The spirit of our nation includes a sense of wanting to help those in need and wanting to right an injustice. In both those characteristics of our national spirit, we are failing the victims of terrorism abroad. For them, there is no system of assistance, compensation or, in simple terms, justice. Wherever the grieving spouse of a victim or an injured person might be, they are in a country abroad, suffering mentally and physically, culturally adrift and often without the means, either financial or organisational, to remedy their predicament.
Let me explain the facts. We have, over the past seven or eight years, enacted with great force and parliamentary vigour many statutes against terrorism, on the fundamental premise that it is our duty as a Parliament, as a Government and as a nation to protect our citizens against terrorism. We provide protection for those citizens here, after the July bombings in 2005, under the criminal injuries compensation scheme. If they happen to be injured in a European country, each country is now obliged to provide compensation to any citizen of the European Union injured or killed by terrorism in their own territory. There is no such system beyond the United Kingdom and Europe.
Some 10 million or more British holidaymakers travel to countries outside Europe and the United States each year. Some of those were in Bali in October 2002, when 200 people were killed, 27 of them British. Some of those were in Turkey in 2005, when one was killed and half a dozen injured, Again in 2005, at Sharm el-Sheikh, 11 were killed and many more were injured. Those people were targeted because they were innocent, because they were tourists, because they were in a club, hotel or public space with no protection whatever; and they were so targeted to intimidate and create terror. Many countries have refused to accept that kind of threat. The United States, Australia, France, Italy, Sweden, Finland and Israel compensate their citizens for the effects of injury or death from terrorism wherever it
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Those peopleour peopleinjured abroad live here in their ordinary lives, pay their taxes here and act as citizens here, and we should not abandon them when they are injured by coincidence other than being here. At what cost? Doing the best that one can in an unpredictable state of affairs, having regard to what has happened and what might happen, it is thought that £3 million a year would present an adequate fund to meet the needs of such people. It almost embarrasses me to have to justify the expenditure of such a sum in such a noble cause. This state of affairs is a need that we must meet. The Foreign and Commonwealth Office seeks to do it through consular assistance and advice, but not beyond that. We have just agreed to pay £1 million in conjunction with the British Red Cross as an emergency fund, and by that very agreement we have thereby acknowledged the need, which is long term and not just short term.
We are especially concerned that there is insufficient awareness of exclusions in areas such as terrorist acts ... and in particular by evidence that around ten million United Kingdom holidaymakers in 2006 would not have been covered for medical expenses in the event of terrorist incidents.
When people in this country pay for their holiday insurance, they mostly have no idea at all that there is an exclusion for terrorism. When the bomb explodes and their lives are split asunder, there is no insurance.
The British Insurance Brokers Association has recently published a survey showing, from the results that it has been able to find involving 75 per cent of the market, that 78 per cent of policies have a terrorism exclusion clause, some of which will have a write-back provision for medical expensesbut that is an enormous proportion of the market. Some 15 per cent have no exclusion for terrorism and the existence of that 15 per cent illustrates that the risk can be insured, economically and on the open market. That state of affairs identified by the Treasury Committee and the British Insurance Brokers Association means that the insurance market should be the basic source for this kind of advice and assistance. The Bill seeks to use insurance to achieve that objective.
Clause 2 puts on a statutory footing that which is now a conventionnamely, that our consular officials everywhere in the world should have a statutory duty to advise and assist our citizens in cases of terrorist attack and that the Secretary of State should consult and publish the arrangements reached after such consultation.
Secondly, regarding insurance, many of your Lordships will remember the IRA attacks in the City of London in the early 1990s. That led to the creation
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This Bill seeks to create a mirror of that which we thought was necessary to protect property as being the minimum we need to protect people. Clause 3 repeats, almost word for word, the property protection provisions of the 1993 Act and allows the Government to assimilate this scheme into that. It is neat, tidy, economical, practical and there is no reason why it cannot be done.
The fallback position under the Bill is a scheme similar to that for criminal injuries in this country. It is a fallback scheme; it should not be necessarybut the Bill makes provision for it, in case it becomes so, if arrangements with insurers do not bear fruit.
The scope of the Bill is directed at British people who are ordinarily resident in this country, but I realise that there is a problem, as many noble Lords have indicated to mea person engaged in charitable work overseas can be just as much at risk as a transient visitor. The Bill allows the Secretary of State to introduce a wider range of protection than is presently envisaged in Clause 1.
