House of Commons

Monday 15th November 2010 Commons Chamber

Monday 15 November 2010

The House met at half-past Two o’clock

Prayers

Monday 15th November 2010 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Monday 15th November 2010 Commons Chamber

The Secretary of State was asked—

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

1. What qualifications teachers employed by free schools will be required to have.

[The Secretary of State for Education (Michael Gove)]

Innovation, diversity and flexibility are at the heart of the free schools policy. We want the dynamism that characterises the best independent schools to help drive up standards in the state sector. [Hon. Members: “Hear, hear.”] Oh, thank you. In that spirit, we will not be setting requirements in relation to qualifications. Instead, we will expect business cases to demonstrate how governing bodies intend to guarantee the highest quality of teaching and leadership in their schools. No school will be allowed to proceed unless its proposals for quality teaching are soundly based. Ensuring that each free school’s unique educational vision is translated into the classroom will require brilliant people with a diverse range of experience.

[Steve McCabe]

I am grateful for that answer. [Interruption.] I am, indeed. My only question is, if we recruit too many untrained and unqualified teachers, does the Secretary of State fear he will end up presiding over the Department for dumbing down?

[Michael Gove]

That was a brilliantly couched question, which reflects the many years that the hon. Gentleman spent, with profit, in the Government Whips Office. I think that the Department for dumbing down was presided over by my predecessor, the right hon. Member for Morley and Outwood (Ed Balls), during his three years as Secretary of State. As our new schools White Paper will point out when it is published, we will do everything possible to increase the prestige and esteem of the teaching profession. Throughout the House, we all recognise how important it is to get the best people into the classroom.

[Bob Russell (Colchester) (LD)]

Will the teachers—or whatever description they are given—at free schools be required to go through checking by the Criminal Records Bureau?

[Michael Gove]

We will ensure that everyone who is employed in a free school goes through the appropriate process of ensuring that it is safe for them to be in an environment where children are taught. As the hon. Gentleman will know, the Government are reviewing the current vetting and barring scheme in order to scale it back to common-sense levels, but the balance that we want to strike is between a proper regard for child safety and ensuring that unnecessary bureaucracy is removed.

[Kevin Brennan (Cardiff West) (Lab)]

Where will these unqualified teachers be required to teach? I have here the document containing the Government’s list of places where they want free schools to be able to open without any planning permission. It includes hairdressers, travel agencies, sandwich bars, dry cleaners, undertakers and—you could not make this up, Mr Speaker—pet shops. Actually, the Secretary of State and the schools Minister, the hon. Member for Bognor Regis and Littlehampton (Mr Gibb), look a bit like the Pet Shop Boys, but does their vision of 21st century schools really consist of our children being educated in the abandoned premises of “Reptiles R Us”?

[Michael Gove]

I am grateful to the hon. Gentleman for that well rehearsed question. I know that he is a brilliant musician, but in the words of the Pet Shop Boys, he’s got the brains and I’ve got the looks, and together—I suspect—we could make lots of money.

We want to ensure that the spirit of innovation can flourish, and that Britain, and indeed our education system, is open for business in raising standards.

[Stephen Phillips (Sleaford and North Hykeham) (Con)]

2. What steps he is taking to reduce the administrative burden on (a) head teachers and (b) school governors.

[The Secretary of State for Education (Michael Gove)]

The Government are committed to reducing the administrative burden on both head teachers and governors. We have already announced that the self-evaluation form will be removed, that the inspection framework will be streamlined and that we will reduce the amount of guidance issued to schools. Today I can announce that we are abolishing the overly bureaucratic financial management standard in schools scheme. We will also simplify school funding, and we are considering how to reduce funding differences between similar schools in different local authority areas. We will continue to work with local authorities and others to reduce the bureaucratic burden, so that schools have more time to focus on raising standards.

[Stephen Phillips]

I am grateful to my right hon. Friend for that answer. As he is aware, the imposition of school improvement partners by the previous Government led to the senior management teams of many schools spending vast amounts of their time holding meetings, ticking boxes and discussing meaningless strategies, targets and initiatives. Will the forthcoming White Paper bring an end to that aspect of the wasteful bureaucracy created by the previous Government?

[Michael Gove]

My hon. Friend makes a great point in his characteristically forceful and eloquent way. The Government are looking at how we can ensure that the whole process of school improvement is made less bureaucratic.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

Does the Secretary of State agree that head teachers and school governors, as well as teachers, found Teachers TV very liberating in terms of knowledge, improving school administration and teaching? Will he think again about winding up Teachers TV?

