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The asset-freezing regime, implemented in good faith under Orders in Council, has proved over the years to be a valuable tool for disrupting and preventing terrorist financing. The Supreme Court ruled that the Terrorism (United Nations Measures) Order 2006 and the Al-Qaida and Taliban (United Nations Measures) Order 2006, implemented in good faith, were beyond the scope of the power provided by Section 1 of the United Nations Act 1946 and quashed both orders. This had effect from 4 February.

National security and public protection continue to be an absolute priority for the Government. Our aim is to prevent a gap in the asset-freezing regime and ensure that suspected terrorist funds cannot be diverted and used for terrorist purposes, and that suspected terrorists do not get free access to the UK's financial system.

That is why this legislation is being moved today. We considered it necessary to the UK's national security to act swiftly to restore the asset freezing on a temporary

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basis under primary legislation, while we introduce permanent legislation with time for Parliament to fully scrutinise our proposals in great detail.

I welcome the many points made by Members of the House. I will deal first with the points raised by the noble Baroness, Lady Noakes. The noble Baroness kindly offered support for the intention of the legislation, and we welcome and greatly appreciate that. At the same time, the noble Baroness quite correctly lost no opportunity to point out what she regarded as the Government's failings, which led us to have to introduce this legislation on a fast-track basis. No doubt there were warnings which could have led many to believe that primary legislation should have been introduced from 2001. The noble Baroness referred to the work produced by the noble Lord, Lord Newton, in 2003 in that respect; and also, as the noble and learned Lord, Lord Mackay of Clashfern, referred to, the actions taken in primary legislation in New Zealand and Australia.

However, I remind your Lordships' House that the Government were acting in good faith and under advice that it was correct and proper to rely on Section 1 of the United Nations Act 1946. We cannot rush to Parliament every time a piece of legislation goes through some form of court challenge, certainly not in a situation where the Court of Appeal found in favour of the line that the Government had taken. However, the judgment from the Supreme Court required us to take the necessary action to protect the country and our people from the risk of terrorism facilitated by the use of financial assets and access to the financial system, while at the same time putting in place detailed legislation that can be subject to intensive scrutiny as it makes its way through the House.

The noble Baroness is correct in observing that the decision of the Supreme Court to reject a stay in respect of its decision led us to require urgent action. The Supreme Court in its judgment directs us towards the need for fairer scrutiny, which is precisely what we are going to achieve by the process of putting forward two pieces of primary legislation-one to be adopted through the fast-track mechanism and the other through the very detailed scrutiny that this House and others will apply to the legislation, as we wrestle with reconciling the need to preserve security against the risk of terrorism while not encroaching unreasonably or disproportionately on individual freedom and rights, which we regard as of the highest possible importance. The noble Baroness in her various questions demonstrated why we need a very serious debate and scrutiny of the permanent legislation, which is precisely what we plan to ensure.

The noble Lord, Lord Pannick, referred to the undoubted urgency to validate orders and asked why the Joint Committee on Human Rights and the Constitution Committee had been circumvented. The House will be aware that the answer is simply the lack of time. The Bill was introduced only on Friday, and the Joint Committee on Human Rights does not meet until tomorrow, and the same applies to the Constitution Committee. Both committees will have a very full role to play in scrutinising our permanent Bill, and we very much welcome that.

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The noble Baroness asked why we were not using the Anti-terrorism, Crime and Security Act 2001. The answer was provided largely from her own Benches by the intervention from the noble and learned Lord, Lord Mackay of Clashfern, in referring to the answer given in the other place yesterday by the Exchequer Secretary to Dr Cable. I might respond also to another point that the noble and learned Lord, Lord Mackay, made, relating to what he described as the patchwork of legislation. There is much to commend his observation that we should at an appropriate moment review the myriad pieces of legislation which deal with terrorism-to go back to the earlier intervention in my opening speech from the noble Lord, Lord King-to satisfy ourselves that the interface with other forms of legislation, particularly those relating to serious organised crime, is looked at in its totality to ensure that they are comprehensive and complete and that there are no inconsistencies or gaps. I have had the opportunity already to discuss this matter with my noble and learned friend the Attorney-General. It is a matter on which we will no doubt reflect-but we can rest assured without any doubt that the permanent legislation that we propose to follow this temporary Bill will receive very close scrutiny.