What is the conclusion? I have been sent correspondence by Members of your Lordships' House from across the political parties and the Cross Benches, and from every political party in the Commons. NobodyI stress, nobodyhas suggested that there is anything wrong with this idea. No doubt, that is why in October 2005 the Prime Minister said that the Government would consider a scheme of this kind. This was pursued by Tessa Jowell in her ministerial role. She has been very helpful and co-operative with those who have been involved in seeking to implement these changes. She says that the £1 million that the Government have given is not a compensation schemeit is temporary relief. In a recent letter, she stated:
I recognise that this is not a compensation scheme and that there is a disparity between the state UK compensation scheme offered to those killed or injured at home, and the financial assistance offered to those affected abroad.
I emphasise that this Bill does not make any primary call on public funds. It says to the Government, Do for your people that which you did for your property owners. It does, however, create substantive provisions that allow negotiation and consultation to take place, followed, we hope, by the implementation of a different insurance market covering this risk.
One of our parliamentarians, Toby Ellwood, the Conservative Member for Bournemouth East, lost his brother in the Bali incident. He is quoted as saying that terrorism has no borders and neither should our support for the victims of terrorism. It is unbecoming of our country that this state of affairs exists. We should act before it shames us. I commend the Bill to the House.
The Government currently provide compensation for British nationals who become victims of terror within the United Kingdom. They also provide compensation to non-British citizens of terror in this country; for example, all victims of the 7/7 bombings have been compensated. Compensation is paid by the Criminal Injuries Compensation Authority and total payments amount to about £200 million annually.
Unfortunately, British citizens who are victims of terrorism overseas are not compensated unless they are in a country where compensation arrangements already exist. Over the past decade, British citizens have been killed or injured in a number of overseas territories. There is considerable hardship in these cases and there is therefore a need to set up a scheme whereby payments are made.
Insurers who provide travel cover are committed to paying claims as quickly as possible, but it must be pointed out that travel insurance is not primarily designed to cover personal injury or death claims. A travel insurance policy is a package-type of insurance providing cover under various sections, including personal accident, medical expenses, baggage, cancellation and curtailment benefits, loss of personal money and personal liability. Cover in regard to death, injury and long-term care are more appropriately provided under personal accident, life insurance and income protection policies.
Travel insurance is very competitively priced, but the more you add on, the more it will cost. We believe that one-third of travellers who go abroad from the United Kingdom do not effect travel insurance and they therefore expose themselves to considerable risks if things go wrong. Insurers would like to provide as much cover as possible at a competitive price to encourage people to effect cover. Unfortunately, however, only about 66 per cent of people take out policies, which is not satisfactory.
Practice among insurers regarding terrorism varies and can be summarised as follows: first, no cover at all; secondly, only medical expenses and repatriation cover following a terrorist attack; thirdly, medical, repatriation and personal accident cover for terrorism except in cases of nuclear, chemical or biological attacks; fourthly, personal accident medical expenses
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Those standard covers are available to all policyholders, but insurance is available for both travel and personal accident to people who wish to travel to countries where there is a danger of terrorism or hostilities. Insurers underwrite that separately and the premiums are high. There is therefore special insurance to cover terrorism abroad, which provides appropriate benefits.
I feel that proposals to provide insurance generally to everyone would be difficult to implement. There are several factors in this regard, which can be summarised as follows: first, there is a question of cost and how the premiums are to be assessed; and, secondly, for a scheme to be meaningful, it needs to be made compulsory. The only compulsory insurances in the United Kingdom are employer's liability and motor insurance for third-party risks; in other words, cover is mandatory where there is a possibility of death or injury to other people. A number of drivers do not effect motor insurance, despite road traffic legislation, and payments for their liabilities are paid by the Motor Insurance Bureau, an organisation set up by insurance companies and funded by levies on the insurers.
I have already pointed out that at present one-third of people who go abroad do not take out travel insurance, and compulsory insurance requirements would therefore be difficult to implement and difficult to police. Arrangements for insuring property damage and business interruption caused by terrorism in the UK came into force in 1993. Prior to that, insurers were unwilling to provide full cover for terrorism and cover was granted with limited indemnity liability.
The Reinsurance (Acts of Terrorism) Act 1993 was enacted to address the provision of full cover, and Pool Re was set up as a response to the Act. HM Treasury is the reinsurer of last resort for Pool Re, protecting it in the event that it exhausts all its financial resources following payments.
Since 1993, Pool Re has made payments of £612 million and has reserves of £1.664 billion. Insurance cover for policyholders provided under the Pool Re arrangement is optional, and policies are taken out by property owners who can afford the premiums. Therefore, the insurance is not compulsory. However, there would be a problem of affordability with regard to overseas travel cover for the general public, and, as I said earlier, to be meaningful, it would need to be mandatory.
I have heard people say that reserves built up by Pool Re could perhaps be released to pay for injuries to people who travel abroad. As I have said, Pool Re has reserves of more than £1.6 billion, but I believe that the release of these funds would be unwise as the reserves are necessary to pay large claims following a major incident or incidents occurring in future. I may add that the damage at Canary Wharf, Baltic Exchange and the Arndale centre was in excess of £1 billion each. Furthermore, it could be argued that the premiums have been paid by policyholders who have insured their properties, and to use them for any other purpose would not be appropriate.
