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Lord Kingsland: My Lords, can those powers be effected as speedily—and are they as comprehensive as the powers in the Bill?
Lord McIntosh of Haringey: Yes, my Lords.
Lord Kingsland: My Lords, I shall take the Minister's word for that. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 67 and 68 not moved.]
Lord Kingsland moved Amendment No. 69:
- Page 3, line 36, at end insert Xin connection with the action referred to in section 4"
The noble Lord said: My Lords, in the interests of the House, in concluding these proceedings by 11 o'clock, I shall address only Amendment No. 70. The Minister will recall that as being Amendment No. 42 in Committee and that in moving it, I spoke also to Amendments Nos. 43 and 44. The Minister replied:
- XWe all agree with the principle. Our view is that that is the effect of the current drafting read in accordance with the Interpretation Act 1978. However, we agree that the Bill should expressly provide that in making changes to freezing orders the Treasury must have a belief, as well as stating that it has a belief, that the relevant conditions are met, and that that belief should be reasonable. We shall table amendments on Report to meet that point".—[Official Report, 28/11/01; col. 358.]
Lord McIntosh of Haringey: My Lords, the noble Lord, Lord Kingsland, is of course quite right to say that I gave an undertaking to introduce amendments on Report. They are Amendments Nos. 74 to 77. I then woke up a little late to the fact that we did not agree with Amendment No. 42, as it then was, and I dissociated myself from that amendment.
I spent many happy hours in opposition trying to insert the word Xreasonably" into legislation, and I have spent many happy hours in government trying to resist its insertion into legislation. In either capacity, I have never really understood the basis on which parliamentary counsel sometimes thinks that it is reasonable to include Xreasonable" and sometimes thinks that it is not. But I do my best.
Lord Carter: My Lords, which side is my noble friend on?
Lord McIntosh of Haringey: My Lords, I am against the amendment.
Paragraph 6 of Schedule 3 provides for a freezing order to require specified people, engaged in business in the regulated sector, to disclose any dealings with the subjects of the order. Disclosures are to be made to the Treasury as soon as is practicable. It is debatable whether the proposed amendment adds anything to the sense of the provision. We consider that Xpracticable" involves a clear test and we should oppose any further qualification. This is an occasion on which I understand what parliamentary counsel is doing.
The obligation can cover banks and other financial institutions engaging in activities that are already regulated in respect of money laundering. Disclosures can provide essential information for terrorist investigation. We consider the requirements laid on
them in the schedule to be entirely consistent with the standards of due diligence that are expected of the regulated sector.
Lord McNally: My Lords, although I understand the way in which the noble Lord, Lord Kingsland, is sprinkling qualifications through the Bill, does the Minister agree that a change of attitude on the part of the regulated is needed? It is clear that our financial services industries have been used—often unknowingly—as part of the terrorist network. There has to be an end to what the police call wilful ignorance in handling these matters, and there has to be a change of psychology through the industries so that they are not used by terrorists in that way.
Lord McIntosh of Haringey: My Lords, I rather suspect that the amendments for which the noble Lord, Lord McNally, voted, and which were agreed to earlier this afternoon, give the lie to what he has just said. I rather suspect that by undesirably and damagingly limiting various parts of the Bill to explicit terrorist activities rather than to crimes that may assist terrorist activity, he has damaged the case that he is now reasonably making. The minor point that I am making on this minor amendment—I do not think that the noble Lord, Lord Kingsland, will be offended by that description—is that Xpracticable" is a perfectly good word and does not need to be qualified by the word Xreasonable".
Lord McNally: My Lords, I should have known better than to proffer an olive branch to the Minister at a quarter to eleven; I should have known that he would hit me over the head with it!
10 45 p.m.
Lord Kingsland: My Lords, bearing in mind the doctrine of Pepper v. Hart, if the Minister does not think that Xreasonably" adds anything to Xpracticable" I am content to beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Kingsland moved Amendment No. 71:
- Page 4, line 5, at end insert Xand must revoke such freezing order if it ceases to have reasonable grounds to consider that the conditions set out in section 4 are fulfilled"
The noble Lord said: My Lords, as the Minister knows there appears to be no protection in the Bill as drafted against the Treasury letting a freezing order run for the full two years even if the reasons for it have fallen away. Amendment No. 71 requires the Treasury to lift the order when the conditions are no longer fulfilled. Therefore the victim of the order has some legal recourse if the Treasury fails to act.
The Minister responded in Committee but was not prepared to accept the amendment. I said:
- XIf the Treasury ceases to have reasonable grounds, in those circumstances, it is hard to imagine any conclusion that the Treasury could reach other than revocation. Perhaps the noble Lord would like to reflect further on this clause before he returns to your Lordships' House at Report stage".
- XI am glad to do that. I always reflect on these matters".—[Official Report, 28/11/01; col. 362.]
Lord McIntosh of Haringey: My Lords, what I did not say is that I tend to reflect at four o'clock in the morning when I suffer particularly from insomnia. It is not very productive and it has not been very productive on this occasion.
Amendment No. 71 provides that the Treasury must revoke an order when the conditions are no longer met. As drafted, the Bill includes a provision stating that the Treasury must keep a freezing order under review. This is a meaningful commitment. As I said in Committee, where there is no longer a need for a freezing order the Treasury will revoke it. Ongoing review will also provide a basis for amending an order where that is appropriate. But an obligation to revoke an order when the conditions in Clause 4 were no longer met could seriously reduce the effectiveness of the power. We can imagine situations where the original reasons for freezing funds no longer apply but there are other good grounds, which have arisen since the original order, for the order to remain in force.
For example, an overseas terrorist who was the subject of a freezing order might move to the United Kingdom. A freezing order cannot be made in respect of a UK terrorist. While often it would be appropriate to revoke the freezing order and use the UK criminal law to target that person, revocation of the order should not be an obligation.
However, we appreciate that this is a serious power. Freezing orders should not be permitted to stay on the statute book indefinitely. That is why we have taken the unusual step of providing for ongoing review by the Treasury with a freezing order lapsing automatically after two years. The order will also be open to judicial review on an ongoing basis. It is not right to say, as did the noble Lord, Lord Kingsland, that the victim has no legal redress.
Amendment No. 72 provides that the Treasury may renew an order. Again, we accept in principle that it may be appropriate to renew an order after the maximum period of two years is complete. Of course it must. But we would wish such a renewal to be subject to the same standards of parliamentary scrutiny as the original making of the order. There is nothing to prevent the Treasury replacing a freezing order under the current drafting. Amendment No. 72 is not only unnecessary; it would weaken parliamentary scrutiny.
Amendment No. 73—the noble Lord, Lord Kingsland, did not speak to it—is about publication in the Gazette. There is no benefit in requiring orders in the Gazette. That would be a very unusual step. That is not the normal procedure with secondary legislation.
Under the Statutory Instruments Act 1946, all statutory instruments are sent immediately after being made to the Queen's Printer of Acts of Parliament to be printed and sold as soon as possible. As an operational matter—I made this point in debate in Committee—financial institutions are notified of the order and the requirement to freeze funds by a circular from the Bank of England. Surely, that is better than placing it in the Gazette, which is read only for very specific purposes.
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