, it is right that it is made clear that the designation will be publicised only to those whom the Treasury consider it appropriate to notify. That will ensure that the Treasury can, for example, balance the requirements of the wider interests of national security, which might be damaged by the wider publication of an asset freeze, against the particular requirement to ensure the effectiveness of the asset freeze, which can be realised by targeted notification. 

11.30 am 

Amendments 46 and 49 would include a requirement, in clauses 5 and 8 respectively, that where a final designation is revoked or an interim order expires, the Treasury must publicise the revocation and the expiration. The amendments are unnecessary because the activity that

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hon. Members want to ensure the Treasury undertakes is already catered for in the existing wording. The Treasury is required, under clauses 5(2)(b) and 8(2)(b), to take reasonable steps to bring both the variation and the revocation of the final designation, or the expiry of an interim designation, to the attention of the person who is informed of the designation. That means that where a designation has been publicised generally, its variation, revocation or expiration will be publicised generally, too. The Treasury publicises generally by issuing notices on its website. Subscribers will receive an e-mail notification from the Treasury to inform them that such a notice has been published, in the same way as they are informed when a designation notice is published. 

Mr Hanson:  I seek balance: whatever steps are taken under clause 3(1)(b) must be balanced under clause 5(2)(a) or (b). I seek a similar level of disclosure under both clauses, so that no one is disadvantaged by the fact that there is wide publicity under clause 3, but less publicity when the notice is revoked under clause 5. If the Minister can reassure me, I shall be content. 

Mr Hoban:  I believe I can. Where a designation has been publicised generally, variation, revocation and expiration will be publicised generally, too. That will involve website publication, and the restricted access website is also available to financial institutions to enable them to access such information. There is symmetry in the publication of the original notice and in what happens when that expires, is revoked or is varied. I hope that provides the right hon. Gentleman with the reassurance that he needs. 

Tom Brake:  Presumably, there is also a reciprocal arrangement in relation to the e-alerts to which the Minister refers, when banks and building societies receive notice about someone who is under an order. When such an order is revoked, they will, presumably, receive a similar notice through that e-system. 

Mr Hoban:  Yes, indeed. Most financial institutions have access to a specific website on which that information will be published, so it works in both directions. 

On amendment 47— 

Mr Hanson:  I did not speak to that one. 

Mr Hoban:  I shall try to put the right hon. Gentleman out of his—I will not say misery, because he is not that sort of chap. I shall try to give him the reassurance that he might have been seeking, had he spoken to that amendment. 

Mr Hanson:  Perhaps I can speak to the amendment in an intervention, Mr Gale. We tabled that probing amendment only to ensure that we get some context about what the words “in the interests of justice” mean. I should be grateful if the Minister informed the Committee of his interpretation of that phrase, so that we have clarity in our consideration of subsequent provisions. 

Mr Hoban:  What is remarkable is that the telepathic skills of Ministers and their officials would have enabled me to respond to that concern even if the right hon. Gentleman had not intervened. As he rightly points out, under clause 7(3) an interim designation can be made on a restricted circulation basis and should not be

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published generally if the Treasury considers that restricted publication is in the interests of justice. In that case, where a designation might prejudice justice—for example, where an individual is going on trial—the Treasury will seek the advice of the Crown Prosecution Service to ensure that designation would not impact on the interests of justice. The CPS would contribute to any decision to publicise a designation generally, to publicise it on a restricted basis, or even not to designate at all. 

The Treasury believes that the amendment, if made, would limit the asset-freezing options available to it in cases where publicising a designation might not be in the interests of justice and would make certain designations impossible to enforce and implement. I hope that I have addressed the right hon. Gentleman’s concerns. 

Mr Hanson:  All the amendments in the group were, in essence, probing. It is helpful that the Minister has put on record his interpretation of the proposed legislation. I want him to reflect—perhaps outside the Committee—on amendments 46 and 49, which deal with revocation. Will he consider whether the interpretation he set out in his response to the amendments is sufficiently tight to ensure that, in the interests of justice, sufficient emphasis is given to publicising the revocation of designation? We are talking about ministerial responsibilities—not only his, but those of future Ministers, five, six, seven, eight or 10 years down the line. Has sufficient clarity been given so that there is a balance between the publication and information given at designation and the publication and information given at revocation? 

I want the Minister to reflect on that question. If he is content, however, I beg to ask leave to withdraw the amendment. 

Amendment, by leave, withdrawn.  

Clause 3 ordered to stand part of the Bill.  

The Chair:  Hon. Members will notice that there is now a run of clauses to which amendments have not been tabled. In fact, amendments have not been tabled to a significant number of clauses. A clause stand part debate gives any Member the opportunity on a clause to which no amendment has been tabled—or, indeed, to which amendments have been tabled—to raise any issue that has not already been debated. It is my custom to read out the numbers of the clauses, and if any Member wishes to raise a particular issue on a particular clause, they should indicate that, please; otherwise, I shall deal with the clauses en bloc and move on to the next amendment. 

Clauses 4 to 6 ordered to stand part of the Bill.  

Clause 7 

Notification of interim designation 

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

Mr Hanson:  The clause states that where Treasury makes an interim designation, it must 

“give written notice…and…take steps to publicise the designation”. 

It must also decide whether the conditions that we have discussed are met, and then subsection (4) provides that 

“If one or more of those conditions is met, the Treasury must inform only such persons as they consider appropriate.” 

Does the Treasury make any formal record at some point of which persons are notified? Is there any subsequent

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information? For example, could the Freedom of Information Act 2000 be used? Is there any subsequent publication of which individuals were informed by the Treasury? 

It would be helpful if, at some point before the Bill completes its passage, the Minister gave some thought to the question at what stage, if ever, the public or a wider audience are told about who is subject the conditions in clause 7 and other provisions. I ask that because, at some point, somebody might make a freedom of information request or journalist might be interested in who has been told about the interim designation. The clause is unclear on how, where and at what stage that information becomes public in the wider sense, if ever. 

I would welcome clarification from the Minister, particularly on the arrangements on cessation of an order. In general terms, when the order has ceased or is revoked, what information is put into the public domain? What information could be accessed or requested to be put into the public domain? Several parties—not least the designated person, journalists and/or others—may be interested. Clarity on those questions would be of great help. I hope that I have given the Minister sufficient time to gather a response. 

Mr Hoban:  Indeed, the right hon. Gentleman has, with immaculate timing. 

The first thing to say is that, when an institution has been informed explicitly of a designation, it would be advised of revocation, expiration or variation. There is symmetry in that. Of course—the right hon. Gentleman would expect nothing less—the Treasury has a record of the people whom it has notified of a designation, and that record is maintained. That information is not automatically put in the public domain and he will appreciate why that is the case. I shall write to him about whether the information is subject to a request under the Freedom of Information Act. 

Mr Hanson:  I am grateful to the Minister. I am particularly interested in subsection (4), which refers to 

“such persons as they consider appropriate”. 

