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Amendments 3 and 6, which were tabled by the noble Lords, Lord Goodlad and Lord Pannick, and the noble and learned Lords, Lord Mackay of Clashfern and Lord Woolf, seek to qualify the provision in the Bill by inserting further requirements on the defence to the offence of bribery for the secret services and the Armed Forces. Amendment 3 amends Clause 10 in order to make it impossible to prosecute a member of the Secret Services or the Armed Forces for bribery if their conduct was specifically authorised by the Secretary of State. Amendment 6 inserts a new clause, after Clause 13, requiring the Secret Services and the Armed Forces to keep records of all acts that would constitute a bribery offence were it not for the provision in Clause 13.

We are minded to favour the approach put forward by the noble Lord, Lord Pannick, in Amendment 3. We have accepted the position that there needs to be a defence against the offence of bribery for certain classes of person. Those classes have been debated and amended, and now consist of the Armed Forces and the intelligence services. We have accepted that there are circumstances when men and women who are acting in the interests of the United Kingdom may need to perform acts which ordinarily would not be permitted.

The supporters of Amendment 3 have identified some principles which need to be upheld, notwithstanding our acceptance that some latitude needs to be shown for persons operating in the country's best interests, in

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what may be very challenging circumstances. It is fair to say that bribery by the state, which is effectively what Clause 13 would allow as a defence to general offences of bribery, is so important a matter of public interest that the Secretary of State, as the Minister responsible-and directly answerable to Parliament for his actions-must be involved in its prior authorisation.

On Report, my noble and learned friend, Lord Mackay of Clashfern, made the powerful argument:

"The rule of law suggests that the Government should obey the law like everyone else".-[Official Report, 2/2/10; col. 162.]

Any derogation from this principle should need explicit authorisation.

Amendment 3 requires that the Secretary of State must consider what he is prepared to authorise. Ahead of any use of the state's powers to commit bribery with impunity, the Minister who is answerable to Parliament must give thought to what those powers will be used for. The amendment will require the active participation of the correct authority, and I can see much constitutional merit in that argument.

The Government have told us before that they want safeguards in place so that officers and agents of the state are not left in a position where they do not know whether or not their actions amount to criminal conduct. We agree that Amendment 3 will do nothing to weaken the certainty given to members of the Armed Forces and intelligence agencies. Rather, we believe that the certainty that they were acting correctly would be strengthened by subjecting their possible actions to prior authorisation.

We are also not particularly swayed by the argument against Amendment 3 made by the noble Lord, Lord Foulkes of Cumnock, and the noble Baroness, Lady Whitaker, that a system of prior authorisation would be too cumbersome. The Government have already laid their own amendments to limit the groups of people to whom Clause 13 would apply. From our reading of Amendment 3, there is nothing which would prevent a class of acts, operations or persons being granted prior authorisation.

As the thoughtful speeches made by noble Lords today have shown, this is not an easy issue, and there are powerful arguments to be mustered on either side. Perhaps it is even fair to say that there are more than two sides to this argument. However, having listened carefully to what noble Lords have said, we are persuaded that the course laid out by the noble Lord, Lord Pannick, and supported by the noble and learned Lord, Lord Woolf, my noble friend Lord Goodlad and my noble and learned friend, Lord Mackay of Clashfern, is the most appropriate to follow. We will therefore give Amendment 3 our support in the Content Lobby if noble Lords are minded to test the opinion of the House.

The Parliamentary Under-Secretary of State, Ministry of Justice (Lord Bach): My Lords, I thank all noble Lords who have spoken in this debate. I also thank them personally for their very kind remarks and say what a pleasure it is to be across the Dispatch Box from the noble Baroness, Lady Hanham. It is a long time indeed since we last faced each other across the Dispatch Box, and I will have something to say in a

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moment about the change of view of the Official Opposition. That does not take away from how pleased I am to be debating with her again.

With these amendments, we return to the issue of prior ministerial authorisation of conduct by the intelligence services or Armed Forces that would constitute bribery under the Bill. At this stage of the Bill-I remind noble Lords that this is Third Reading-it is probably not helpful to dwell too much on the specifics of each of these amendments, but instead I shall address my remarks to the general approach that they seek to adopt in place of, or in addition to, what is currently in Clause 13. However, later on, I shall make a few observations on the details of the amendments. I also think it is incumbent on me to answer the points made by the noble Lord, Lord Thomas of Gresford. For the life of me, at first blush I cannot see why, if other amendments are acceptable at Third Reading, his is not, and vice versa.

