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Lord Vinson: My Lords, the point I was trying to make was not that the FSA does not hold its meetings in public but that it holds them like a circus in public—88 people and a huge gathering, with no one allowed to speak for more than two minutes. It is such a farcical way to take decisions. That is the point I was trying to make.

Lord Macdonald of Tradeston: My Lords, I thank the noble Lord for that clarification.

The noble Baroness, Lady Flather, referred to complexity and risk aversion and asked whether matters have gone too far. Again, I recommend the reading of a recent document. It is an area that we take very seriously. The noble Baroness talks about red tape surrounding doctors; but when a case arises such

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as that of Harold Shipman, inevitably more regulation is demanded. However, we have put our public sector team into the doctors' surgeries and they have come out with dozens of recommendations to try to remove that red tape. I take the point that there is far too much paperwork for doctors, just as there is for teachers and for the police. We are working in all of those areas.

Baroness Flather: My Lords, I accept that there are exceptional cases which need exceptional treatment, but the mistake is to think that by providing for one exceptional case we can control everything. Exceptional cases will continue to arise, and over-regulation as the result of an exceptional case catches everyone. This happened even under the Tories in regard to local government. I recommend that we should treat exceptional cases as just that.

Lord Macdonald of Tradeston: My Lords, sometimes exceptional cases throw up areas where regulation is required, but I was attempting to agree with the general thrust of the noble Baroness's remarks. Society is more risk averse now. It is also safer in many areas. Our roads are much safer. The situation is much safer for workers on the railway; but I have no doubt that the costs of rail construction have risen because of safety demands. These matters have to be balanced, as I am sure the noble Baroness will understand. We do not want to "gold-plate". That is one of the messages that we have sent in to our debates in Europe about better ways of doing things there. Yes, of course, our Civil Service has a great deal of integrity in the way in which it carries through legislation. I do not think that we should necessarily want that to be compromised, but I am quite prepared to do battle if there is any over-compliance there. I hope that we shall be able to answer the noble Baroness's question about whether we have improved health and education with a resounding "yes" before this term of government ends.

I turn to the well-informed points made by the noble Lord, Lord Garel-Jones, about governance, particularly in the City. As to consultation, there was a recent Cabinet code of practice on consultation. The evaluation indicated a very low level of complaints about individual consultations. The range of matters used to supplement written consultation was quite wide: we have web debate forums and so on. So we have been working in many of the areas about which the noble Lord is concerned. I have mentioned gold-plating, and there is the covering of all forms of commercial risk—I return to the Cabinet Office document. The over-burdening of the regulators is presently being addressed by the Better Regulation Task Force. I strongly agree with the thrust of the noble Lord's remarks, but I should disagree with any implication that the regulatory impact assessments were not effective. They can be made better, and we are working on that.

I see that the time allowed to me is almost up. I recommend to the noble Lord, Lord Plumb, a reply given by my noble friend Lord Whitty earlier this year to the noble Baroness, Lady Byford, in regard to some aspects of regulation relating to the agricultural industry.

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The noble Lord, Lord McNally, offered a measured analysis. I agree with much of what he said. He knows that the Government are committed to a Civil Service Bill, but the role of the Cabinet Office is one of nurturing a whole range of units, most of them led by civil servants. Sir Andrew Turnbull has taken that over and is driving it with great vigour. We await the suggestions of the PASC sub-committee and of the Wicks committee.

The noble Baroness, Lady Wilcox, has had a distinguished business career and I listened to her remarks with great interest. I shall not follow her into Treasury territory. Fundamental reform is what we are about. I believe that the great range of measures in which we are engaged in terms of regulation should help.

4.55 p.m.

Lord Peyton of Yeovil: My Lords, I thank all of my noble friends who have taken part in the debate, and particularly my noble friend—I do not always say this—who is such an ornament on the Front Bench. I appreciate what she was kind enough to say.

The noble Lord, Lord McNally, is quite wrong in thinking that I spend my weekends shooting pheasants. It is more than 40 years since I even tried to shoot one.

