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I should make it clear at the outset that today's Bill, and the fuller Bill, seek only to restore the asset-freezing regime that is implemented through the terrorism orders- that is, the regime mandated by UN Security Council Resolution 1373, where listings are made at the national level. The Bill does not seek to restore the UN al-Qaeda and Taliban asset-freezing regime. That is the regime mandated by UN Security Council Resolution 1267, where listings are made at the UN. As I mentioned earlier, the al-Qaeda regime remains in effect through a directly applicable EC regulation. Noble Lords will be aware that the Supreme Court had specific concerns about the UN al-Qaeda regime-in particular, the lack of direct access to a court for people who are listed at the UN. Those specific concerns do not arise on this Bill, because it seeks only to restore the terrorism order regime, where decisions are made nationally and individuals have access to UK courts.
With the House's permission, I shall briefly outline the Bill's effects. It seeks to maintain the Treasury's power under the Orders in Council to designate persons if they meet both the required conditions of a legal test: reasonable suspicion that the person is involved in terrorist activity, and that the designation is necessary for public protection. The effect of a designation is to forbid dealing with a designated person's funds and economic resources; to forbid making funds or economic resources available to such persons, and to forbid
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Perhaps I might turn briefly to retrospection. The Bill makes retrospective provision in one respect only. It gives retrospective legal authority for banks and any other institutions to maintain existing freezes between the dates of the Supreme Court judgment-4 February-and Royal Assent. I know that retrospective legislation is a very serious business and should be contemplated only where absolutely necessary. I assure your Lordships that this provision is necessary; without legal cover, banks would not have been able to maintain existing asset freezes for the past five days, and asset flight might already have happened at a cost and risk to our national security.
The Bill is time-limited to expire on 31 December 2010. We believe that the end of the year is the right timetable, as it will allow time for more permanent asset-freezing legislation to be given full consideration both in Parliament and in pre-legislative scrutiny. I could not be confident that, given elections and recesses, this job of scrutiny could be safely dispatched and a full Bill could then be taken through both Houses before 31 July 2010. Today's Bill is unavoidably urgent, but we do not believe that we should be fast-tracking two asset-freezing Bills through Parliament in close succession.
I want to respond to a number of points concerning human rights safeguards that were raised yesterday in debating the Bill in the other place, and which I expect noble Lords will also want to discuss today, both at Second Reading and in Committee. There are fundamental issues that are important to all Members of this House. Our intention is that all those issues be fully considered and debated when this House considers permanent asset-freezing legislation in the coming months. However, I understand that noble Lords will want some discussion of these issues today to be satisfied that the regime they are voting to extend in this Bill today until the end of the year is proportionate and fair.
Before coming to some specific issues, I want to explain that our asset-freezing regime is tried, tested and fit for purpose. It was subject to rigorous analysis by the Financial Action Task Force in 2007 and was judged to be, in its words, "fully compliant" with international best practice-we are the first country, incidentally, to get this top mark-and we have improved it through experience. For example, as the Supreme Court itself pointed out, the Terrorism Order 2009 is an improvement on the 2006 order, with more safeguards and greater proportionality.
One question that was raised yesterday in the other place, and which I see is also raised in an amendment we will discuss later, is whether "reasonable suspicion" is the right legal test. We believe strongly that it is. If we want the regime to be preventive rather than punitive, which we all do, freezing people's assets only when
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A number of Members in the other place expressed concern that using reasonable suspicion as a test may leave people in a sort of limbo situation where they have their assets frozen without knowing the case against them, without being charged with a criminal offence and without any means of getting an asset freeze removed. I will explain why this perception is not accurate. First, it is not true that people do not know the case against them. When people are designated, we provide them with as much information as we can share about the reasons for their listing. Only relatively few cases involve closed source material that cannot be shared directly with the designated person. Of the 33 UK people currently designated under the terrorism orders, six were designated on the basis of closed information and 27 were designated on the basis of open material.
Secondly, it is not true to say that people on an asset freeze list are never charged with a criminal offence. In fact, a clear majority also face action through the criminal justice system. Of the 33 people designated under the terrorism orders, 27 have been charged with a terrorist offence. Of these, 22 have been convicted; four are awaiting trial or retrial; one has recently had their charges dropped and we are urgently reviewing their listing.