[Michael Gove]

I am grateful to the hon. Gentleman, and I know how committed he is to improving continuous professional development. Our White Paper will say more about how we can do that. Teachers TV will—I think—operate in future on a commercial basis. That is one of the many ways in which outside organisations can attempt to improve education. In that respect, we will allow teachers, governors and heads to make decisions about the type of external support that they buy in to help them to improve the valuable work that they do.

[Gareth Johnson (Dartford) (Con)]

3. What recent assessment he has made of academic standards in primary schools in (a) Dartford constituency and (b) England; and if he will make a statement.

[The Minister of State, Department for Education (Mr Nick Gibb)]

In 2009, 71% of pupils in maintained schools in Dartford achieved level 4 or above in English and maths combined at key stage 2, compared with 72% in England. We want all children, whatever their background, to achieve high standards in reading, writing and maths. That is why we are introducing a pupil premium, which will provide extra funding for those schools with the most challenging intakes.

[Gareth Johnson]

I am grateful to my hon. Friend for his answer, because despite £2.5 billion spent on national strategies, a third of primary school pupils have not even reached level 4 for reading and writing. To help, will he encourage primary schools that have scrapped spelling tests in Dartford and elsewhere to reintroduce them?

[Mr Gibb]

Yes. Spelling is key to writing, as is grammar and punctuation. Indeed, we have already asked Ofqual to investigate how spelling, punctuation and grammar can be used in mark schemes for GCSEs other than simply English language.

[Mr Rob Wilson (Reading East) (Con)]

4. What assessment he has made of the likely effect of his proposed pupil premium on children in (a) Reading East constituency and (b) England; and if he will make a statement.

[The Minister of State, Department for Education (Sarah Teather)]

We have made no assessment of the effect of the pupil premium in specific constituencies. We are considering the responses to the consultation on school funding, which ended on 18 October, including the question of which deprivation indicator to use. We expect the effect of introducing the pupil premium across England to be one of raising the attainment of those children who are eligible for it.

[Mr Wilson]

As somebody who wrote about and championed the pupil premium back in 2005, may I welcome the Minister’s answer? The pupil premium will not be enough in itself to break open social mobility, as only 45 pupils on free school meals went to Oxbridge in the last year for which figures are available. What further measures can the Minister promise, and how do the Government undertake to make things better for poorer pupils?

[Sarah Teather]

I recognise the hon. Gentleman’s long-standing interest in this issue. He is right that the pupil premium alone is not enough to break open social mobility, but that is exactly why we extended the free entitlement for early-years education for three and four-year-olds to 15 hours, and why—crucially—we have extended such education to all disadvantaged two-year-olds. By ensuring that we narrow the gap before children get to school, we ensure that they are in a much better position to make the best of the offer that we provide for them when they start primary school.

[Andy Burnham (Leigh) (Lab)]

We are told that the Secretary of State cracked open a bottle or two on the day of the spending review to celebrate the “Schools Protected” headline that was running. His journalistic ability to get a good headline is not in doubt; it is his grip on ministerial detail that we worry about, and whether the reality that head teachers face when they see their budgets in a few weeks’ time will match the fine words that he used on that day.

Let me quote what the Secretary of State told the Daily Mail on 27 May:

“we will have a pupil premium, a sum of money from outside the existing schools budget which will come on top of what we currently spend on schools, in order to help children in disadvantaged circumstances.”

I ask the Minister a simple question: have the Government delivered in full on that commitment?

[Sarah Teather]

The pupil premium will provide £2.5 billion on top of the baseline for schools by the end of the comprehensive spending review period. Let me remind the right hon. Gentleman that that is £2.5 billion more than a Labour Government would have been prepared to put in.

[Andy Burnham]

I am afraid that the Minister is wrong. The coalition agreement said that the pupil premium would be funded from “outside the schools budget”, but the spending review document said that it

“will sit within a generous…settlement”.

Whatever the Minister says today, the truth is this: a pupil premium that is on top of a protected schools budget has not been delivered. However—and what is worse—the pupil premium is not what it seems. It will create winners and losers, and scandalously, the biggest losers are set to be schools in the most deprived areas of England. Let me share with the House new analysis from the Commons Library, which states:

“The impact is likely to be—

[Mr Speaker]

Order. The shadow Secretary of State must bring himself to a question, and I am sure he will now do so.