Lord McNally: My Lords, perhaps the noble Lord might think of me as a different kind of ornament then.

Lord Peyton of Yeovil: My Lords, I did say that if it came to shooting, there are one or two people whom I should like to shoot straight at.

In the few minutes allowed to me, I am bound to concentrate mostly on the noble Lord, Lord Macdonald. I always welcome him on the Bench opposite because I have the odd feeling that, unusually, he has ears. That does not make him remarkable. But what does make him remarkable is the fact that he is a Minister who knows what ears are for. He actually listens. Even more remarkably, from time to time he actually does something, and that is very welcome.

I was, however, slightly disappointed by the noble Lord's opening remarks. He opened with a tremendous burst of small-arms fire in the form of statistics. I felt very sorry that I had not brought my umbrella with me, because I needed to protect myself from the shower.

I have two or three brief points to make. First, I have come to suspect that there is no one in the Government who knows how to add up. They specify the great benefits that they have conferred on the needy and then say, "Of course, no one would grudge that sort of money". Perhaps no one would. But we are worried about the cumulative burden of all the benefits that the Government so nobly and generously confer at other people's expense. That is the worry, and I hope that the Minister will take the point.

The Minister mentioned the magic word "consultation". Only recently I have been told of cases of consultation where the person consulted was very much against the proposals and was told, "Well, it

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doesn't really matter what you think. We're going to do it anyhow". I refer to a small business in Trafalgar Square which is such a source of contentment and satisfaction to everyone who tries to use it.

If the Minister would be kind enough to give me a copy of the Cabinet Office paper he mentioned, the title of which I did not hear, I should be very grateful. One never knows, I might learn from it. I previously invited him to, "Read, mark, learn and inwardly digest" the book Small is Beautiful. I repeat the invitation. I couple with that a suggestion that, when the Minister is feeling strong in stomach and head, he might even cast an eye over the Civil Service Yearbook. He will find there traces of smugness. He will also find that tendency which characterises almost every action of this Government: to confuse promise with performance. It is a mistake that goes on all the time. I do hope that he will read it, and I hope that he will not feel too ill after doing so.

The time has come when I must withdraw the Motion. I certainly have absolutely no desire for any papers, so I shall do so. But I very much hope that something of what I and my noble friends have said will have sunk in—I know that the noble Lord is receptive. I hope that he might persuade his colleagues every now and again to look before they leap. I beg leave to withdraw the Motion for Papers.

Motion for Papers, by leave, withdrawn.

Bali: ISC Report

5 p.m.

The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Baroness Amos): My Lords, I wish to repeat a Statement made in another place by my right honourable friend the Foreign Secretary.

    "With permission, Mr Speaker, I should like to make a Statement about the report published today by the Intelligence and Security Committee in respect of the terrorist bombings in Bali on 12th October.

    "This inquiry was established at my request as I announced on 21st October. I said then that I would be making available all relevant intelligence to the ISC so that it could make its own independent assessment of the facts.

    "The committee has since reviewed all intelligence relevant to Bali and taken evidence from the heads of the agencies, other officials, my right honourable friend the Home Secretary and myself. The House will be aware that my right honourable friend the Home Secretary is currently indisposed, recovering from an operation.

    "The Government welcome the report and I am very grateful to my right honourable friend the Member for Dewsbury, the chairman of the committee, and her colleagues for all their work. We

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    will consider their recommendations carefully and let the committee and the House know of our final conclusions as soon as possible.

    "I know that the entire House will join me again in extending our deepest condolences to the relatives and friends of the victims of this terrible act. Special arrangements have been made today to contact the next of kin to tell them of this report.

    "As the report has only just been published, it may be helpful if I briefly summarise it and then tell the House of the Government's initial response.