I am looking at the measure from the perspective of someone who is not the designated person. That person, or a journalist, or a third party might want to find out whom the Treasury considered appropriate, but at the moment, there is no mechanism for that information to be discovered. I am keen for us to have clarity now, as we consider the Bill, about what information will go into the public domain, because that can have a material impact on a range of issues. 

The Treasury might inform people about the designation whom the designated person does not want to be aware of the information, such as people who hold grudges against that individual. The Minister needs to be aware of a range of complex issues that might result from a designation. I am grateful for his willingness to respond in writing on how much of the information arising not only in connection with clause 7 but the Bill as a whole will end up in the public domain, at what stage and in what form, so that we have clarity about the freedom of information aspects. We want to know exactly what the Bill will mean in terms of information given subsequent to designations being made, and to designations being revoked or ceasing. 

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The Chair:  The Minister has already said that he intends to write to the right hon. Gentleman. 

Question put and agreed to.  

Clause 7 accordingly ordered to stand part of the Bill.  

Clause 8 

Duration of interim designation 

Mr Hanson:  I beg to move amendment 48, in clause 8, page 4, line 23, leave out ‘30’ and insert ‘28’. 

Again, this a probing amendment. The Minister and the Committee will know that, following concerns expressed during the initial consideration of the Bill, it was proposed to put in place an interim designation, so that the final designation would not necessarily be made immediately. Under the clause, an interim designation should be for 

“the period of 30 days beginning with the date on which it was made”. 

The amendment would replace 30 days with 28 days. 

Our reason for tabling the amendment is to ensure consistency across Government. I accept that the Macdonald review is considering the period of detention without charge, which is currently set at 28 days, but I want to ensure consistency. I accept that the regime for detention without charge is different from the terrorist asset-freezing regime, but it is incumbent on the Minister to explain why 30 days was chosen when 28 days is the norm in other areas. There are differences between the regimes, but the purpose of the amendment is to test the Minister on the validity of 30 days. 

11.45 am 

Given that we are dealing with terrorist legislation across the board, what would be the final norm of a period for investigation—which is essentially what we are talking about—pending determination of a final designation, consistent with other time scales across Government? It seems that the period of 30 days was plucked with good reasons but randomly, given the differences from other regimes. I am asking the Minister to justify 30 days and consider whether consistency across regimes would be appropriate in this as in other Bills, subject to whatever the Macdonald review determines for a period of detention without charge. 

Mr Hoban:  The right hon. Gentleman’s amendment is interesting, in that it probes what the right number of days should be. There was debate on the matter in the other place on 6 October, when one noble Lord suggested a range of days: 45, 14, 31, 29 or 15. There is no science to that. 

It should be borne in mind that interim designations will be used only where there is an operational need for them; the requirement for the freeze to be necessary for public protection ensures that that is the case. As a matter of policy, where the information available will support a final designation from the outset, a final rather than interim designation will be made. Where an interim designation has to be made, a 30-day duration provides an appropriate balance between limiting interference with individual rights and safeguarding national security. A period of 30 days is appropriate to prevent payments or disrupt specific activity. It provides

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time for further investigations to be carried out and for information to be gathered and analysed by operational partners, with a view to presenting a case to the Treasury for maintaining the asset freeze at the higher legal threshold—reasonable belief—for a final designation. A total duration of 30 days also ensures that the Treasury has sufficient time thoroughly to scrutinise and test the information gathered by operational colleagues before making a decision. 

It happens to be that 30 days is also the duration of interim designations under New Zealand law, and it is comparable with the maximum number of days under the suspicious activity reporting regime, which is 31 days. That gives people the opportunity to suspend suspicious transactions while the authorities undertake further investigations. Reducing the maximum duration of an interim designation to 28 days will mean that there is less time for further information to be gathered and considered before an interim designation lapses. 

Mr Hanson:  rose—  

Mr Hoban:  If the right hon. Gentleman is patient, I might just pre-empt him on the point on which he wants to push me. He may have wanted to intervene to suggest that there is a limited difference between 30 and 28 days. However, as I have noted, 30 days does follow the New Zealand model and is broadly in line with the suspicious activity reporting. 

The crux of the right hon. Gentleman’s amendment is consistency. He argued for consistency between interim freezes and the pre-charge detention period of 28 days. We do not accept that there is a link. Asset freezing is a preventive tool and does not rely on other actions such as arrest or charge. An interim asset freeze is not the same as pre-charge detention; it involves different and discrete processes and does not, therefore, need to be aligned with the maximum period a terrorist suspect can be detained before they are charged or released. As he noted, pre-charge detention is subject to a separate review. It is worth reflecting that of the 57 cases of asset freezing under UN Security Council resolution 1373, 17 relate to people overseas. In the same way, there is no automatic drive for asset-freezing orders to be consistent with control orders; we discussed the nature of control orders under the previous group of amendments. Pre-charge detention does not need to be consistent with control orders, because of the different nature of the two. I hope that that rationale for having a 30-day limit, rather than a 28-day limit, is enough to satisfy the right hon. Gentleman. 

Mr Hanson:  I am grateful for this discussion. Interestingly, the Minister’s key point was that 30 days may be required to gain further information, so that a final designation can be secured and measures in the legislation can be used. That is the same argument that we made for 28 days rather than 14 days; we argued that we might need more time to ensure that information was gathered, because the terrorist network, as the Minister will know, is very widespread, and terrorists do not often volunteer the information, funnily enough. They do not like to be caught and sent to prison for long periods of time. One of the key things that we found when trying to get

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28 days for pre-charge detention—that is the figure that I put in the amendment—is that sometimes that information leads to various investigations that cannot bring forward sufficient information to finalise a particular conclusion in that time period. 

A 30-day period, as the Minister said, was discussed in the other place. A range of options were put forward, and the Minister has settled on 30 days for an interim designation. I was simply trying to ensure consistency for the Minister, because if I were outside the House and was potentially going to be affected by the legislation, and wanted to make mischief and raise challenges, I would look at some of the other consistencies across Government. If the Government have a 28-day period for pre-charge detention, a legal case could be made that there are similarities with the asset-freezing regime. I am not saying that the case would be made, but it could. Having a 28-day period for the asset-freezing regime and a 28-day period for pre-charge detention creates a figure that is consistent across Government. It says that 28 days is a reasonable time for a case to be made, whether under the asset-freezing regime or the pre-charge detention regime. 

Mr Hoban:  Does the right hon. Gentleman not recognise that there is a distinction here, and that we need to ensure that we do not inadvertently link two different regimes? Pre-charge detention means that someone is deprived of their liberty, and there are rightly proper controls over that. We are discussing an interim order to freeze someone’s assets while more investigation takes place. In the same way, there is a difference between a control order and an asset-freezing regime: asset freezing impinges on people’s liberty to a lesser extent. That is why it is important to think about the right period for asset freezing in isolation from the right period for pre-charge detention. 

