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3.49 pm

Lord Pannick: My Lords, the judgment of the Supreme Court established three principles which the House will wish to have well in mind during the course of this debate. First, the Supreme Court decided that the international obligations of this country under the UN resolution extend only to those persons who are involved in terrorism. Secondly, the Supreme Court explained that because the relevant orders purport to go much further and apply to those in respect of whom there are only reasonable grounds for suspecting their involvement in terrorism, the orders were not validly made under the United Nations Act 1946. Thirdly, the court emphasised the destructive effect of these orders on the lives of those affected and the consequent need for considerable care and attention in ensuring the legality of any order so made. Some of the language of the justices has already been quoted in this debate.

The undoubted urgency of this matter has meant that there has not been an adequate opportunity for your Lordships to reflect on the important issues raised by this Bill. There has also been no time for your Lordships' Select Committee on the Constitution, of which I am a member, or for the Joint Committee on Human Rights to consider and to report on the major constitutional and human rights implications of this Bill.

No doubt we have no choice but to accept this Bill. However, we should record and we should regret that we are in this difficult position because of the Government's failure to heed earlier warnings that they were acting unlawfully in relation to these measures to combat terrorism. This Government have a very poor record of ignoring advice that their measures relating to terrorism are unlawful-detention in Belmarsh, control orders, stop-and-search powers and now the freezing of assets. I declare an interest as counsel in some of the litigation in relation to these matters. If the Government were to listen more carefully and with, if I may say so, a little more humility to bodies such as the Joint Committee on Human Rights and the organisations, JUSTICE and Liberty, for example, the Government would not need to come before this House today and ask for help in clearing up the mess that they have created.

I hope I am not the only noble Lord for whom the constitutional principles set out by the Supreme Court matter. I hope I am not the only noble Lord who is most reluctant to wave a magic wand over these measures to validate, even temporarily, what is otherwise constitutionally objectionable. It is ironic indeed that when the Supreme Court has found these orders to be

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invalid because of the absence of parliamentary debate and parliamentary approval we are now asked to negate that invalidity by a procedure which allows for the most limited debate in Parliament. Like the noble Baroness, Lady Noakes, I am concerned that the Government prefer orders rather than primary legislation precisely because they do not value debate on these important matters. We will need reluctantly to approve a temporary measure, but all its provisions must be scrutinised most carefully in Committee to ensure that they are necessary and proportionate.

Noble Lords will not dispute the need to validate freezing orders against people who have been found to be involved in terrorism. Noble Lords will also accept the need to validate such orders against people who the Secretary of State believes, on reasonable grounds, to be involved in terrorism. As the Minister rightly said, of course freezing orders must be available against people who have not yet been convicted for terrorism. But the orders go much further: they impose restraints on people merely because there are reasonable grounds for suspecting that they are involved in terrorism. That is unacceptable, especially as the United Nations resolution imposes no such obligation.

The noble and learned Lord, Lord Brown of Eaton-under-Heywood, in his judgment in the Supreme Court, said at paragraph 199:

"To suspect something to be so is by no means to believe it to be so. It is to believe only that it may be so".

The House should not be asked to fast-track legislation that will have a destructive effect on the lives of people without the Minister being able even to say that he believes on reasonable grounds that the persons concerned are involved in terrorism.

Perhaps I may also ask the Minister about the retrospective effect of the Bill. He mentioned that Clause 2 has a retrospective effect, back to 4 February, to protect the interests of the banks. However, as I understand it, the Bill has no retrospective effect for the period before 4 February. That means, I assume, that someone whose funds were frozen last year and who asked the bank to release the funds on 27 January-the date when the Supreme Court handed down its substantive judgment-would have a good claim against the bank for damages. Will the Minister please clarify whether my understanding is correct, because I do not understand the point in distinguishing in this temporary Bill between what occurred on 3 February and what occurred on 4 February?

I also suggest that 31 July 2010 would be a much more appropriate date for the termination of this legislation, even allowing for the intervention of a general election. The date of 31 December in Clause 1 gives a strong impression to your Lordships that the Government are content to rush through this Bill and then relax, with the pressure off, rather than, as should be the case, ensuring that the substantive measures receive full debate as soon as possible.

Later today, the House will of course approve the Bill. But I ask noble Lords to remember the wise words of Mr Justice Frankfurter in the United States Supreme Court in 1950, that,

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or, in the context of this Bill, people who the Secretary of State has reasonable grounds for suspecting to be not very nice.