There is another option regarding funding, which is to apply a levy of some sort, which could be considered. If such a levy were applied, it would be considered as a tax on holidays and travel. A levy would therefore cause difficulties and not be very popular. I therefore feel that compensation for injuries for terrorism overseas can be considered as an extension of the Criminal Injuries Compensation Authority arrangements. The existing scheme is successful; matters are investigated fully and fraudulent claims are resisted. At present, payments under the compensation scheme are made under the Home Office budget, which may have been frozen by the Chancellor.
In October 2005 the Prime Minster announced that the Government were looking at setting up a separate compensation scheme to cover British victims of terrorism overseas, and perhaps this matter can be pursued further. I understand that there are compensation schemes operating in other countries, which are funded by their governments. It remains to be seen if there is the political will to arrange state-run schemes in the United Kingdom and whether funds can be made available to implement the scheme. The mechanism is, however, here to process the claims.
The cost of the scheme will, of course, depend on the scale of benefits, who will be the beneficiaries and the number of incidents involved. I understand that a figure of £3 million has been suggested, and I am not sure if this will be sufficient. I add a note of warning that, if consideration is given to extending the Criminal Injuries Compensation Authority scheme to pay for terrorism overseas, there could be a demand that the scheme should be extended further to pay for victims of all violent crimes overseas.
Baroness D'Souza: My Lords, I strongly support this Bill and hope that it will find its way on to the statute book very soon. I congratulate the noble Lord, Lord Brennan, on bringing it forward. The arguments advanced to justify it are compelling; the benefits are immeasurable and the political and financial cost to the Government appears to be virtually nil.
However, I should like to outline a case for widening some of the definitions in the Bill. I have discussed this briefly with the noble Lord, Lord Brennan, and he took note of that in his opening speech. I understand why the definitions in the Bill prevail, but nevertheless, I should like my concerns to be on the record.
which would preclude those UK victims temporarily working in the Wall Street district of New York City on 9/11, who may well have become non-resident for a matter of a few months. I therefore suggest that the legislation should apply to British citizens generally, and not only to those resident in the UK. Again, I acknowledge that the noble Lord, Lord Brennan, addressed that.
Secondly, the definition of the victim is construed so as to include only those who suffer injury as a direct consequence of a terrorist act such as the Bali bombing or that in Sharm el-Sheikh in 2005. However, we all know that immediately following such an outrage, local authorities round up potential suspects, who eventually may, and indeed do, turn out to have been completely innocent bystanders. They are detained and all too often tortured with the aim of getting a confession. They, too, are victims and could perhaps be included in the definition as individuals who have sustained injury as a direct result of an act of terrorism or unlawful counter-terrorism measures constituting crimes under international law.
If those amendments were accepted, it would be logical to replace the heading in Clause 2, Advice and Assistance, with Advice, Assistance and Protection. That implies that at times there would be an obligation to afford diplomatic protection that goes beyond mere advice or assistance.
In addition to extending the scope of the definitions in the Bill, the question of the compensation of victims suffering injury overseas invokes some consideration of the role of the UK Government through their diplomatic representatives in not only assisting victims but preventing any possibility of abuse such as torture. Now, it may well be concluded that adding this dimension would stretch the Bill beyond acceptabilityit probably willnevertheless, I wish to take the opportunity to at least outline the kind of difficulties that victims face when caught up in arbitrary and terrifying actions on the part of foreign Governments, and in so doing I acknowledge the great contribution to this area of law by the Redress Trust.
Let me give a short and hypothetical examplehypothetical but culled from real-life experiences. A young British citizen of north African origin is arrested following a terrorist incident in Egypt. He is detained at the local police station. As a British citizen, and under international law, he has a right to humane treatment, to be free of torture and to have access to a lawyer. Under the UK rules applying to international claims governing diplomatic actions, he should be visited by a representative and his safety guaranteed while investigation takes place and before any charges are brought. The likelihood of the detainee being tortured in countries such as Egypt is extremely high; and the international standards on human rights should be the benchmark for consular or other diplomatic staff actions.
However, and here again I emphasise that this example reflects the reality of several cases, under UK domestic rules there is no obligation to protect the individual or pay reparation if to do so would be contrary to broader foreign policy needs. In other words, the interests of the state always come first. Since the UK has not incorporated the doctrine of diplomatic protection into its domestic legislation, the rules are in fact a statement of general policy and have no effect in law.
Apart from this gap, torture survivors also report a depressing litany of failures on the part of officials, including, for example, insufficient warnings to travellers about human rights violations in certain countries. In
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