    "The committee's report broadly covers four questions. Let me deal with them in turn. First, was intelligence collection in Indonesia of a sufficiently high priority? The report says that sufficient priority was given to intelligence collection in respect of Indonesia. That was in spite of the fact that, since 11th September last year, the volume of intelligence available to the agencies has increased,

    'by a factor of at least ten',

and that during the period in question the agencies received at least 150 separate reports a day.

    "The second question is: was any intelligence overlooked? This question, it will be recalled, was one understandably raised by the relatives and friends who lost a loved one in the atrocity on 12th October. The committee concludes that it has:

    ' . . . not seen any intelligence that described or directly related to any form of terrorist attack on Bali on or around 12th October 2002',

and that on the basis of the available intelligence,

    'there was no action that the United Kingdom or its allies could have taken to prevent the attacks'.

    "The third question is: did the Security Service make the correct assessment of threat levels on the available intelligence? The committee's report covers three areas. It says that the Security Service's current six levels of threat assessment do,

    'not provide a sufficiently clear definition of the threat to be of use to customer departments'.

It questions why, in the wake of a failed grenade attack against a US diplomatic property in Jakarta on 23rd September, it took the Security Service over two weeks to issue a report on Indonesia; and it says that because there was intelligence of a terrorist threat in Indonesia, because there was a possibility of displacement of targets, and taking into account,

    'the reluctance of the Indonesian authorities to deal with terrorism',

the Security Service made what the committee says was a 'serious misjudgment' in failing to upgrade its assessment of the threat to British interests from 'significant' to 'high'.

    "The staff of the Security Service have to make fine judgments based on fragmentary intelligence and other information. In the absence of any specific material in the period preceding the Bali bombing, the service had assessed the threat to general British interests in Indonesia to be significant. As a result, the security climate was judged to be such that UK general interests were likely to be a priority target.

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    "As I know the Intelligence and Security Committee itself fully recognises, the staff of the Security Service are dedicated people who work to the highest professional standards. They are never able publicly to justify or to defend themselves. But they—and we—must also be properly accountable for what we do and we will of course take the committee's recommendations on board.

    "Against the background of the increased global threat of terrorism, the Security Service began earlier this year to review the system of threat assessment. That work will now be informed by the committee's findings and will be brought to an early conclusion. My right honourable friend the Home Secretary leads on this. I know that he will ensure that the ISC and the House are kept fully informed.

    "Let me now turn to the fourth set of conclusions of the committee—those concerning the FCO's travel advice. The committee says that the travel advice at the time of the Bali bombing did not accurately reflect either the threat or recent developments in Indonesia. However, it says that the advice issued was 'proportional' to the assessment of the threat made by the Security Service, to which I have just referred. It also says that, generally, travel advice is not communicated to the public and travel industry effectively, and that the whole purpose of FCO travel advice should be reviewed.

    "Our travel advice is widely used by individual travellers and the travel industry, with some 670,000 visitors to our website this month. In the wake of the Bali bombing, I have put in hand a comprehensive review of the way in which our travel advice is both prepared and presented. We have already made some improvements and will be making further changes, drawing on the committee's helpful recommendations.

    "The purpose of travel advice is to provide reliable information to British travellers and residents overseas. It is vital that our advice is based on the assessments made by the Security Service. The intelligence agencies are based placed to evaluate the terrorist threat to British nationals both at home and overseas. That often involves difficult judgments, where we have to ensure that travellers are warned of threats that we assess to be credible, while not causing panic by overreacting to unsubstantiated pieces of information.

    "It is worth underlining that this often requires a really difficult judgment. The safety and well-being of our nationals abroad is our prime concern. But, as my right honourable friend the Prime Minister said last month, we must aim,

    'to take preventive measures without destroying normal life'.

If, rather than properly seeking to separate truth from fiction, the Government treated every terrorist threat as accurate, on many occasions in recent months we would have had to shut down roads, shopping centres, airports, factories and military installations. That would serve only to cause panic—precisely the circumstances that the terrorists are striving to create.