Mr Hanson:  There will not be a major difference between the Minister and myself on this issue; we will not fall out over it. I simply wanted some discussion with the Minister on why he has chosen 30 days as the period after which the interim designation will expire, when at the same time, through the Macdonald review, he is looking to reduce pre-charge detention from 28 to 14 days. There seem to be inconsistencies, generally, across the regime dealing with terrorist offences. Although the two aspects are different, and while I accept that asset-freezing orders are not control orders or pre-charge detention, it is important that the Government have a principle that says that there is a set period of time in which we need to conclude consideration of charges made with regard to control orders, terrorist asset freezing or pre-charge detention. That consistency would be welcome, because it sets a principle, rather than having different regimes for different aspects. 

I will not push the amendment to a Division, but the Minister should reflect on what I have said, so that we have, for public consumption, something that has consistency, does not give room for challenges once the legislation is enacted, and does not create ambiguities for those who seek to undermine British democracy through terrorism. They could use those ambiguities to try to drag out particular cases, challenge particular decisions, or make mischief downstream. Whatever the Minister has said, I still think that there is the potential

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for a good lawyer—I am not one—to make those arguments about different dates having been put in place for different regimes dealing with similar problems, even though those problems are different in nature. I beg to ask leave to withdraw the amendment. 

Amendment, by leave, withdrawn .  

Clause 8 ordered to stand part of the Bill.  

Clauses 9 and 10 ordered to stand part of the Bill.  

Clause 11 

Freezing of funds and economic resources

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

Mike Gapes:  I seek your advice, Mr Gale, because the issue I want to raise relates to several clauses, including, potentially, clause 42, and I wonder whether it is appropriate to raise it under clause 42, or earlier? My question concerns the basis for the definition of the anti-terrorist proposals, in terms of their scope. We have a very helpful paper from the Library that deals with all the relevant United Nations resolutions, and as I understand it, the original basis for those resolutions—I refer to the 1267 committee at the UN—is specific to Osama bin Laden, his al-Qaeda organisation and its associates. However, we have legislation in this country that designates as terrorist organisations certain bodies, including dissident republicans in Northern Ireland, people from Sri Lanka—the Tamil Tigers—and various other organisations. I therefore seek clarification from the Minister, or from you. With regard to persons who assist individuals with the financial aspects of an asset freeze on terrorists, what is the scope of the Bill in such matters? Are we dealing simply with the 1267 committee, resolution 1303 and other UN resolutions? Or are we dealing with the wider question of those who assist terrorists from different organisations, and not simply those resolutions that are spelled out in the schedule that is, I think, referred to in clause 42? 

The Chair:  I will take that as a comment on clause 11, rather than as a point of order, and I invite the Minster to respond, on the understanding that if he does, and the hon. Gentleman is satisfied, we shall not come back to the matter on clause 42. If the Minister indicates now that he would prefer to come to the matter on clause 42, we will not discuss it now. 

Mr Hoban:  The hon. Member for Ilford South makes an important point, because there are a range of asset-freezing measures. However, the Bill relates purely to UN resolution 1373 and the regime that was struck down by the Supreme Court. That is what we are trying to remedy through the Bill. Other asset-freezing regimes are related to other Acts of Parliament and other orders. 

Mike Gapes:  I am grateful for that explanation. So the fact that the Tamil Tigers or Irish republican dissidents, for example, are not mentioned does not in any way mean that by adopting the Bill today we are saying that we are narrowing the focus of the asset-freeze regime? 

Mr Hoban:  No, we are not. 

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The Chair:  I take it that we have put that issue to bed. We will not come back to it again. 

Question put and agreed to.  

Clause 11 accordingly ordered to stand part of the Bill.  

Clause 12 ordered to stand part of the Bill.  

Clause 13 

Making funds or financial services available for benefit of designated person 

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

12 noon 

Kerry McCarthy (Bristol East) (Lab):  I have a quick question for the Minister on a point of clarification about subsection (2), which introduces an additional test. Clauses 11 to 15 are all similar, in that they are about prohibitions on dealing with funds, or making funds, financial services or economic resources available to a designated person or for the benefit of a designated person. Only in clause 13 is there a subsection stating that the prohibition applies only if the designated person 

“thereby obtains, or is able to obtain, a significant financial benefit”. 

There is some vagueness about what a “significant financial benefit” would be, and it seems that it would very much be a matter of interpretation in particular circumstances. Will the Minister explain why the subsection is included in clause 13 and does not apply to the other prohibitions? 

Mr Hoban:  The hon. Lady is right in identifying the difference between clauses 12 and 13. Her point is that clause 12 is about making funds or financial services available directly to an individual, whereas clause 13 is about making funds or financial services available for the benefit of a designated person, where those funds or services are received by a third party. The question is whether they provide any benefit to the designated person. 

The hon. Lady raised a point about what “significant” means. Paragraph 40 of the explanatory note states: 

“Whether a financial benefit is ‘significant’ is dependent on the circumstances of each particular case.” 

There is a judgment to be made there. “Significant financial benefit” is intended to mean a sum that would be significant in terrorist finance terms, bearing in mind—this is a crucial point—that the cost of financing terrorist attacks can be relatively small. On Second Reading, I cited an example of an attack that cost less than £10,000, so we are not talking about large sums. 

What is significant will vary from case to case. Several factors should be taken into account, including the value of the payments and whether the transaction is a one-off or a repeated payment. Prohibition is not intended to be a blanket ban on making funds available to designated persons. Where there is any uncertainty about whether a particular transaction would be caught by the prohibition, the Treasury can provide guidance, and where a transaction is caught, a licence can be requested from the Treasury. 

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In practice, some transactions—making loan repayments or paying a small utility bill on behalf of a designated person—may not be deemed to confer significant financial benefit and therefore will not require a licence. Where a transaction might confer significant financial benefit, it may still be authorised by way of a Treasury licence, provided that the appropriate conditions can be applied to remove any risk of the divergence of such funds to support terrorism. I would say to the hon. Lady that the terms are widely couched, but we will look at the nature, frequency and amounts of payments. Where someone believes that they might be making a significant contribution available, the right step is for that person to raise the matter with the Treasury to see whether it should be covered by a licence. 

Kerry McCarthy:  On a further point of clarification, the Minister mentioned paying a utility bill as an example of something that might not be caught by the notion of giving significant financial benefit. If there is a designated person in a household and such a designation causes financial hardship for the rest of the family, where is the boundary between somebody seeking to help the family through a difficult economic time and somebody providing assistance for the benefit of the designated person living in that household? 

Mr Hoban:  Let me give the hon. Lady an example, because we need to look at the circumstances of particular cases. She is right to say that there is a licence that enables, for example, benefits to be paid to such a family, in the same way that one would be available for meeting legal aid costs. Licences can, therefore, be put in place to ensure that reasonable funds are paid to alleviate hardship, but that is usually in cases where the state is giving benefits to an individual. 

The prohibitions are not intended to prevent the receipt of legitimate payments, such as household benefits or wages. The payment of wages to another member of a designated person’s family would not be caught by the prohibition, unless the person making such funds available to that family member knew or suspected that the funds were being used for the designated person’s significant financial benefit. If third parties wish to makes funds or financial services available, including through meeting a financial obligation that the designated person would otherwise be wholly or partly responsible for, they should seek a licence from the Treasury. The architecture for ensuring that proper payments are paid to individuals has been well thought through. 