The noble Baroness asked why we did not simply amend the Anti-terrorism, Crime and Security Act 2001. The Act covers a wide range of threats but is primarily aimed at countering threats from overseas and is framed appropriately. Amending it to allow for a meaningful terrorist asset-freezing regime that could be used to tackle threats within the UK would substantially change the nature of the Act, and we judge that this would not be an efficient way of addressing our particular concerns.

I will go back to answer some more points made by the noble Lord, Lord Pannick. He expressed concern about the speed with which the Bill is being rushed through. I fully sympathise with his comments, and I think everybody on the government Benches and elsewhere in the House would rather we never had to use fast-track processes. However, the House also recognises that this is not necessarily a case, as the noble Baroness, Lady Hamwee, suggested, of a hint of panic; rather we are acting expeditiously and with appropriate urgency in the light of developments. We are not, of course, asking noble Lords to accept permanent asset-freezing legislation on such a fast-track basis. This Bill simply restores the existing regime for a temporary period to provide time for Parliament to consider permanent legislation more fully.

Concern was also raised about our use of reasonable suspicion tests, and whether this exceeds our international obligations under United Nations Security Council Resolution 1373. I accept that UNSCR 1373 does not spell out precisely that action should be taken on the basis of reasonable suspicion. However, it is clearly intended to be preventive, and the international Financial Action Task Force has made it clear that, in its reasonable view, suspicion is a proper standard for implementing UNSCR 1373. I suggest to your Lordships' House that this is also an area where one operates within the framework of UN thinking but according to the particular circumstances as they are perceived to apply in one's own territory. I am afraid we know from very painful

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and tragic experience that the United Kingdom is a country in which the threat of terrorism is particularly pronounced, as indicated by my right honourable friend's decision recently to raise the security level. That ability to form a judgment as to the particular circumstances that will apply to our situation in this country, within the framework of 1373, is a reasonable way of proceeding.

The noble Lord, Lord Pannick, also said that he was a little puzzled as to why Clause 2 gives retrospection to the banks only back to 4 February, and raised the question of what would happen if banks were to be sued for having maintained frozen accounts on 27 January, after the first Supreme Court judgment. We believe that retrospection should be used only where absolutely necessary, especially in a fast-track Bill. The reason we do not provide banks with retrospective cover predating 4 February in this Bill is that the Supreme Court judgment did not take effect until 4 February. Prior to that date, the banks were therefore in a position where they could reasonably argue that they properly thought they had a valid legal base to freeze terrorist assets. The noble Lord also expressed concerns about why we-

Lord Wallace of Tankerness: I hear what the Minister says on retrospection. Am I right in thinking, as the noble and learned Lord, Lord Mackay, indicated, that as a result of the Supreme Court decision, these orders have been null ab initio-from the very beginning? Therefore, previously, if a person failed to comply with a prohibition or obligation-prior to 27 January, for example-they might have been guilty of a crime. However, is the Minister saying that no crime will have been committed if a person failed to comply with a prohibition or obligation under these orders prior to 4 February, or even 27 January?

Lord Myners: I thank the noble Lord, Lord Wallace, for his intervention. I will no doubt reflect on that question while I complete my answers to the noble Lord, Lord Pannick. With assistance, I might provide him with the accurate and precise answer that his question justifies, and which I know that he would expect. As I think I said, we abhor retrospection-particularly in a fast-track Bill-and would only seek to use it where we believed that the arguments for so doing were compelling.

The noble Lord, Lord Pannick, also raised the issue of the length of the sunset clause. The noble Baroness, Lady Hamwee, also mentioned that, and preferences were expressed for an earlier date. That will no doubt receive our attention during the Committee stage, if noble Lords so wish. We believe that 31 December is the right deadline to allow sufficient time for pre-legislative and parliamentary scrutiny. We also believe that our existing regime is tried, tested and fit for purpose, that it has appropriate human rights safeguards already in place, and that it can reasonably continue in operation until the end of the year and until we are able to introduce permanent legislation.

As I am sure the noble Lord, Lord Pannick, would appreciate, 31 December is the absolute deadline. We will seek to bring this legislation forward and to have it

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debated by the House-and passed into legislation, if that is the wish of Parliament-well before 31 December. As must already be clear from this excellent Second Reading debate, there are significant issues that will require debate when we come to the substantive measure.

Lord Pannick: I am very grateful for that response, but can the Minister give us any indication of when proceedings will commence on the substantive Bill either in this House or in the other place? Does he have a date for the Second Reading?