Lord Lloyd of Berwick: The noble Lord is obviously more familiar with the judgment than I am, but am I right in thinking that the noble and learned Lord, Lord Brown, was the only one of their Lordships to take the point about the difference between suspecting and believing? I think he was alone.

Lord Pannick: Other justices took the same point. Indeed, it was fundamental to the judgment because the United Nations resolution did not allow for action against those who were merely suspected of being involved in terrorism. Therefore, the United Nations Act was not a lawful instrument for the making of the orders.

4 pm

Lord Mackay of Clashfern: My Lords, we are faced with a difficult situation, as the noble Lords, Lord Pannick and Lord Myners, said. I would like to express my appreciation of the way in which the noble Lord, Lord Myners, introduced the Bill, and of the difficult situation in which the Government find themselves. There is no doubt that statutory instruments are extremely useful if you wish to do something quickly. The speed with which the legislation was introduced after the Security Council resolutions were passed is commendable. The problem with legislation that proceeds in that way is that it is by no means as secure as primary legislation. Indeed, primary legislation in our country is so secure that no court can overturn it, except possibly the court in Luxembourg in cases where it is supposed to contravene European law.

The important difference is between primary legislation and secondary legislation. As the noble Lord, Lord Pannick, said-I shall not repeat what he said on this point-the Supreme Court decided unanimously that the two orders that it quashed went beyond the empowerment that the United Nations Act 1946 gave for the purpose of implementing United Nations Security Council resolutions because the reasonable suspicion basis was not included in that resolution.

That has another effect. So far as I know, the United Nations has not found it necessary to pass resolutions requiring member states to introduce legislation dealing with people against whom there is only reasonable suspicion, so these orders were without the authority of a United Nations Security Council resolution. That does not mean that, after a broad and careful assessment of the situation, the Government might not think that, because of our special circumstances, it was necessary to have legislation that went beyond the United Nations resolutions. I think I am right in saying that New Zealand and Australia took the view that that was necessary and passed primary legislation. We did not do that and have stayed with secondary legislation that enables one to take action very quickly but in which, in this case, Parliament was not involved because there was no need for a negative or affirmation resolution procedure.

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The difficulty with that is that the legislation is nothing like as secure as primary legislation, and in due course the Supreme Court, having examined this with considerable care, came to the conclusion that these orders were beyond the powers conferred by the Act of 1946 and therefore should be quashed. That has the effect of making them null and void from the time they were originally passed. They have no authority whatsoever.

This was a situation of very grave difficulty for the Government if, as I assume, they believed that there was a serious risk to this country arising from people against whom they had no more than a reasonable suspicion. On that basis, it was necessary to take immediate action. My original thought, when I read of this occurrence, was that we have a range of anti-terrorism legislation which has been passed by Parliament over a number of years. It is quite a patchwork. Therefore, I wondered why it would not be possible to resort to one or other of these pieces of legislation to deal with this sudden difficulty. The answer to that is contained in the speech that the Exchequer Secretary made to the other place yesterday. She said:

"Let me deal with a point raised by the hon. Member for Twickenham"-

that is Dr Cable of the Liberal Democrats-

"Why do we not use other existing counter-terrorism legislation? It has been suggested that counter-terrorism legislation is already in place, and that we should use those powers rather than introducing asset freezing. We have a comprehensive framework to counter financing of terrorism, but none of the other legislation replicates the effects of the asset-freezing regime under the terrorism orders in its preventive nature and in its ability to restrict suspected terrorists' access to the financial system. Furthermore, no other legislation contains such a comprehensive range of prohibitions on third parties' making funds available to terrorist suspects, such prohibitions being essential to preventing terrorists from circumventing the restrictions and accessing funds."-[Official Report, Commons, 8/2/10; cols. 697-98.]

That immediately shows that there was a huge hole in the primary legislation system for dealing with terrorism on the basis of the nature of the threats which the Government believe to exist.

We are going to deal with this today on the basis of this Bill, but I would venture to humbly suggest to the Government, and to any other Government who may have responsibility in the future, that it is vital that the counterterrorism legislation, which is important, should be primary legislation, even if one has to take secondary legislation in order to get quick action. It should be followed up by primary legislation.

Secondly, it is amazing, looking at the patchwork of counterterrorism legislation that we have had, that it was not appreciated that this risk existed. I can understand that we are all fallible-at least, that is the general view-and that this kind of loophole or difficulty may be overlooked. However, it is extremely important, in the light of what has happened, that the whole pattern of counterterrorism legislation should be examined to see that, in all its aspects, it is reasonably secure and fit for purpose in what is a fundamental protection for our citizens.