Question put and agreed to.  

Clause 13 accordingly ordered to stand part of the Bill.  

Clauses 14 to 18 ordered to stand part of the Bill.  

Clause 19 

Reporting obligations of relevant institutions 

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

Kerry McCarthy:  I have another quick question for clarification from the Minister. Clause 19 deals with reporting obligations of relevant institutions. It refers to the situation when a relevant institution knows or has reasonable cause to suspect that someone is a

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designated person, and so on. The Minister has explained the steps that will be taken to publicise a designated person—through the Treasury website and through disseminating that information on to financial institutions—but the concept of an institution knowing the necessary information is open to challenge. What happens within the chain of command if a junior member of staff within a financial institution has reasonable cause to suspect a person, but people further up the food chain do not, or vice versa? 

Mr Hoban:  I am sure that the hon. Lady will remember from her experience of working in the financial services sector—I certainly know from my experience of working with a professional services firm—that procedures are in place, around money laundering, for example. Such procedures ensure that suspicious activity is reported further up the food chain, as it were, within financial institutions. 

We expect institutions to have processes in place to ensure that information is made known—first within them, and then to the Treasury. We expect that where the reporting business knows or suspects that a customer is a designated person, it must provide details of the nature and the amount or quantity of funds, or economic resources held by it for the customer at the time when it first had knowledge or suspicion. We expect the institution to have the proper the processes in place to identify relevant situations. 

Question put and agreed to.  

Clause 19 accordingly ordered to stand part of the Bill.  

Clauses 20 to 27 ordered to stand part of the Bill.  

Clause 28 

Appeals and reviews: supplementary 

Tom Brake:  I beg to move amendment 3, in clause 28, page 13, line 41, at end add— 

‘(5) In section 67(3) of the Counter-Terrorism Act 2008 (Rules of court about disclosure)—(a) in paragraph (c) after “that”, insert “subject to paragraph (ca) below”; and(b) after paragraph (c) insert—“(ca) that in relation to a final designation, the material disclosed by the Treasury on which they rely is sufficient to enable each designated person to give effective instructions to a person appointed as a special advocate to represent that party’s interests;”.’.

The Chair:  With this it will be convenient to discuss amendment 4, page 29, line 28, schedule 1, at end insert— 

‘(fa) leave out rule 79.2.’.

Tom Brake:  I rise to speak about a couple of amendments that the Joint Committee on Human Rights believe that this Committee should consider. I introduce the proposals in, I hope, a constructive, probing manner. 

On amendment 3, hon. Members will be aware that when the JCHR considered the matter, it asked the Government whether they felt that the principles that were enunciated by the House of Lords in the case of AF would apply to asset freeze proceedings, so that the

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designated person would be given sufficient information about the allegations made against him, to enable him to give effective instructions to the person who represents his interests. 

The Government response, which we have heard again today, made a clear distinction between asset freezes and control orders. It set out their view that asset freezes were of a different nature from control orders, in terms of their impact on human rights. The JCHR pointed out that the Supreme Court, in the case of Ahmed, found asset freezes to be at least as restrictive of an individual’s liberty as control orders. I find that a little strange, in terms of the impact that control orders and asset freezes have, considering the restrictions that apply under control orders, which seem to be more draconian than asset freezes. However, that is what the Supreme Court found in that case. 

The Joint Committee goes on to state the view that the principle in the AF case will be held to apply to asset-freeze proceedings. I would like the Minister to let the Committee know whether any assessment has been made, or whether it is possible to make one, of the risk of litigation on the issue if there are similarities, as the Joint Committee on Human Rights believes. If the Government were minded to adopt this amendment, it would ensure that the relevant provision of the Counter-Terrorism Act 2008 would be amended, so as to require rules of court to secure that the court’s otherwise absolute duty of non-disclosure in asset-freeze proceedings, is expressly qualified by the duty to ensure sufficient disclosure to protect the rights to a fair hearing. The purpose of this probing amendment is to clarify the Government’s position. I will listen carefully to the Minister’s response. 

Linked with amendment 3, is amendment 4, which contains a simple insertion to “leave out rule 79.2”. According to the Joint Committee on Human Rights that would reinstate the supremacy of the right to a fair hearing over the duty not to disclose information in the public interest. The amendment would remove the provision in the civil procedure rules, which explicitly subordinates the overriding objective of the system of civil justice to the state’s interest in ensuring that information is not disclosed contrary to the public interest. Again, I will listen carefully to what the Minister has to say on those two points. Clearly, the amendments are ones that the Joint Committee on Human Rights felt were substantial, and I hope that the Minister will be able to respond in a detailed and positive vein to its concerns. 

Mr Hoban:  I am grateful to my hon. Friend for raising some important issues with amendments 3 and 4. Amendment 3 seeks to create a new subsection within section 67 of the Counter-Terrorism Act 2008, which provides for the content of court rules about disclosure in financial restrictions proceedings, and which will apply to court rules made in relation to challenges to decisions under this Bill. The amendment would place a requirement for the court rules, which are to be made initially by the Lord Chancellor for England and Wales and Northern Ireland, to ensure that the Treasury provides sufficient open disclosure to enable the designated persons to give effective instructions to the special advocate. That form of words is based on the European Court of Human Rights judgment in A, which was applied by the House of Lords in AF & Others to the stringent control orders for them. I am going to come back to the

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point that my hon. Friend made about the distinction between the application of AF and Others to asset freezing in comparison with control orders. 

The effect of the amendment is therefore to apply AF (No. 3) to challenges to final designations. My noble Friend, Lord Wallace of Tankerness, the Advocate General for Scotland, explained in the other place, when almost identical amendments to this Bill were debated and withdrawn, that the Government do not support this amendment. Of course, designated persons must have the full protections afforded them under article 6 of the European convention on human rights. 

12.15 pm 

Section 67(6) of the Counter-Terrorism Act 2008 is absolutely clear that nothing in that section, or in the rules of court made under it, requires the court to act in a way that is inconsistent with article 6 of the European convention on human rights. That includes provisions relating to the Treasury’s disclosure of information only to the court and a special advocate. 

The Government and the legislation are absolutely clear that article 6 rights apply in full to asset freezing. The Government do not accept that the principles of AF and Others automatically apply to asset freezing. The application of this judgment to asset freezing has not yet been determined by the courts. The courts have determined that AF and Others principles apply to the stringent control orders before them in that case, and also to financial restrictions proceedings under the Counter-Terrorism Act 2008. But the courts have not determined that AF and Others principles apply to asset-freezing cases. It would be wrong to say that legally there is no room for doubt on that. It goes back to the point made by my hon. Friend about the Supreme Court’s criticisms of asset freezing. Of course, what the Court was considering was the 2006 order, not the 2009 order, which included a number of elements to improve safeguards and proportionality. 