Lord Myners: I do not have a date for Second Reading now, but I will certainly use my good offices to encourage that it is brought forward as soon as possible and as soon as it is compatible with good pre-legislative scrutiny. As the details of the Bill are already available, that scrutiny process has already commenced within an informal structure. Having reflected carefully on the question from the noble Lord, Lord Wallace, I can now advise him and the House that the orders are void. There are therefore no offences to prosecute; and, in any event, no prosecutions have been brought. I trust that that answers his question.

Lord King of Bridgwater: I thought that there was an old convention in this House that nobody should seek to anticipate the Queen's Speech. With respect to the Minister's response to the noble Lord, Lord Pannick, he seemed to be anticipating somebody else's Queen's Speech.

Lord Myners: The parliamentary experience of the noble Lord, Lord King, once again shines forth for the benefit of the whole House, and my own inexperience is visible to all. However, I think that I said words to the effect of, "if it were left to me" or, "I would use my own efforts". Far be it for someone as humble as me to anticipate the content of the Queen's Speech. I am grateful to the noble Lord for correcting me if I seemed presumptious in that respect.

The noble Baroness, Lady Hamwee, made a very thoughtful contribution. I am sure that we will see much more of the logic behind her arguments displayed in Committee. In my opening comments I endeavoured to address some of the issues that will be raised by the amendments, but no doubt she will reflect on whether I have provided an adequate response or whether she still wishes those amendments to be placed before the Committee. I heard what she said about judicial review but I emphasise that it is not a light touch. It is a serious challenge and we should not disregard its powerful protection against abuse of privilege by the Executive.

The noble Baroness, Lady Hamwee, asked about the basis of individual need. The Treasury carefully evaluates, and it has certainly sought to ensure that its understanding of the needs of individuals is properly taken into consideration in the permitted licensing arrangements.

I go back to the question raised by the noble and learned Lord, Lord Lloyd of Berwick, in respect of the amounts of money frozen. The 2006 order was quashed on 4 February. The 2001 and 2009 orders are

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still in force but are at risk of being quashed on the same grounds as the 2006 order. As regards frozen funds, all £150,000 remains frozen; £135,000 under the 2001 and 2009 orders, because they remain in force, and £16,500 under the 2006 order because we are giving the banks retrospective legal cover in this Bill.

The noble Baroness, Lady Hamwee, also asked about a Section 19 statement based on the ECHR not applying. I advise her that we do not rely on the al-Jedda judgment. As regards Section 19 certification, we believe that the Bill is fully compliant with human rights requirements. I re-emphasise that I absolutely agree with the noble and learned Lord, Lord Mackay of Clashfern, about the importance of primary legislation. With hindsight, we wish that we had not relied on the powers in the United Nations Act 1946, but we are now somewhat belatedly seeking to rectify that with primary legislation.

I think that I have covered most of the points raised. I must emphasise again that these are 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 terrorist purposes. Without the primary legislation before this House, we would leave gaps in our defences which people who intend serious harm to the British public would be able to exploit. At the same time, the Bill will provide Parliament with the time needed to consider and debate the permanent legislation in full. I therefore commend the Bill to the House.

Bill read a second time and committed to a Committee of the Whole House.

Equality Bill

Bill Main Page
Copy of the Bill
Explanatory Notes
2nd Report from the Delegated Powers Committee
3rd Report from the Delegated Powers Committee

Committee (6th Day)

4.49 pm

Schedule 18 : Public sector equality duty: exceptions

Amendment 114ZA

Moved by Baroness Morris of Bolton

114ZA: Schedule 18, page 196, line 38, at end insert-

"Exception to the public sector equality duty for small organisations

Section 148 does not apply to-

(a) a public authority specified in Schedule 19 that has fewer than 250 employees; or

(b) a person who is not a public authority, but who exercises public functions and who has fewer than 250 employees."

Baroness Morris of Bolton: We tabled this probing amendment to ask the Government for reassurance about the operation of the public sector equality duty in relation to small organisations. Our amendment would provide an exception to the public sector equality duty, which would mean that any public authority, or a non-public authority that had been subcontracted to carry out functions of behalf of a public authority, should not be subject to the public sector equality duty if it employed fewer than 250 people.