Finally, it is not true to say that people can never get off an asset freeze list. The Treasury has a track record of actively reviewing designations and revoking them when they no longer meet the legal test. Of the 51 UK designations made under the orders to date, 18 have been revoked following a Treasury review; for example, where criminal charges have been dropped or where an individual is no longer assessed to pose a significant threat. Under the Bill, the Treasury will continue to carry out such reviews on a yearly basis, or more frequently when there has been a change in a person's circumstances.
A further question raised on several occasions yesterday in the other place was whether the right of individuals to challenge their designations in court under a judicial review procedure provided sufficient redress. The Government are of the view that court scrutiny should happen after freezing decisions have been taken and individuals have decided to challenge them. We do not believe that courts should be taking the decision to impose the freeze in the first place. These are decisions that the Executive can rightly take, with the safeguard, as I outlined earlier, that all decisions must be necessary for public protection and supported by proper evidence.
We believe that judicial review is the right procedure for the courts to examine cases that are brought before them. Judicial review is not, as some might argue, a light touch that lets the Executive off the hook. On the contrary, as we have seen in control order cases that have come before the courts, a judicial review procedure closely scrutinises the Government's decision-making processes and the evidence used to support them.
It might help if I explain in detail how the judicial review procedure works for control orders. There is an automatic review process by the High Court to determine whether the Secretary of State's decision to make a control order was flawed. In other words, the judge must agree: first, that there is reasonable suspicion that the individual is or has been involved in terrorism-related activity; and, secondly, that a control order is necessary to protect members of the public from a risk of terrorism. The judge must also satisfy himself that each obligation imposed by the order is necessary and compliant with the ECHR, including Article 5, which deals with the right to liberty, and Article 8, which deals with the right to respect for private and family life. The judge will further ensure that the individual's right to a fair hearing in accordance with Article 6 is protected.
If any of these tests is not met, the judge can quash the order, quash one or more obligations imposed by the order or give directions for the revocation of the order or for the modification of the obligations that it imposes. The court may consider the case in open or closed session, depending on the nature and sensitivity of the information under consideration. Individuals are represented in open court by a lawyer of their choice. Special advocates are used to represent the interests of the individuals in closed sessions.
Finally, I know that a number of noble Lords will be concerned about the human rights impacts of the asset-freezing regime and will have noted the comments of some of the Supreme Court judges referring to the regime as "draconian" and designated persons as "prisoners of the state". Again, these points were raised in the other place yesterday. I should stress that the Supreme Court did not make findings that the asset-freezing regime breached human rights. It quashed the orders because of the legal base. Given that the court did not make human rights findings, we should be careful not to take some individual comments in the judgment as representing definitive views of the court about the nature of the regime.
"I am unimpressed by the alternative grounds on which the Order is challenged, those of certainty and proportionality. Primary legislation introducing this same asset-freezing regime could not have been declared incompatible on those grounds. It is only because the Order was plainly insufficiently mandated by the SCR 1373 that I would hold it invalid".
"I agree with the Court of Appeal's reasoning and conclusion that the relevant provisions of articles 7 and 8 were and are sufficiently certain to be valid ... I am at present also unpersuaded
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As set out in the Written Statement that I laid before this House on Friday, central to this is our licensing regime. We make sure when we designate people that we immediately issue a legal aid licence so that people can receive legal aid, if eligible. We also immediately issue a licence to allow them to receive and use their state benefits without delay. We do not limit people only to basic expense. We impose licence conditions, but only conditions that are proportionate to ensuring that funds are not diverted to terrorism. As I announced on Friday, we no longer require spouses of designated persons to report to the Treasury on how they spend benefits money. That will help to minimise the impact that the regime has on spouses and families.
In closing, in these times of severe threat to our national security, we cannot afford to fail to take the necessary steps to prevent terrorists raising and using funds for purposes of terrorism. Without primary legislation of the kind before the House today, we will leave gaps in our defences which could be exploited by people who intend serious harm to the British public.
The Bill ensures that the proper safeguards we set out in the Terrorism Order 2009 will continue to apply. At the same time, the Bill will provide Parliament with the proper time needed to consider and debate the permanent legislation in full. I therefore commend the Bill to the House.