The Court was also considering the asset-freezing regime as it operated in 2007, since when a significant number of changes have been made to improve the proportionality and fairness of the regime under the previous Government and again under the Bill. The Supreme Court acknowledged that changes to the 2009 order had 

“ameliorated to some degree the onerous effects of the regime on spouses and other third parties who interact with the designated person” 


“the impact on the designated person is just as rigorous as it was under the 2006 Order.” 

The Bill takes as its starting point the 2009 order and makes further amendments to increase the proportionality of the regime, making it clear, for example, that state benefits paid to spouses are no longer caught by the prohibitions, including benefits paid to spouses even when they relate to the designated person. It also introduces additional safeguards—for example, an increase in the legal test, a merits-based appeal for designation decisions and the introduction of an independent reviewer. We do not believe that the criticisms made in respect of the 2006 order apply either to the 2009 order or to the Bill. In the Government’s view, as I have said before, the AF (No.3) principles do not apply to asset freezing, because asset freezes are not as significant in their human rights

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impact as control orders can be. Nor are they as wide-ranging in their financial and economic impacts as decisions to impose financial restrictions under the Counter-Terrorism Act 2008. 

However, this is something that it is open to the courts to determine if the Government’s position were to be challenged. Should the courts decide that AF and Others principles need to apply to asset-freezing cases, any court rules that cut across that will be read down to ensure compatibility with the ruling. It would be unnecessary to amend the legislation. In any event, it would be wrong to pre-judge such a determination by the courts and require now the disclosure of sensitive information that could damage national security or the detection or prevention of crime. Doing so would clearly not be in the national interest. Indeed, it would also be wrong to adopt a piecemeal approach to this important issue. The issue of special advocates and the use of intelligence material is clearly one that cuts across a number of areas. If we try to address these important issues in an ad hoc way in individual pieces of legislation, we risk ending up with different requirements in different pieces of legislation. 

My right hon. Friend the Prime Minister announced in July that the Government will review the whole matter of the use of sensitive material in judicial proceedings and will issue a Green Paper next year. We expect it to be published in the summer. This will allow time for judgment to be handed down in the lead case in relation to whether the judgment in AF and Others applies more widely than to stringent control orders. The tribunal case of Tariq will be heard by the Supreme Court in January and we expect a judgment in the spring. Next year’s Green Paper will ensure that such a coherent and consistent approach is taken to the use of sensitive material in judicial proceedings. It would be wrong to pre-empt it, and I hope that my hon. Friend will welcome and support this approach and withdraw his amendment. 

Tom Brake:  I have heard the Minister’s confirmation that the criticism in relation to the Supreme Court’s finding was related to 2006, and therefore one hopes that the current proposal will not be subject to the same criticism. I also heard what the Minister said about not approaching this in an ad hoc way, and I agree entirely. Clearly, there is a range of counter-terrorism legislation, including terrorist asset-freezing legislation, as contained in this Bill. Indeed, components of terrorist asset-freezing are in other Bills. I agree with the Minister that we need to deal with this holistically to ensure that as far as possible we have an identical approach across the range of counter-terrorism legislation being adopted. With those comments, I beg to ask leave to withdraw my amendment. 

Amendment, by leave, withdrawn.  

Clause 28 ordered to stand part of the Bill.  

Clause s 29 and 30 ordered to stand part of the Bill.  

Clause 31 

Independent review of operation of Part 1 

Tom Brake:  I beg to move amendment 5, in clause 31, page 15, line 25, at end insert— 

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‘( ) A person may not be appointed under subsection (1) unless—(a) the Secretary of State lays a report before both Houses of Parliament which recommends the person and sets out the process by which he was chosen,(b) a Minister of the Crown tables a motion in both Houses to approve the report laid under this subsection, and appoint the person, and(c) such a motion is agreed by a resolution of both Houses of Parliament.’.

The Chair:  With this it will be convenient to discuss the following: amendment 6, page 15, line 31, leave out ‘send the Treasury a’. 

Amendment 7, page 15, line 32, after ‘report’, insert ‘to Parliament’. 

Amendment 8, page 15, line 34, leave out subsection (4). 

Amendment 9, page 15, line 37, at end add— 

‘( ) Appointment under subsection (1) shall be for a non-renewable term of five years.’.

Tom Brake:  Hon. Members may be pleased to hear that this is the final batch of amendments that the Joint Committee on Human Rights thought that we should discuss and requires airing in today’s Committee. The amendments pertain to parliamentary accountability. I suppose I need to bear in mind what I just said about ensuring that we do not adopt an ad hoc approach to legislation, but the purpose of the amendments is to ensure that there is greater parliamentary oversight of the role of the independent reviewer of the asset-freezing regime, so that it would become a clear responsibility of Parliament to monitor the independent reviewer’s activities, and that Parliament, rather than the Treasury, should receive reports about the work of the independent reviewer. The amendments would ensure that there was parliamentary confirmation of the appointment of the independent reviewer by the Treasury, that there would be reporting by the independent reviewer directly to Parliament and not to the Treasury, and finally, that there would be a single, non-renewable term of appointment of five years. 

The amendments would achieve those aims if the Government were minded to adopt them. I will listen carefully to the Minister’s response. I think there is an important point made by the Joint Committee on Human Rights on the role of Parliament, as opposed to the Treasury, regarding the independent reviewer. However, I am aware that a different approach has been adopted in other areas of counter-terrorism legislation, so it is something that we may need to bundle up into the counter-terrorism review and perhaps come forward with alternative proposals. 

Mr Hoban:  Again, I am grateful to my hon. Friend for tabling his amendments about the status of the independent reviewer. He poses some important points that we need to respond to. 

The provisions in the Bill are based on the review of counter-terrorism legislation contained in the Prevention of Terrorism Act 2005. We believe that the model is effective and ensures that there is an appropriate regime for the review of the asset-freezing regime. 

Amendment 5 would require the independent reviewer to be approved by Parliament. The Government are committed to ensure that there are effective civil liberty safeguards set out in the Bill, and we have made

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amendments in the other place to strengthen those safeguards. However, we believe that the independence of the reviewer is an essential part of these safeguards, and that will be the principal objective of any appointment. We do not believe that it is necessary for Parliament to approve the independent reviewer, as that would be a significant departure from standard practice. The appointment of a reviewer by Government reflects the long-standing principle of ministerial accountability, which is that Ministers are directly accountable to Parliament and to the public for those whom they appoint. Parliament will, of course, be able to scrutinise the work of the reviewer and hold him or her to account through existing mechanisms, for example through parliamentary Committees. 

Amendments 6, 7 and 8 would replace the independent reviewer’s obligation to report to the Treasury, and the Treasury’s obligation to lay that report before Parliament, with an obligation on the reviewer to report directly to Parliament. The annual reports and any other ad hoc reports from Lord Carlile have always been provided in the first instance to the Home Office to check that they do not inadvertently include any material that is classified and therefore cannot be published. Asset freezing also deals with sensitive and classified material, and we therefore believe that a similar process is appropriate. 