The Bill is temporary-there is argument about how temporary it should be-and the Government have indicated that they will replace it with primary legislation. I venture to think that that would be a

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superb opportunity for considering the whole range of anti-terrorism legislation, which has been introduced piecemeal, so that we have a comprehensive system that will work in all circumstances, so far as we can see. As my noble friend Lord King has noted, there is a rather difficult grey area between terrorism and serious crime, and the provisions for seizing assets from serious crime are extremely complicated, as I think anyone who has tried to operate them will agree. I know that the Government have other work to do, but this may be a good opportunity to consider whether these two systems could profitably be linked together.

4.11 pm

Baroness Hamwee: My Lords, I start on a positive note by thanking the Government for keeping these Benches informed at the end of last week of what they were proposing-not, of course, that we on these Benches would have started from here-and for the command paper with the draft full Bill, which has provided some material for amendments, which we will discuss later. I should say to the noble Baroness, Lady Noakes, that some of them are relevant for now.

Like the noble and learned Lord, Lord Mackay, I very much appreciated the Minister's introduction, although I would have appreciated it even more if I had been able to take it away and read it before responding to it. However, here end the compliments.

I put on record our thanks to JUSTICE and Liberty for their briefings. Second-hand compliments are often the most credible. One of my colleagues who questioned me about the Bill yesterday had read the briefing material as soon as it arrived, and the organisations should take that as a compliment.

Nothing that is said from these Benches should be taken as our opposing proper measures to stop funding getting to terrorist groups or as our resisting our international obligations. However, we detect the Government's air of panic to which other noble Lords have referred. We, too, asked: why such a rush? The judgment was made at the end of last month, and a supplementary judgment was made when the Supreme Court refused to grant a stay on 4 February, but the case did not start this year. I accept that the High Court order to quash the relevant orders was superseded by the Court of Appeal, but it was made in April 2008, so the Government were clearly on notice, as the noble Baroness put it, of the issue, and, as the noble Lord, Lord Pannick, said, they have failed to heed warnings for a considerable period.

In the Supreme Court judgment, the noble and learned Lord, Lord Mance, expressed,

a word used by noble Lords this afternoon-

As noble Lords have said, we have had a great deal of terrorism legislation and criminal, serious organised crime legislation. Speaking as a lay person in this, I find it difficult to believe that terrorism is not serious organised crime.

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If the Acts of 2000 and 2001, which were used against the Icelandic banks, and 2008 did not cover the issue-the Government take that view but there is a dispute about this-why did they not make them? Even if the Government thought that Orders in Council were adequate, such important provisions, with such an impact, should have been brought into primary legislation. I follow the noble and learned Lord, although not as eloquently or no doubt as technically correct, in saying that the answer is not that an Order in Council is the usual way to go. Later today, there will be amendments from these Benches to seek to apply some existing primary legislation for the interim period.

As has been said, only small sums are currently frozen. Although I accept that it is not necessarily expensive to carry out an act of terrorism, the issue of proportionality obviously arises. It is right to protect the banks which are caught in the middle. But if an individual who is subject to freezing took proceedings to get his money back, it would not be dealt with overnight. That would, in effect, allow a little more time for the Government to take this in a rather more measured way. In any event-I think that I read this in the same way as the noble Lord, Lord Pannick-the rights of individuals against the Treasury are preserved. Taking legislation a little more slowly would simply extend by a small amount the period in respect of which an individual might claim. Having made that point, I welcome the fact that those rights are preserved.

We are unpersuaded of the need for emergency-or, as it is now perhaps a little euphemistically known, fast-track-legislation. But the House of Commons passed this Bill and it is clear that by tomorrow morning we will have a new Act of Parliament; so I do not want to spend much more time on this aspect.

The Government have been hauled over the coals by the Supreme Court for bypassing Parliament and now the use of emergency legislation is sought to overturn that judgment. Much as we might object to this, our task is to make the legislation more palatable. I hope that our amendments will help to achieve that end.

I said that it was right to protect the banks which have been caught in the middle. But that is not as important as protecting the citizens in the face of disproportionate interference with their human rights in ways not required by the UN resolutions. The terms "remorseless", "devastating", "draconian" and "paralysing" are used to describe the conditions imposed on those who are merely suspected-these are the Supreme Court's adjectives and have been used by other noble Lords today. No evidence is required and there is no possibility of judicial challenge.