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Research carried out by the Government to analyse the functions of the public sector equality duty and its impact was carried out predominantly on large organisations. Research to support extending the duty to other protected characteristics was based on research by Schneider-Ross Ltd. Most of the respondents in that case were large organisations. Some 30 per cent of the 174 organisations that replied to the survey employed between 1,000 and 4,999 people. Only 2 per cent employed fewer than 150 people. Has any further or alternative research been undertaken that concentrates more fully on small businesses?

Concerns have been expressed to us that the public sector equality duty may be too onerous on businesses with fewer than 250 employees and that no information has been provided to suggest otherwise. Without any such reassuring information, it is perhaps premature to saddle smaller businesses with this burden until further research has been undertaken. This is a particularly pertinent question because, if the organisations subject to gender pay gap reporting are only those with more than 250 employees, might that not make sense in this case as well?

A second concern is the potential lack of clarity in this area. We have been informed that Section 6(3) of the Human Rights Act 1998 states that a person may be defined as a public authority for exercising public functions. Would that mean, therefore, that a single person could be classed as having to abide by the public sector equality duty? Certain groups are worried because, as the Bill stands, it is unclear exactly to whom the public sector equality duty would apply.

I have another question about smaller organisations that have had public functions outsourced to them. We covered most of this in a debate on a previous day and I will not go over those arguments. However, will the Minister confirm that if public functions are outsourced to a small charity-for example, one based on religious principles-the employment exceptions in paragraph 3 of Schedule 9 would still apply? In other words, will the charity continue to function under the terms of its foundation charter even though it would be performing a service on behalf of a secular public authority? Will the Minister clarify where the terms of a charity's foundation charter would apply and where they would not? If a public sector authority has outsourced some of its functions, in terms of those functions, will the public sector authority duty or the charity's foundation charter have pre-eminence?

Finally, there is a question to be asked about organisations where jobs cannot be neatly segregated into those that would be tied into the public sector equality duty and those that would come under the private functions of a small organisation. For example, if a small care home operates under a Christian ethos, would that care home have a right to demand that staff were of the same religion? Moreover, if the care home also had some of the public care provision outsourced to it, under the terms of the public sector equality duty would it be able to ask for all staff to be of the same religion? I ask this because in such organisations it would not be possible to separate the roles into those which clearly came under the new equality duty, and those which remained under the small, private

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organisation. I see the Minister looking confused, and we are confused, but these are genuine concerns which have been raised with us, so I look forward to her response and hope she can shed some light in this area. I beg to move.

Lord Lester of Herne Hill: My Lords, this amendment, I am sorry to have to say, is regressive. It would exempt from Clause 148 any public authority with fewer than 250 employees.

The Race Relations (Amendment) Act 2000, made in the wake of the recommendations of the Stephen Lawrence inquiry, introduced general statutory duties on scheduled public authorities which apply irrespective of the number of employees within their workforce. That is in respect of race. So did the Disability Discrimination Act 2005, supported by the Conservative Party.

The Equality Act 2006 introduced similar public sector duties as regards sex discrimination which apply irrespective of the size of the public authority. The fair employment amendment Act of 1989, introduced by the Thatcher Administration to combat religious discrimination in the workplace, contained no such exception for public authorities with fewer than 250 employees. That is why the amendment is regressive. It is going back on the whole of that-race, religion, with regard to Northern Ireland here, with regard to gender, with regard to disability.

We know of no evidence to support the amendment, nor do we understand why Her Majesty's Official Opposition should seek to weaken the scope of the public sector duty and the protection it gives to vulnerable minorities, including women, ethnic minorities, disabled people, religious minorities, gays and lesbians and the elderly, and we are opposed to it.

Baroness Greengross: Could I add my voice in opposing this amendment, and to agree with the noble Lord, Lord Lester? For example, whether a care home is under a religious foundation's auspices or not, it would be totally unrealistic to restrict those staff who actually do the caring to people of a particular faith, race or anything else, because they just would not work any more. It would be totally contrary to the aims of the Equality Bill.

The Archbishop of York: I fail to understand why the figure 250 has been picked. What matters is that people are not discriminated against either overtly or covertly and it does not matter whether the employees are five, 20, 100 or 1,000. Discrimination is discrimination, so I am surprised by the number. It may sound interesting, but mathematical calculations in a Bill such as this are never helpful. I do not understand why the figure has been asserted, and if, as the provision says, a public authority has a public duty, I do not understand why mathematics is beginning to come into it. Maybe I need to go back to primary school and then I will know that 250 is the level at which it is impossible to discriminate.

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