Lord Thomas of Gresford: My Lords, I am most grateful to the noble Lord for saying that. We are at one on that. I think he appreciates that all I am doing is rephrasing what he wants to do but in a sensible way.

Lord Bach: My Lords, I do not think that the noble Lord is rephrasing at all. It is doubtful whether either set of amendments is fully in line with the guidelines set out in our rules. This is how things have ended up.

I readily accept that there are different approaches to this issue, as the noble Baroness said a few minutes ago. One approach would be to provide for a blanket exemption for conduct by the intelligence services and the Armed Forces. A second approach is to provide a defence, so that a person who would otherwise be guilty of an offence under the Bill will not be guilty of an offence in the circumstances where the defence applies. After careful reflection, that is the approach that we have adopted in Clause 13. I readily accept that it is a departure from the approach in the draft Bill, but as with the Constitution Committee, particularly in regard to the Armed Forces and prior authorisation, our thinking on this has developed over time in close consultation with the intelligence agencies and the Ministry of Defence. The third approach, which is the one favoured by the members of the Constitution Committee of this House and the noble Viscount, Lord Colville, is an authorisation scheme. We also have hybrid models which seek to marry up an authorisation scheme with the defence.

I do not suggest that one or other model is clearly the right one, while other models are wrong. Of course, a case can be, and has been, made for each one. However, after careful and extremely extensive deliberation, including with the intelligence services and the Ministry of Defence, we are satisfied that the defence provided for in Clause 13 provides the right mix of transparency, accountability and operational practicality.

It is incumbent on me to explain why we do not agree with the noble Lord, Lord Thomas of Gresford, that it would be impossible for a defendant to be able to run a defence fairly. The noble Lord argues that the defence is not an appropriate model for dealing with

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this issue on the basis that it would not be possible in practice for a person to establish the defence. He has also suggested that the operation of such a defence would create too many difficulties in practice. We do not agree. First, these arguments do not recognise the reality that cases which genuinely fall within the scope of the defence in the Bill are most unlikely to come before the courts at all. Where any case came to the attention of the police, they would, of course, be provided by the agency concerned with any material relevant to their investigation. That may well result in the police not taking the investigation any further forward on the basis that the case plainly falls within the terms of the defence. Where a case does reach the Crown Prosecution Service, it would have available the relevant material and would take it fully into account in deciding whether to bring a prosecution. A prosecution will not be brought where it is clear that the defence applies, as there would be no realistic prospect of conviction. The evidential test in the Code for Crown Prosecutors would not be met in such a case.

What of the situation where a case is brought to court and a person wishes to rely on the defence? In our view, the suggestion that it would be impossible for a person in such a case to establish the defence is wrong. There is no legal or practical reason preventing a defence being established. The criminal courts are well used to dealing with cases where sensitive information is involved. All the usual criminal procedures will apply. The defendant would, no doubt, seek disclosure of any relevant material held by others that he believed supported his case.

4 pm

Lord Thomas of Gresford: Can the Minister give me one example where there is a reverse legal burden of proof on a defendant who has to rely upon sensitive material?

Lord Bach: I am not sure I can give the noble Lord an example, but I do not think that the fact I cannot implies that it would be impossible to run a defence adequately in that case.

Independently of this, the disclosure duties imposed by the Criminal Procedure and Investigations Act 1996 mean that the agency involved would identify any material held by it that might be potentially available for disclosure, applying that Act and the codes made under it. Any material undermining the prosecution case or supporting the defence case would need to be disclosed in the usual way. As far as public interest immunity is concerned, there is the possibility in cases of this kind that an application might be made to the trial judge that certain information should not be disclosed on the grounds of public interest immunity. However, an application would not, in reality, be made in respect of material essential to the defence that is being relied upon by the accused. Indeed, a judge would not allow an application in respect of such material. If the material were essential, but too sensitive to be disclosed, the prosecution would choose not to proceed further in the public interest.

Therefore, there cannot be any question that a defendant who stands trial for such an offence would not have available any material that he or she needed

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to deploy to establish the defence or could not have a fair trial. The defendant will, of course, be entitled to go into the witness box to put his or her case. The arguments that have been made that it would be impossible for the defendant to meet the legal burden of proof are, we think, misguided. Where extremely sensitive material is involved, it is open for the Crown to apply for all or part of the proceedings to be held in camera under the Criminal Procedure Rules. This has happened in past cases and can happen in the kinds of cases that we are discussing here, if necessary, and I hardly need tell the House that the court can make reporting restriction orders as appropriate.