Given that the independent reviewer will have access to all relevant papers and evidence, including highly classified intelligence reports and, on occasion, material that is being considered as part of a separate criminal prosecution, it is only sensible to ensure that published reports do not include classified or sub judice material. Parliament could not undertake such a check. 

I assure my hon. Friend the Member for Carshalton and Wallington and the Committee that the Government will not seek to influence the outcome of any report. The report will be provided to Parliament as quickly as possible after it has been received by the Treasury and will be made available to the public. 

Under amendment 9, the independent reviewer would be appointed for five years and the appointment would not be renewable. However, we do not believe it is necessary to have a statutory limit on the length of time that a reviewer should remain in post. There may be valid reasons why a reviewer should leave at an earlier stage, but there may also be valid reasons why a reviewer should stay in post longer, such as the expertise that a reviewer picks up over time and their knowledge of how the legislation works. That built-up knowledge and experience is invaluable. 

Hon. Members will be aware that the amendments and the role of the independent reviewer were debated at length during the Bill’s passage through the other place, informed by the expertise and experience of the outgoing independent reviewer, Lord Carlile. Let me reiterate for the Committee’s benefit what he said in that debate. On the question of appointment procedures, he said: 

“As to the way in which the independent reviewer is appointed, I do not have any very strong views. Appointment by a Minister does not make the reviewer any less independent. Many public appointments have sprung surprises on government; for example, chief inspectors of prisons. Independence is in the way the person concerned operates.” 

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On the question of whether submitting reports to the Government, rather than directly to Parliament, would run the risk of reports being altered in any way, Lord Carlile said: 

“I cannot imagine any circumstances in which any honourable person appointed to this role would be prepared to change their report at the behest of a Minister or civil servant for political reasons. It has never happened. It did not happen with any of the reviewers before I was appointed, it has not happened during my period of tenure, and I do not think it will happen with any successor I can foresee under the present or changed arrangements.”—[Official Report, House of Lords, 25 October 2010; Vol. 721, c. 1085-86.] 

Let me reiterate: the Government consider it essential that the independent review of the asset-freezing regime is robust, impartial and transparent; and we are satisfied that the provisions in the Bill regarding the appointment and operation of the reviewer are appropriate to achieving that. I hope, therefore, that my hon. Friend will withdraw his amendment. 

Tom Brake:  I have listened carefully to what the Minister has said in response to the amendments. It was pertinent to the debate that he quoted Lord Carlile, who provided some reassurances about aspects of how the independent reviewer works and the extent to which that independent reviewer, in his expectation, would ensure that their independence was not affected or influenced by anything that the Government of the day might seek to impose or use to influence them in any way. I am reassured by what the Minister said, and I beg to ask leave to withdraw the amendment. 

Amendment, by leave, withdrawn.  

12.30 pm 

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

Mr Hanson:  I did not comment on the amendments because I agreed with every word the Minister said. We have been knocking chunks off each other on different Bills for the past few weeks, so in the spirit of cross-party co-operation, I just wanted to place my agreement with him today on the record. 

However, may I ask the Minister for some clarity about the appointment that the clause will authorise? He has already mentioned Lord Carlile, the present independent reviewer of terrorist legislation. His appointment expires on 31 December this year and a further appointment has already been made. Does the Minister envisage that the independent reviewer appointed under the clause in due course will be a different person from the independent reviewer of terrorist legislation, whose remit is wider? 

If the Minister can supply such information today, I would like details about the level of the salary to be paid to the individual appointed to the post, if it is independent from Lord Carlile’s current post. How does he intend to handle the appointment in terms of publicising it? I accept fully that it should be a ministerial appointment and that the person should be accountable to Ministers, but I am interested in hearing how he intends to recruit and deal with for applications the post. Although it is difficult to give certain information, because the post will be work load-oriented, what time commitment does the Minister anticipate the post will

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require of anyone either in a joint post with the current reviewer, or in a separate post? We need to establish strictly in budgetary and monetary terms the time commitment, given that I expect the position to be paid on a daily or a cumulative basis. 

I am interested in three things: salary, method of appointment and whether the Minister, in the interests of saving resources, intends to merge both posts in due course, following passage of the Bill. 

Mr Hoban:  I am grateful to the right hon. Gentleman for his questions, although I am not sure that my answers will give him much satisfaction. Over the next few months, the Government will consider how best to recruit the independent reviewer and, following on from that, whom to appoint. The independent reviewer must complete the first review as soon as practicable and no later than nine months after the Bill comes into force, so we will need to appoint the person in the next few months to give them adequate time to complete their review. 

Clearly, the salary will depend on whom we appoint and how much they cost, but it will also depend on the volume of their work load and how they wish to go about it. I would not want to think that their approach to the job would be in any way compromised by budgetary constraints that we might impose. The role is important. We need to go through the proper process and to make sure that adequate resources are available to do the job, and that depends on the amount of work they have to undertake to review the regime adequately. 

Mr Hanson:  I am less concerned about the salary, although I wanted to give the Minister an opportunity to put such matters on record as well as the method of recruitment. I am more concerned about the necessary duplication. Under the clause, the Treasury will appoint a person to review independently the operation of the terrorist asset-freezing regime. There might be 10, 20 or 30 orders made during the year—we do not know. We shall assess the work load in due course. 

Just over the road is my former Department, the Home Office, with an independently appointed reviewer of terrorist legislation, who scrutinises issues to do with control orders and a range of other measures. The reviewer is independent of the Government and accountable to the Home Secretary. I met the independent reviewer regularly when I was Minister for Policing, Crime and Counter-Terrorism, to be briefed on his concerns. As the Minister said, the reviewer did not interfere, was totally independent and produced his reports. He did cost a salary and back-up, but his reports raised a range of issues that were of interest to the Home Office. The reviewer examined the regime in a general, wide way. 

The question for the Minister is: does he intend to establish a completely separate, parallel organisation accountable to the Treasury for reviewing terrorist-related asset-freezing orders, when there is an individual who is appointed to look at a range of other terrorist-related activities in terms of the Home Office’s performance on control orders and other issues? Last week, in this very room, the Minister would not give resources of about £1 million a year to support looked-after children through

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child trust funds, yet, in this time of austerity, he is going to set up an entirely separate organisation accountable to the Treasury, with salary, with back up, to produce reports when there is already somebody in the Home Office doing a similar job on a range of other terrorist-related activity. I recognise that ministerial accountability for the Bill lies with the Minister and ministerial accountability for control orders lies with the Home Secretary, and that is fine, but surely, in this wonderful world of co-operation, there is a mechanism whereby the potential posts could be looked at as one, with joint ministerial accountability if necessary? 

I will not propose deletion of the clause, but it is incumbent on the Minister to give serious reflection, not only to that possibility, but to whether he intends to rule it out. There is the potential for duplication and for extra cost when there is scope for ministerial accountability to be held by two Ministers, with one reviewer looking at both areas and reporting on separate issues to two separate Departments. Surely it must be worth while to consider doing that? I would welcome the Minister not giving me details on salary or on time commitments, but instead giving me details on whether he intends to give that serious consideration. 