Lord Lloyd of Berwick: Before the noble Lord sits down, perhaps I may ask for information on one point which I do not entirely understand. He referred to £135,000 as having been frozen under the orders of 2001 and 2009, but am I not right in thinking that those orders have in fact been quashed? So at the moment, at any rate, they are quite safe. It is only the 2006 order that has been quashed, and that relates to £16,000 only, which has presumably now gone. Is that the right analysis?
Lord Myners: I believe that the noble and learned Lord is correct, but that we can no longer depend on the other orders in the light of the Supreme Court's decision. If, however, officials give me a more precise answer, I will of course make sure that I provide it to the House and to the noble and learned Lord in my closing speech.
Baroness Noakes: My Lords, I thank the Minister for introducing this Bill. Let me say at the outset that these Benches support and have consistently supported the Government in helping to ensure that terrorists do not threaten the security of the UK or, indeed, of other nations. We have supported a bewildering array of anti-terrorism measures in the past decade and we will support the Bill before us today. However, in lending our support, we reiterate our call for a review
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Our support for anti-terrorism legislation is never unconditional. That legislation has to be proportionate, and inevitably there is a balance to be struck between the rights of individuals and the public interest, but Parliament is the right place for that balance to be determined. The Supreme Court decision handed down on 27 January made plain the impact on individuals affected by the various freezing orders covered by the Bill, and the Minister has quoted some of the words used in the Supreme Court: "draconian", "drastic", "burdensome", "oppressive" and "prisoners of the state". However, as the Supreme Court made clear, Parliament should have been involved in determining whether and how the rights of the individuals were to be protected under the orders. The Supreme Court was clear that it was for Parliament to determine.
When the United Nations Act 1946 was passed, it was in the context of a very different world from today. All of the orders made under that Act prior to 2001-and indeed a good number of those made subsequently-deal with sanctions against countries rather than individuals. I rather doubt that the 1946 Act, with its Order in Council process, would get through your Lordships' House unamended today, possibly even if it were restricted only to sanctions against nation states.
In 2001, however, the Government decided to use the 1946 Act for the anti-terrorist measures mandated by the UN Security Council. The Treasury has some form in using legislation in a way for which it was not initially intended. We all recall that the Treasury surprised many people, including the Icelandic nation, when it used the asset-freezing powers of the Anti-terrorism, Crime and Security Act 2001 to freeze the assets of certain Icelandic banks.
The Treasury has never fully explained why it chose to use the 1946 Act rather than primary legislation which could have been processed through a fast-track procedure in 2001. The Written Ministerial Statement of 27 January, and the Minister today, referred to the Government acting,
Did it never occur to the Government that they had taken too much power to the Executive, to the detriment of those who were targeted by the orders? Did they never stop to think that Parliament ought to have been involved in the decisions? Did they not recognise the rights and liberties of the individuals who might be affected? If they had done so, the only logical conclusion to have drawn would have been that the balance between the interests of national security and those of individuals were best decided by Parliament and not by the Executive alone.
If it did not occur to the Government that they were acting inappropriately in 2001, did they not pause for thought when the Judicial Committee of the Privy Council, chaired by my noble friend Lord Newton of Braintree, highlighted in 2003 the human rights issues involved in asset freezing? Or perhaps when the Joint Committee on Human Rights issued its sixth report of the 2003-04 Session? Or even when New Zealand and Australia replaced their regulations with primary legislation? The Government have known since the High Court ruled against them in April 2008, after a legal challenge, that their use of the 1946 Act was vulnerable.
It is unattractive when the Executive try to take maximum power for themselves and then are prepared to go right through the courts to defend it. I cannot help but think that it would have been more responsible for the Government to recognise the force of the arguments in the High Court judgment that have now been endorsed by the Supreme Court, and to have brought forward primary legislation in 2008.
Lord Elystan-Morgan: Would the noble Baroness kindly give way? I am most grateful. The point that she made about the decision of the High Court in April 2008 is perfectly valid. However, I am sure that she will accept that the Court of Appeal reversed the decision-I think unanimously-a few months later.