[Andy Burnham]

The Library note states:

“The impact is likely to be a shift in funding from generally more deprived to less deprived local authorities.”

At this time, how can the Minister possibly justify taking money off schools in those deprived parts of England?

[Sarah Teather]

The right hon. Gentleman knows full well that there will be a real-terms increase in school funding over the course of this comprehensive spending review period. I wonder whether it is perhaps the height of his political career to stand in the House of Commons to oppose our spending £2.5 billion extra on the poorest children in this country. Is that really what he came into Parliament to do?

[Andy Burnham]

The words do not match the reality. The reality of the Government’s spending review is this: a pupil premium con, where funding is recycled to the most affluent areas; a real-terms cut per pupil of 2.25%; a whopping 60% cut to the school building programme; Sure Start cut by 9%; and the education maintenance allowance scrapped, despite promises from the Secretary of State to protect it. Is this not the truth: he has made a mess of the education budget and while he celebrates his headlines, children and teachers are counting the cost of the Government’s broken promises?

[Sarah Teather]

Is it not true that the right hon. Gentleman’s Government left a legacy of the poorest children doing significantly worse than the wealthiest children right across the country, and of children on free school meals failing at every level to meet that of children from wealthier backgrounds? That is their legacy; that is the truth. His Government would never have implemented the pupil premium, and I am proud to say that we are implementing it.

[Several hon. Members]

rose—

[Mr Speaker]

Order. I just emphasise at this point that we must now return to questions and answers. That is what we need and that is what the public expect.

[Mr Douglas Carswell (Clacton) (Con)]

5. What recent assessment he has made of standards of attainment in secondary schools in (a) Clacton constituency and (b) England; and if he will make a statement.

[The Secretary of State for Education (Michael Gove)]

In 2009, the most recent year for which constituency-level data are available, just 34.1% of pupils in maintained schools in Clacton achieved five or more GCSEs at grades A* to C or equivalent including English and maths, compared with 50.9% across England as a whole. We remain concerned that nearly half of young people are leaving compulsory education without meeting this basic standard. That is why we are reforming the school system to give schools more freedom and introducing a £2.5 billion pupil premium to support children from disadvantaged backgrounds.

[Mr Carswell]

The Minister may be aware that as a general rule of thumb standards in schools in Clacton, and indeed in England, tend to be higher the more independent those schools are from his officials. Is there not a danger that any new direct funding through an IPSA-type quango would create the architecture of even greater central control? In order to maintain greater standards, should we not encourage real independence?

[Michael Gove]

My hon. Friend is an impassioned supporter of independence in all its forms and in all sorts of bureaucratic institutions, and I agree that one would be well advised to steer clear of any quango that models itself on IPSA. It is our intention to ensure that school funding is simplified, that schools exercise more autonomy and independence, and that the system is rendered fairer across the board. In particular, we will not be creating a new body that will have any additional bureaucratic powers.

[Toby Perkins (Chesterfield) (Lab)]

For every one of the past five years specialist sports colleges have had higher levels of attainment than the national average across the curriculum. The Secretary of State’s decision to axe the entire £162 million school sports partnership fund will decimate the work of specialist sports colleges. Given the success of school sports partnerships in raising attainment, and if he is interested in the east end boys as well as the west end girls, can he explain why he refused even to meet a recognised world expert in school sport such as Baroness Campbell before deciding to axe funding to the Youth Sport Trust and to decimate school sport?

[Michael Gove]

I am grateful to the hon. Gentleman for his question. I have had the opportunity to meet Baroness Campbell on a number of occasions; I have had dinner with her and I also met her at a school in the constituency of my hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes). The crucial question for all schools is, “Do you want more freedom or less?” We are giving schools more freedom. All schools that wish to continue to enjoy specialist status, be they specialist sports, science or technology schools, will have that freedom. What we have done is remove the bureaucratic prescription that went alongside it, and that is because we on this side of the House trust professionals, whereas those on that side of the House continually sought to fetter them.

[Pauline Latham (Mid Derbyshire) (Con)]

I welcome the fact that the Secretary of State is giving more freedom to schools, because they really do need it, and the fact that there will be a national funding formula. How soon is that likely to be introduced? Many schools, including those that became grant-maintained and foundation schools, have been waiting for it for many years, and I know that academies are looking forward to it as well.