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    "We are always looking for ways to do this job better, to work more closely with our allies to ensure that collectively we do all we can to protect our citizens from the threat of terrorism, while allowing people to live, as far as possible, normal and free lives, uninhibited by unnecessary or exaggerated fears. But I should also remind the House of a sobering point about intelligence. By its very nature, when it works, which is usually the case, the public rarely get to hear about it, but there will always be exceptions—instances where, despite our best efforts, the terrorists slip through the intelligence net.

    "The tragic lesson from Bali is that British nationals are targets of terrorism in many parts of the world. The message for the Government is that we must all exercise constant vigilance if we are to avert future such tragedies.

    "I know that I speak for the whole House when I say that we will never bow to the evils of terrorism. Its purpose is to undermine the very foundations of our free and democratic life, and our campaign against it will continue to be unrelenting both here at home and overseas".

My Lords, that concludes the Statement.

5.10 p.m.

Baroness Rawlings: My Lords, I thank the Minister for repeating the Statement made in the other place by her right honourable friend the Foreign Secretary. We on these Benches should like, first of all, to extend our sympathy to the families of those so brutally murdered. We welcome the report and its contents. It is a very serious report with very serious implications for the security of British citizens abroad. We owe great gratitude to the members and the chairman of the committee for producing it so quickly. I also join the Minister in paying tribute to the dedication of our security services, who work very largely unthanked and behind the scenes.

At the time, we called for the ISC to investigate what information had been available prior to the Bali bomb. We also asked that there should be a full debate on the report. I hope that, notwithstanding this Statement, the Government will make time for one. We referred to John Howard's belief that we have an "obligation" to have the procedure "thoroughly examined". Today's report supports that view, and its recommendations largely endorse the actions that we called for at the time of the Bali bombing. As the report indicates, there are serious lessons to be learned from Bali. There are a number of urgent recommendations relating to the security services and the FCO. These must be responded to swiftly, comprehensively and sufficiently openly to restore public confidence in the advice that flows from their activities.

One of the major deficiencies highlighted in today's report concerns the level of threat grading. The committee calls for the gap between the level "significant" and the level "high" to be addressed. Can the Minister tell us whether the Australians and/or the Americans grade their threat assessments in the same way? Can we learn from them?

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Were early lessons, even preceding this report, learned from Bali? The Australian Government do seem to have learned lessons from Bali. Ahead of the attack in Mombasa, on 28th November, they warned their citizens:

    "to defer from non-essential travel to Kenya".

All the Foreign Office warned was that,

    "there may be an increased terrorist threat".

There is a very substantial difference.

Further, in mid-November, the Australian Government warned that,

    "threats against Westerners and Western interests in Mombasa are high".

What was the FCO warning? Why was Mombasa not mentioned? Why was travel advice not changed until my right honourable friend Mr Michael Ancram wrote to the Foreign Secretary, on 29th November, raising the disturbing similarities to the much criticised action taken by the Foreign Office in the run-up to the Bali bombing?

Does the Minister agree that it is important that the public can have confidence in the travel advice issued by the department, and that this report must be acted on to restore lost confidence? The inconsistency between the United Kingdom and Australia may have dented that confidence yet further. What steps are being taken to improve consistency? Was our intelligence in relation to Bali and Mombasa the same as that available to the Australian Government? Were the threat assessments the same? If so, why, on the first occasion, did we give the same travel advice, but, on the second, different travel advice? Has the Minister considered a more joined-up approach to the issuing of travel advice? Should not countries such as the US, Canada, Australia and the United Kingdom consider a joined-up approach?

Has the noble Baroness also considered the effect of Foreign Office travel advice on the validity of travel insurance claims for holidays cancelled as a result of the advice given?

This report refers to insufficiency of information to prevent specific terrorist incidents. However, does the Minister not agree that there may frequently be insufficient information to prevent an attack, while sufficient to establish a threat to British interests, which should be reflected in travel advice? Was this not the case in relation to Bali, and even more to Mombasa? I urge the Minister to heed the words of the committee when it concludes that,

    "the whole issue of travel advice, its purpose, target audience and presentation needs to be examined . . . as a matter of urgency".