Noble Lords should be under no illusion. These kinds of situations arise from time to time, and the criminal courts find ways of dealing with them fairly. If the courts were not able to deal with sensitive criminal cases where defences are an issue, one might ask how it has ever been possible to convict anyone under official secrets legislation. We therefore disagree with the noble Lord when he says that a defence could not be run.

However, as it is not, for one reason or another, the noble Lord's amendment that is before the House this afternoon, let me turn to the amendments that are and deal first with transparency. I apologise that this reply is quite lengthy, but the importance of this matter demands that the Government put out their case as best they can. The Bill could have been silent on the whole question of whether the intelligence services and the Armed Forces have to engage in conduct that would constitute a Clause 1 or Clause 2 offence. Indeed, this is the approach adopted in many other countries. We concluded that this would have been disingenuous and, equally importantly, would not have provided the necessary legal protection and certainty for those who have to engage in such conduct on behalf of the state.

At one level, Clause 13 is arguably an authorisation scheme. In passing this Bill, Parliament would in effect be saying that we accept that there will be occasions when it is necessary for the proper operation of the intelligences services and the Armed Forces when engaged on active service to undertake conduct that would amount to bribery. The services and Armed Forces would need their own internal controls-I will come on to this-but Parliament, not Ministers, will in practice have authorised such conduct by this clause when, and only when, it can meet the test of necessity.

That test of necessity is an important one. We are not giving the intelligence services or the Armed Forces a blank cheque. The person offering the bribe will have to be satisfied that this test is met. One of the difficulties that we have with the amendment of the noble Viscount, Lord Colville, is that it omits the necessity test and thereby reduces the threshold for an act of bribery in the exercise of the functions of the intelligence services or a member of the Armed Forces.

Given that we are dealing here with the intelligence services and the Armed Forces engaged on active service, there must be significant limits on transparency. It is long-established practice that Ministers do not comment on operational aspects of the work of the intelligence agencies. Similar considerations apply to

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operations by our Armed Forces. The reason for that is obvious: to do so could significantly undermine their operational capability and put lives at risk. I will come on to other aspects of Amendment 6 in due course, but I cannot accept the proposition that an annual report which goes into detail about the operation of the guidance should be laid before Parliament.

Turning to the question of accountability, I mentioned on Report the difficulties that we have with either a case-specific or class-based ministerial authorisation scheme. The former would in our view be unmanageable and would not confer the necessary operational flexibility. I am grateful for the support that that proposition has had this afternoon from my noble friend Lord Foulkes, with his experience.

One only has to consider the dynamics of military operations in Afghanistan to recognise the impracticability of a Minister sitting in London having to approve in advance each act of bribery. I recognise from the discussions I have had with a number of noble Lords, and from the debate this afternoon, that there is a general acknowledgment of the difficulties with a case-specific authorisation. I welcome that. As to a broad class-based authorisation, we have serious doubts about whether it would achieve significant added benefits in terms of accountability beyond that already achieved by Clause 13(1) and the other mechanisms that I am about to describe.

I am grateful to the noble Lord, Lord Pannick, and other noble Lords who have signed his amendment, and to the noble Viscount, Lord Colville, who have sought with their amendments to find a middle way. None the less, both still have an authorisation scheme at their heart and, in the case of Amendment 3, the reference to conduct being "specifically authorised" suggests that they have in mind a case-specific authorisation or at least something very close to that. But it is not clear what type of authorisation is intended.

Amendment 6, in the name of the noble and learned Lord, Lord Woolf-again, I am very grateful for what he has said-seeks to address the accountability question from a different angle and to put in place internal accountability arrangements to be set out in mandatory guidance issued by the Secretary of State. I assure the House that rigorous internal and external procedures, and controls governing all aspects of the activities of the intelligence and security services, are already in place. We firmly believe that these safeguards are sufficient to guard against any misapplication of the defence under Clause 13 and that internal procedures and record-keeping are properly a matter for the intelligence services and Armed Forces, and not for statutory regulation.

I say that because all three intelligence services are statutory agencies. They conduct all their activities within a framework of legislation, which sets out their functions or purposes and the covert methods which they employ to perform these functions. There are no circumstances in which the intelligence services would make a payment or offer an inducement which might, in the absence of the defence, constitute an offence under the Bill, other than to facilitate legal activity in support of the services' statutory functions and purposes. The operational activities of the agencies are subject to a robust system of internal checks in which the onus

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is on the intelligence officer involved to demonstrate the necessity and proportionality of the proposed activity.