It is important that permanent legislation is scrutinised thoroughly. We would support pre-legislative scrutiny perhaps by a Joint Committee of the two Houses or some other bespoke procedure. There is no reason why one should not design a procedure for this unusual circumstance. But it is far from clear that, even with a general election intervening, it is necessary to wait for as long as the end of this year. It certainly is clear that the asset-freezing regime to which an individual is made subject should itself be subject to supervision by

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the courts. Such orders should not just be made by the Executive. To quote the noble and learned Lord, Lord Mance, again, he said that the wording of UN resolution 1373,

The 2001 Act has the test of "reasonable belief". However, the Government come nowhere near evidence in the Bill, although I heard what the Minister had to say. Furthermore, promoting a Bill with no judicial oversight when a person is designated and no appeal-in other words, no judicial oversight at the beginning and no appeal at the end-and no appeal in respect of the licence terms that might apply is something that we find offensive; that would not be the wrong word. The Minister referred to judicial review and said, I think, that it was not a light touch. I believe that it is the wrong touch for this situation. It is about process and as described it accepts the premise on which the original order was made. That of course is one of the matters about which we complain.

It is of great importance that the orders are themselves proportionate, but their impact has been described as "very burdensome" on all members of the designated person's family. The impact on normal family life is remorseless and can be devastating. Noble Lords have heard of some of the restrictions. The wife of one respondent could not even receive welfare benefits until the regime was relaxed. It was what amounted to an invasion of privacy of a wife who was not a listed person. Solicitors have reported to the Supreme Court the break-up of the marriages of some of the individuals concerned. Although the Minister covered some of this in his opening speech, I want to ask particularly about what is routinely licensed. What is the approach and how are the needs of the whole family assessed? Indeed, how are their representations heard? Incorporating some sort of minimal level would be right, and I would say too that it goes against every principle that the actions of providing money to fund a challenge to an order or legally to represent a designated person should be an offence. That is itself offensive. The noble Lord mentioned legal aid. I am a little perplexed because it is difficult to imagine that someone subject to one of these orders would have the funds not to require legal aid. As we have seen in the draft longer Bill, the Government consider that periodic reports from the Treasury and an independent review of the process would be proper, so why not import those here?

This is an emergency largely of the Government's own making. The Minister referred to human rights legislation and has made a statement under the Human Rights Act that the Bill complies with the Act. Can he confirm that it complies only because the Human Rights Act and the European Convention on Human Rights do not apply? The UN charter trumps them both. As I understand it, the Supreme Court thought that as the Al-Jedda case is still continuing, that precluded it from considering the human rights position. The Minister quoted the noble and learned Lord, Lord Mance, who said that he was not taking a final view.

It is with the greatest reluctance that we see before us legislation that amounts to control orders by another name. Liberal Democrats in the Commons made it

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clear what they thought by voting against Clause 1- the guts of the Bill. We will do our best later today to ensure that the legislation that emerges is appropriate and not excessive. I can certainly assure the noble Lord, Lord Pannick, that no magic wand will be waved from these Benches.

4.24 pm

The Earl of Onslow: My Lords, I apologise for not being here for the first part of the debate, but I was taking part in important discussions in the Joint Committee on Human Rights appertaining to another issue, and I had to be there. As has just been mentioned by the noble Baroness, Lady Hamwee, the noble Lord, Lord Myners, states on the front of the Bill that nothing in the Bill is incompatible with the European Convention on Human Rights. How do the Government know that? The noble and learned Lord, Lord Hope of Craighead, suggested that the JCHR could have looked at it, but we have not looked at it. For the Government to say that the legislation is compatible with the ECHR without even subjecting it to parliamentary scrutiny is, I regret to say, fairly disgraceful. Obviously the Bill has got to go through, but with my human rights hat on, I must raise the strongest objection to how it is being done. This rush and panic reflect the Government's track record of totally disregarding the liberties of the subject, about which some of us feel very strongly.

4.25 pm

Lord Myners: My Lords, this has been a stimulating debate, one that I approached with considerable trepidation given the contribution we could expect from Members of the House with great experience in matters of the law.

As the whole House recognises, the threat to the UK today from international terrorism is very real and significant. Terrorists need financing to be able to carry out attacks, the costs of which, as we have seen, do not have to be great. Terrorists also need financing to maintain their infrastructure; for training, equipment and recruitment, and to promote their ideology. The capabilities of terrorist groups are severely constrained without access to funds.

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