Will the Minister assure the House that the Government will waste no time in implementing all the recommendations of this report? I agree with the Minister—I am sure that we would all agree—that we will never bow to the evils of threats or terrorism.

5.16 p.m.

Lord Wallace of Saltaire: My Lords, we on these Benches also thank the Government for repeating the

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Statement. I recall that the Minister was involved in the aftermath of the Bali events and had herself to deal with many of the consequences affecting British citizens. My family and I were on holiday in Bali only a short while ago and I was very conscious of the sensitivities while we were there.

One of the long-term lessons we all have to learn is that there is no absolute security for holidaymakers either at home or abroad, and the Government are going to have to educate British citizens to live with a slightly higher level of risk. Those of us who have lived in London for the past few years have indeed grown used to that, as we remind our American friends when they say that they are suddenly threatened by terrorism. It is part of the way in which governments must learn to re-educate their citizens.

We all recognise that we are dealing with a long-term problem and that this is not the last incident in which the Government's advice will be challenged. Part of our response to the report must therefore be to ask what we can learn from the incident and how we can prepare for future occasions when the appropriate level of advice will again be in question.

I did not see in the Statement—perhaps I missed it—an answer to the question about an additional level of threat assessment. That was one of the strongest points made in the report. I should therefore like the Minister, please, to deal with it. The Statement does not fully address the issue of the link between ISC assessment and FCO travel advice and how the two fit together.

Timing is one of the most difficult issues. Holidaymakers tend to book their holidays three to six months in advance. The question is whether the Foreign Office travel advice should have been changed over one to two weeks. That gives rise to various questions about the extent to which the Government should work with the travel industry—through which many of those people booked their package holidays—and whether they should tell people, just before they travel, that there may be a heightened risk level. We are also conscious that there has to be a careful balancing of advice. We do not want to frighten British citizens from travelling abroad. We also recognise the enormous importance of tourism to developing countries.

I have a few brief questions. We have talked about co-operation with Australia, the United States and Canada. Many British citizens go on holiday to Morocco, Tunisia, and now even Libya. Co-operation with other European intelligence services seems to be rather more important for such travel. How far are the Government expanding co-operation on travel advice to cover a number of other countries, particularly in the Mediterranean and the Middle East, where security levels are, sadly, open to question?

We believe that one of the lessons to be learnt is that the ISC itself needs to have a strengthened and more public role in maintaining public confidence. We on these Benches have argued for a long time that the ISC should become a formal parliamentary committee answerable to Parliament and could perhaps have rather more Members from this Chamber. I hope that

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the Minister will tell us whether strengthening the role of the ISC is being considered. But, having said all that, we must recognise that there is no absolute security for British citizens and that the intelligence services have to make very fine judgments about short and long-term risks.

5.20 p.m.

Baroness Amos: My Lords, I shall do my best to answer the questions that have been raised. I shall start by responding to the wider questions raised by the noble Lord, Lord Wallace of Saltaire.

I entirely agree with the noble Lord that we shall have to do a much better job of educating our citizens in this regard. We have already begun discussions within the Foreign Office on how we might undertake such a task. The noble Lord is right to say that we cannot guarantee absolute security. However, we need to ensure that we give information in as clear a form as possible and in a form that our citizens are able to use. The noble Lord asked about an additional level of threat assessment. That matter was addressed briefly in the Statement. It is the responsibility of the Home Office. My right honourable friend the Home Secretary has begun a review of threat assessments and will take that recommendation on board in that review.

We work closely with the travel industry. We have a campaign, "Know Before You Go", targeted at the travel industry and at different kinds of travellers. That campaign is increasingly reaching members of the public. When travel agents receive information about a change in our travel advice through the "Know Before You Go" campaign, they undertake to inform travellers about it just before they depart. Clearly, we can do that more effectively. Some people are able to receive regular updates of our travel advice by e-mail. We need to encourage more people to do that. On this matter we work with our allies, including the European Union. I am sure that a strengthened and public role for the ISC is being considered although that does not fall within my remit.