The level of oversight required for particular types of covert activity is set out explicitly in legislation; namely the Intelligence Services Act and the Regulation of Investigatory Powers Act. All activities conducted under this legislation are subject to scrutiny by the independent Intelligence Services Commissioner and the independent Interception of Communications Commissioner. These independent commissioners must, by law, be given access to whatever documents and information they need, and report annually to the Prime Minister and to Parliament.

Furthermore, the Investigatory Powers Tribunal, an independent body made up of senior members of the legal profession or judiciary, can hear and investigate the complaint of any person who is aggrieved by anything which he believes the intelligence services or GCHQ have done in relation to him or to any property of his. If an individual thought for any reason that he had suffered a financial or other disadvantage as a result of an act of bribery committed by any of the security and intelligence agencies, that individual would have recourse to the Investigatory Powers Tribunal, which has the legal power to investigate and to order such remedial action as it sees fit.

Moreover, a record is already kept within each of the security and intelligence agencies of every payment made, by and to whom, and, in the case of a covert human intelligence source or agent, what assistance that individual has provided to the service or agency involved. Payments are subject to internal audit controls, and the intelligence and security services' accounts are subject to audit by the National Audit Office.

Parliamentary accountability of all three intelligence services is provided by the intelligence services committee, which examines the policy, administration and expenditure of the three services. Today, we have heard from a member of that committee, my noble friend Lord Foulkes. The Defence Select Committee in the other place provides similar oversight of the work of the Armed Forces.

The Armed Forces are clearly highly disciplined to follow and maintain the rule of law. They are subject to the jurisdiction of the service police, which operate wherever the Armed Forces serve; the service prosecuting authority under the independent Director of Service Prosecutions; and the service courts, which can sit anywhere that the Armed Forces are operating.

All money spent on military operations has to be fully accounted for. It is subject to strict government accounting rules, and internal and external audit. They can be expected to operate within the confines of the defence provided under this Bill in the same way as they can be expected to obey the full panoply of the criminal legal system of law. Judicial oversight will be provided in this context by the courts in any bribery case brought to trial and the defendant will rely on the Clause 13 defence. Where it is clear that a person meets the test of necessity, the investigator or the prosecutor will surely decide not to proceed with the case because there was no realistic prospect of securing a conviction.



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4.15 pm

Lord Clinton-Davis: On the safeguards which have been referred to by my noble friend, several noble and learned Lords, including a former Lord Chief Justice, a former Attorney-General and a former Lord Chancellor, have all expressed concern about the present situation. Notwithstanding what my noble friend has cogently argued, is there not a possibility of being able to scrutinise further what has been put forward by them?

Lord Bach: My Lords, I appreciate as much as anybody the distinction of the noble and learned Lords who have spoken in this debate, in Committee and on Report. I agree, what they have to say has to be considered extremely carefully. However, as I have said at all stages, as far as this matter is concerned, the Government's view is that we should not change the policy that we have put into this Bill. I will come onto that in a moment when I finish.

As I was saying, in such a case, independent oversight will have been provided by the investigator or prosecutor. Where the suspect's account was not corroborated by the intelligence services or Armed Forces, and the case was brought to trial, the judge would ensure, as judges always do, the fairness of the trial and the jury would decide whether or not to convict.

In conclusion, the Government understand and respect the arguments that have been put forward in support of these amendments. I have tried to set out why I cannot commend them to the House. We believe that the defence in Clause 13, coupled with the existing well established accountability mechanisms which ensure democratic oversight of the work of the intelligence agencies and of the Armed Forces, provides an appropriate and workable level of accountability. That lay at the heart of the Constitution Committee's concerns. We have been listening to the debates on this clause and we brought forward a significant concession on Report which removed law enforcement agencies from the ambit of the clause, but we are clear that the defence as it is now constituted is a core part of the Bill. I would like to think I may have persuaded the House that it is necessary and already subject to appropriate safeguards and I ask noble Lords with amendments in this group to withdraw them. If they are not minded to do so, I invite the House to reject them. If your Lordships see fit to pass these amendments, the Government will have to think very seriously about whether this Bill should be pursued. I do not say this as a threat. I am repeating in other words what I have said on a number of occasions. I cannot emphasise enough the importance Her Majesty's Government attach to Clause 13 in its current form.


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