Baroness Noakes: From memory, it was not a unanimous decision: there was criticism of some aspects of it. However, I accept that the Court of Appeal ruled in favour of the Government. My point is that the Government were on notice that they were vulnerable, but they chose to battle on through the courts rather than put the legislation on a more secure basis by involving Parliament. It should have been clear to the Government that Parliament had not been properly involved in the early decisions, and that the proper way forward was to bring legislation that would involve Parliament in the construction of the way in which individuals' assets would be frozen. However, they stuck it out until the very end and lost in the Supreme Court. That made it inevitable that we would have emergency legislation. We are in this position because the Government failed to act.
The Government first informed us nearly two weeks ago that they intended to take through the legislation, which was published in draft form last week, on an expedited basis. The Bill would replace the orders under the 1946 Act with a dedicated Bill. Dates had been provisionally agreed that would have allowed both Houses to consider the Bill on a rapid but acceptable timescale. The plan was for the Bill to start in the other place today and for it to have been completed in your Lordships' House, with Second Reading, Committee, Report and Third Reading taken over the first two weeks of March. However, once the Government heard that their application for a stay had been rejected by the Supreme Court, they abandoned that Bill and opted for the minimalist Bill before us today. They have dressed this up as the virtue of pre-legislative scrutiny; but they showed no interest whatever in extensive or pre-legislative scrutiny right up to the time that their stay application failed.
There is also a puzzle. The Government have asset-freezing powers in the Anti-terrorism, Crime and Security Act 2001, which the noble and learned Lord, Lord Hope, the Deputy President of the Supreme Court, said could have been used for the cases covered by the appeals. I believe that that legislation has been used only once, in the case of the Icelandic banks to which I referred earlier. The Government have not properly explained why they do not use that legislation for terrorist asset freezing; in what ways their view differs from that of the noble and learned Lord, Lord Hope; or, indeed, why a simple amendment to that Act could not give them the legislative cover that they need.
The Bill has a sunset date of 31 December 2010. It could have been managed perfectly well with a 31 March sunset. It would have been possible and, in our view, desirable if the longer Bill putting terrorist asset freezing onto a proper footing had stuck with the timetable that we had already agreed. We told the Government last week that we were ready and willing to do that in addition to dealing with this emergency Bill this week. The chairman of the Human Rights Committee said yesterday in another place that 31 March would have allowed his committee enough time to scrutinise the longer Bill. The Government are still running away from proper parliamentary scrutiny.
We believe that it is about time there was a debate in Parliament about the balance between the rights of those who are the subject of asset freezing and the needs of national security. We need to debate whether there should be some involvement by the courts in the designation orders themselves, by way of review or confirmation. We should examine why terrorist asset-freezing orders are more draconian than asset freezing for money laundering or criminal purposes, for example under the Serious Organised Crime and Police Act 2005, where the courts have a greater involvement.
We need to debate whether the appeal processes first set out in the Counter-Terrorism Act 2008 are appropriate. They are based solely on judicial review processes and remedies and so are heavily weighted in favour of the Executive. I disagree with the Minister's analysis of judicial review. It does not allow an examination of the merits of the case and it also does not allow, for example, for orders to be varied, which is important when dealing with licences for the use of financial resources. We need to debate the way in which the various offences are constructed and why some of them are restricted to situations where significant benefit is involved while others are not. We need to subject the information provisions to scrutiny and ensure that the privilege regarding self-incrimination is not damaged.
We have a long list of more detailed points which can be taken forward only in the context of a longer Bill. We are denied the opportunity to deal with those points because the Government have chosen the minimalist emergency legislation. All the points that I have mentioned are relevant to the minimalist Bill but they cannot be debated given the structure of the Bill and the timetable to which we are working. I know that the noble Baroness, Lady Hamwee, has tabled amendments for our Committee stage this evening, but I do not think that this short Bill is the right place for them.
Let me reiterate that we believe in a strong and effective regime which can minimise the threat posed by terrorism in whatever guise it appears. However, we are mindful of the need to accord those suspected of involvement in terrorism the sort of rights that a civilised and libertarian society accords its citizens. The Bill does not allow a proper consideration of those issues. We shall return to some of them when we reconvene later today for the Committee stage but we shall not debate them properly until there is a full Bill to scrutinise. I regret that the Government are denying Parliament that opportunity.
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