The noble Baroness, Lady Rawlings, asked me a number of questions. As regards the possibility of a debate on this matter, the noble Baroness will know that I cannot possibly give commitments about the scheduling of issues in this House without incurring the wrath of my noble friend the Chief Whip and the usual channels, but I am sure that the noble Baroness's point will have been heard by the usual channels. I assure the noble Baroness that we share information with our allies. However, there will be differences in advice. We share information, but we each make a judgment with respect to that information.

As regards the noble Baroness's point about Kenya and differences in advice, I assure her that the Australian Foreign Minister has confirmed that the Australians received no specific intelligence to enable them to predict what happened in Mombasa. We received the same advice as the United States. Clearly, we arrived at different judgments. We aim to ensure that we work more closely with our allies with respect

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to that matter. However, I say to the noble Baroness that despite working more closely with our allies, we may still reach slightly different judgments. However, I take the point that liaising more closely is important.

I agree with the noble Baroness that our citizens need to have confidence in our travel advice. However, as I said to the noble Lord, Lord Wallace of Saltaire, we also need to ensure that our citizens are aware that while in giving that advice we try to be as clear and accurate as possible, it is not possible in the world in which we now live to ensure in security terms that possibilities do not arise for which we have not been able to plan.

The noble Baroness suggested that we should be more joined-up. We recognise that. We are already working more closely with our allies. I confirm that we shall consider the report's recommendations. A wholesale review of travel advice is already taking place within the Foreign Office. That was asked for by my right honourable friend the Foreign Secretary. Some of the outcomes of that review are already feeding through into our processes.

On the noble Baroness's final point about travel insurance, travel companies use the Foreign Office travel advice in making decisions about travel insurance. But that is not a direct link that we have established; it is something that the industry has decided to do on the basis of the advice that we give.

5.26 p.m.

Lord King of Bridgwater: My Lords, I welcome the Statement repeated by the Minister. I welcome particularly the work done by the Intelligence and Security Committee on this particular inquiry. As the noble Baroness may know, I had the privilege of chairing that committee for its first seven years.

The noble and learned Lord the Leader of the House and I remember the Mitrokhin inquiry with which we were involved in different incarnations. The noble Lord, Lord Wallace of Saltaire, referred to the role of the committee. I have some sympathy—not simply because my role has changed—with the notion that this House could be better represented on the committee than has been the case in the past. I believe that Members of this House have a contribution to make to it. In no sense do I seek a transfer or a place on the committee as I have served on it for long enough.

One fact of which I was not aware in all my time as chairman of the committee, but which struck me when I heard the Statement, was the number of visits paid to the Foreign Office website last month alone. The noble Baroness mentioned a figure of 670,000. That is a staggering figure and shows how critically important is the quality of that information. Of course we share intelligence closely with Australia and other friendly countries but we make our own assessments. It is sometimes embarrassing when both assessments are made public. Alexander Downer is a most respected Foreign Minister. His statement was carefully worded; that is, that the Australians had no specific information about Mombasa. However, they referred to Mombasa by name, whereas the Foreign Office did not consider it necessary to do so.

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I understand that these are in many ways political decisions. A major conference and exhibition, World Travel Market, has just taken place. I declare an interest as I am involved in the ExCel exhibition centre in London Docklands where it took place. I refer to the economic importance of tourism to a whole raft of different countries for which it is virtually their only source of real foreign exchange. Consequently, an over-cautious and unfair assessment of a particular country can absolutely devastate its economy.

I do not underestimate the challenge that is involved here but I stress the importance of considering the matter—I apologise for speaking at length—of Foreign Office advice and taking an independent look at it. It has perhaps been a less regarded area up to now, but it needs to be considered as in the changed and more threatening world in which we live it has become a hugely important factor.

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