Mr Hoban:  All that I will say is that nothing is ruled out and nothing is ruled in. We need to consider this carefully. The right hon. Gentleman makes his argument, but we need to look at this in the context of the regime that we are proposing to set up. 

Mr Hanson:  With due respect, the Minister is asking us to approve the clause, which states that the Treasury must appoint a person to review the operation of the regime. He is saying, “We might decide to do this, we might decide not to do this. We will let you know in due course.” He is asking the Committee to authorise him in appointing an official, but he cannot tell us whether he has had any discussions with colleagues in the Home Office. 

I would be grateful if the Minister told us today whether he has discussed this matter with the Home Secretary. Has the Chancellor discussed it with the Home Secretary? Has the Minister discussed it with my successor in the Home Office, his right hon. Friend the Minister for Policing and Criminal Justice? Has he discussed it with the incumbent independent reviewer in the Home Office, Lord Carlile, or with Lord Carlile’s appointed successor? Has he costed it in terms of what the cost will be for the Treasury, versus the cost for the Home Office? Has he done any of those things? He is asking the Committee, both Government Members and Labour Members, to authorise the establishment by the Treasury of a new post, but he has not been able to convince me on whether he has ruled out or ruled in those options. A cursory, one-line answer will not do. Has he met with those individuals? 

Malcolm Wicks:  Surely the point of being a Minister is the ability to make decisions. Given the reasoned argument from my right hon. Friend, could the Minister not make a decision that is in the interests of efficiency and the taxpayer? 

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Mr Hanson:  I am grateful to my right hon. Friend. He has been a Minister as well, and he knows that we can take those decisions. 

I am not asking the Minister to make a snap decision today. I will not vote against clause 31. However, I want him to at least accord the Committee the respect to say: first, that he will meet, or has met, the Home Secretary; secondly, that he will discuss the matter with Lord Carlile and/or his successor; thirdly, that he will examine the cost of clause 31 versus the cost of the current reviewer of legislation; fourthly, that he will look at sharing between Treasury Ministers and Home Office Ministers the responsibilities for a possible joint post; and fifthly, that he will report back to us at some point before Report stage. 

Those are reasonable questions. It is not unreasonable to ask the Minister, if we give him the power to appoint, that he consider them before Report. I am not happy with a one-sentence answer. We have had a reasonably productive and courteous debate and I will not shift from that position, but the Minister owes it to his Back Benchers, whose taxpayers’ money they will be spending on this post, to at least tell us how he will consider those issues for the future. 

Mr Hoban:  I do not quite understand why the right hon. Gentleman has suddenly built up a great head of steam on this point. I suppose I should be grateful that, after 13 years, Labour Members are concerned about the efficiency and effectiveness of public spending. That is welcome. 

We will look at those issues. One thing that I have established in six months as a Minister is that the Treasury looks very carefully at the value-for-money case on appointments and at how to work across Government. We have had discussions with the Home Office. The right hon. Gentleman will be aware that my noble Friend Lord Sassoon is responsible for the asset-freezing regime, and he will make that decision appropriately. The right hon. Gentleman has made some powerful and rather passionate arguments about how he thinks the process should work. He has his own experience. We will of course bear in mind what the right process is and we will discuss that with the Home Office. 

It is not appropriate to go into more detail before the Bill has Royal Assent on what the appointment should look like, who should be appointed and what the salary should be. We are working on those matters and the right hon. Gentleman has made his point. I am grateful for him doing so—we can benefit from the experience of others. He should be reassured that the Treasury will do all in its power to ensure that the right appointment is made—one that represents value for money and efficiency across Government. 

Mr Hanson:  Let me complete my point, because we still have 20 minutes before 1 o’clock. 

Alok Sharma (Reading West) (Con):  That explains it. 

Mr Hanson:  No, no. That does not explain it. The Member for Reading East— 

Alok Sharma:  West. 

Column number: 38 

Mr Hanson:  Sorry, the hon. Member for Reading West will know that if I have the opportunity to talk for a long time, I can do so. On this occasion, however, I am not trying to do so. We have spent many hours in Committee, during which time I have put many points on the record and perhaps kept the hon. Gentleman for longer than he would wish, but this is not one of those occasions. He will see from the speed of today’s debate that I have not done that. 

The Bill commenced in another place and our discussions in Committee will be completed here today—perhaps before 1 o’clock or soon after. The Bill will come back to the Commons on Report and will receive Royal Assent because we will not be making any amendments to it. It will be law in perhaps as little as in two weeks’ time. All I am saying is that, before Report, the Minister should have some discussions with his noble Friend. That would be helpful to the House and to another place, which voiced concerns about the exercise to which the hon. Member for Carshalton and Wallington referred in his amendments. 

By the time we reach the final stages of consideration of the Bill, it would be helpful to have some clarity about the Government’s proposals on the independent reviewer. Let me remind hon. Members that the new person takes up their duties on 1 January, following the noble Lord Carlile’s retirement from the position. Does the new person know what their work load might be in 2011 and 2012, given that the clause states that they shall produce a report nine months after this part of the Bill comes into force? 

If there is to be one person dealing with the review of terrorist legislation, which makes eminent sense to me in cost terms and in terms of having an overview of such legislation, the Treasury’s position needs to be put into a work programme for the person who will be appointed to replace Lord Carlile from January 1. If we are not to have a merged position but are to have two separate positions, we will not have the overview that we would like across the board and we will be establishing, at some cost, a new position and back-up with additional costs for the Treasury, which will duplicate work that could be done by one person taking overall responsibility. 

I said that I will not press the matter to a vote, but I hope that the Minister will consider coming back on Report and providing some answers to those questions. If he has not talked Home Office colleagues, I hope that he will. If he has done so by Report, I hope that he will have come to some conclusions on these matters. 

Question put and agreed to.  

Clause 31 accordingly ordered to stand part of the Bill.  

Clauses 32 to 53 ordered to stand part of the Bill.  

Clause 54 

Channel Islands, Isle of Man and British overseas territories 

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

Malcolm Wicks:  I know that this is usually a technical clause that goes through on the nod, but recent history shows that territories such as the Channel Islands and the Isle of Man can be the soft underbelly of financial integrity. In the past, there have been cases of money laundering for criminal purposes and tax fraud. We must, therefore, be concerned that some of the territories

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might be used by terrorists for placing their assets. Will the Minister go into a little more detail—not too much—about how the Bill’s provisions will be implemented in Guernsey, Jersey, the Isle of Man and the British overseas territories? We can all read the clause, but more detail would be helpful. Is Her Majesty’s Government confident that the provisions will be enforced in all the territories, and will they monitor such enforcement? 

12.45 pm 

Mr Hoban:  Let me comment broadly on clause 54, which provides for an Order in Council to be made to extend any of the provisions of part 1 of the Bill to the Channel Islands, the Isle of Man or any other British overseas territory. Anyone in doubt about what a British overseas territory is may consult paragraph 12 of the explanatory note, which has an extensive list of those territories. 

The clause also provides that certain provisions of the Terrorist Asset-Freezing (Temporary Provisions) Act 2010 shall remain in force until 31 March 2011 in Guernsey, Jersey, the Isle of Man and the various overseas territories. That has the effect of extending, beyond the date specified in the 2010 Act, the validity of the Orders in Council that provide for asset-freezing powers in those jurisdictions. The extension is intended to provide enough time either for the Bill to be extended to those jurisdictions, or for those jurisdictions to enact their own terrorist asset-freezing measures, without there being a gap during which no such measures are in place. We have two choices: we either use Orders in Council to extend the Bill to the overseas territories, or they can use their own legislative mechanisms to introduce the measures under their own regime. Whatever happens, the measures will apply in those jurisdictions. 

The right hon. Member for Croydon North talked about monitoring. He will probably be bombarded with letters from the Channel Islands and the Isle of Man, given his comments. Certainly, from my discussions with Ministers from those territories, I know that they take their obligations under international law very seriously, and there is a lot of pressure on those territories to comply with the highest standards of law. The previous Government introduced the Foot review on the compliance of financial services across Crown dependencies and British overseas territories. It made some helpful comments, and has commented on the high state of compliance that there already is in a number of locations. We will make sure that the legislation is extended to the territories and that there are appropriate mechanisms in place to ensure monitoring of compliance with that legislation. 

The right hon. Gentleman is absolutely right: it is important that the same standards apply in those places as do here, and we should ensure that those standards stick. I am grateful for this opportunity to provide confirmation of the seriousness with which we view the measure, and to explain how it should be extended to other territories. 

Mike Gapes:  Can I take it that the Minister is not implying that there have not been problems in the past, particularly with certain overseas territories? He referred specifically to the Channel Islands and elsewhere, but

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there have been problems. For example, a previous Government had to intervene with regard to the Turks and Caicos Islands. Certainly, the United States has had concerns about some British overseas territories being used for money laundering and other unsavoury activities in the past. 

Mr Hoban:  I do not disagree with that, but I have made it clear today and in previous debates about those territories that we expect them to adhere to the highest international standards. I know that the Minister of State, Foreign and Commonwealth Office, my hon. Friend the Member for Taunton Deane (Mr Browne), who has responsibility for those territories, shares the same view. We have been crystal clear about the need to comply with those standards. 

Question put and agreed to.  

Clause 54 accordingly ordered to stand part of the Bill.  

Clause 55 ordered to stand part of the Bill.  

Clause 56 

Short title 

Mr Hoban:  I beg to move amendment 41, in clause 56, page 27, line 27, leave out subsection (2). 

At the start of today’s proceedings, Mr Gale, you helpfully explained procedures with which Members might not have been familiar. I must say that when I saw Government amendment 41 on the selection paper, I thought, “What on earth have I agreed to?” Of course, the amendment removes the wording, normally inserted on Third Reading in the House of Lords, that protects the exclusive privilege of the House of Commons to deal with financial matters. I encourage the Committee to agree to it. 

Mr Hanson:  Anything that diminishes the power of the House of Lords is fine by me. 

Amendment 41 agreed to.  

Clause 56, as amended, ordered to stand part of the Bill.  

Schedules 1 and 2 agreed to.  


That certain written evidence already reported to the House be appended to the proceedings of the Committee.—(Mr Hoban.)  

Mr Hoban:  On a point of order, Mr Gale. May I thank you for chairing the Committee’s proceedings today? They moved with some pace, for which I am grateful, as, I think, are all Members of the House. I am grateful to the Clerk, the Hansard Reporters, the police and the Doorkeepers. I am also grateful to my hon. Friends for participating in the scrutiny of the Bill today. If they speak with their colleagues who were on the Savings Accounts and Health in Pregnancy Grant Public Bill Committee, they will realise that it is unusual for such Committees to be so quiet. 

I would also like to thank my hon. Friend the Member for Carshalton and Wallington, who ensured that some of the key issues on civil liberties were debated effectively during our proceedings. I am grateful to the right hon. Member for Delyn and his hon. Friends for their

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participation and the way in which their focused scrutiny helped tease out the important issues, particularly on coverage. I am grateful to my hon. Friends and the hon. Member for West Ham; the usual channels worked smoothly today, which I welcome. 

We have had a brief scrutiny session today, but the issues that we have been dealing with are important. They are issues that flowed from the events of 9/11. We have always sought, whether in opposition or in government, to achieve the right balance between security and civil liberties, and I believe that the Bill strikes the right balance. It strengthens safeguards for civil liberties, compared with previous measures, and ensures the right level of security for our nation. 

Mr Hanson:  Further to that point of order, Mr Gale. I wish to endorse the Minister’s sentiments about your chairmanship. I also pass on my thanks to your co-Chair, Mr Sheridan, who chaired the Programming Sub-Committee. I am sure that he is delighted to have this afternoon off, as well as Thursday. I endorse the Minister’s comments about the Committee Clerks, the Hansard Reporters and my right hon. and hon. Friends, as well as both members of the Whips Office. I also thank hon. Members on the Government Benches, and the hon. Member for Upper Bann, who has joined the Committee today to represent the interests of the Democratic Unionist party. 

I hope that the Committee has shown that where there is agreement on legislation, the Opposition can act in a constructive way. We have tried to point to some issues that concerned us, and I hope that the Minister will reflect on those. Depending on what the Minister says during his correspondence and after reflection, we may table amendments on Report to continue with some of the themes that we have raised today. 

I am grateful to the Minister, the police and the Doorkeepers, and to all those who have made today’s sitting so short and efficient. This Bill commenced

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under the Labour Government, and we support it in principle. That is why we have taken the unusual step of not dragging out proceedings—those hon. Members who have served on a Public Bill Committee with me during the past few weeks know that I am capable of doing that if required. 

Tom Brake:  Further to that point of order, Mr Gale. I thank you for chairing what has been an amicable Committee. Your role as Chair has been fairly straightforward this morning. I also thank all those who have participated in ensuring the smooth and speedy passage of the Bill through Committee. It has been an important opportunity to remind hon. Members that there are implications for civil liberties in the proposal—not that they need reminding—and it forms part of a wider context, in relation to counter-terrorism legislation, which is the subject of a review at the moment. We must take that into account, as we did in this morning’s deliberations. 

The Chair:  All the remarks of the past four or five minutes have been completely out of order. I will continue in that vein and say to the right hon. Member for Delyn that were Mr Sheridan present, I am sure he would remind him that there is no such thing as an afternoon off in this place. I am sure that hon. Members will find something useful to do with their hard-won time this afternoon. I add my thanks to the staff of the House. Without their assistance, our work would be not only harder but probably impossible. I congratulate the Committee on expediting, with very good humour and due consideration, an extremely important piece of legislation. 

Bill, as amended, to be reported.  

12.57 pm 

Committee rose.