[Michael Gove]

I am very grateful to my hon. Friend, and I want to underline that we have been consulting on moves to a national funding formula. The former Prime Minister and Member for Sedgefield was himself keen to move towards a national funding formula in order to eliminate some of the inequities within the schools system. We want to ensure that, as we move towards such a formula, schools themselves have their voices heard, so that we can do everything possible to eliminate the inequities that existed under the previous Government.

[Stella Creasy (Walthamstow) (Lab/Co-op)]

6. What funding his Department plans to provide for schools in Waltham Forest for 2011-12; and if he will make a statement.

[The Parliamentary Under-Secretary of State for Education (Tim Loughton)]

As part of the spending review on 20 October, the Government have protected school funding in the system at flat cash per pupil and, in addition, provided funding for a pupil premium from outside the schools budget. We expect to announce the funding allocations for education for 2011-12 by the end of the year.

[Stella Creasy]

Let me try to shed some light on the issue. Waltham Forest has 27% of its children on free school meals, well above the national average of 16%, and 34% of its parents are in receipt of out-of-work credits, well above the national average of 20%. A real-terms increase in our school funding would mean a rise of more than 1.25% in our schools budget for 2011-12, so can Ministers guarantee that, or are they simply better at music than maths?

[Tim Loughton]

The hon. Lady will have to wait until we make the full announcements per school. Many of the anomalies to which she alludes are the sort of thing that will be dealt with by the pupil premium in any case, and by fairer funding for individual schools.

[Kate Green (Stretford and Urmston) (Lab)]

7. What steps he is taking to provide support for parents in preparing their children to start school.

[The Minister of State, Department for Education (Sarah Teather)]

We are committed to supporting parents in making sure their children are ready for school. We are maintaining the network of Sure Start children’s centres; protecting funding for free nursery education and extending it to disadvantaged two-year-olds; and reviewing the early years foundation stage to look at how young children can be best supported throughout their early years while preparing them for formal schooling.

[Kate Green]

Save the Children has argued that every parent needs to be able to access family support programmes, which are shown to support children’s development and learning. What steps will the Minister take to ensure that a pipeline of evidenced family support programmes is available in order to improve children’s attainment?

[Sarah Teather]

I am grateful for the hon. Lady’s question. She will be aware that we appointed the hon. Member for Nottingham North (Mr Allen) to undertake a review of early intervention. He will publish a report relatively soon on best practice in that area, and it will include many of the issues that she has just mentioned. The best Sure Start children’s centres already use a significant number of evidence-based programmes, and the Secretary of State for Health has also announced an expansion of family nurse partnerships, which are extremely important in supporting young parents and in working with their children. However, we are very keen to encourage more Sure Start children’s centres to make better use of the programmes on offer.

[Claire Perry (Devizes) (Con)]

Speaking from experience, I know that there is almost nothing a parent can do to prepare a child for the devastating experience of being bullied at school. Today, on the first day of anti-bullying week, well over 800,000 people are taking part in a groundbreaking online march, organised by Beatbullying. What steps are the Government taking to reduce such bullying, which can have such a devastating impact on children’s lives?

[Sarah Teather]

I thank the hon. Lady for raising this very important issue at this very important time. The Government take it very seriously, and we will speak much more about it, including about homophobic bullying, in the forthcoming White Paper.

[Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)]

It was good to hear the Minister reciting the successes of the previous Labour Government in providing free nursery places and a network of more than 3,500 Sure Start centres. The fact that Lib Dem Ministers feel the need to resort to claiming credit for our ideas shows how few they are getting from their partners in government.

Despite what the Government spin merchants would have the public believe, Sure Start was far from protected in the spending review. By freezing the grant, removing the ring fence, cutting children’s services budgets and removing around £40,000 of the budget from every children’s centre to pay for health visitors, the Government have put the Sure Start network under severe pressure. I therefore have a simple question for the Minister: can she guarantee that no Sure Start children’s centre will close as a result of choices made by this Government?

[Sarah Teather]

We will be announcing more details about the funding for Sure Start children’s centres shortly, in line with the settlement for local government. Yes, we have removed the ring fence, but we are trying to encourage local authorities to look rationally at what they want to do locally to ensure that they prioritise early intervention. We have rolled this into an early intervention grant, because they tell us how strongly they want to prioritise early intervention. However, every area will be different. Unlike the previous Government, we want to give local authorities the freedom to make decisions on the ground on what matters for them.

[Mark Menzies (Fylde) (Con)]

8. What plans he has for future provision for children with special educational needs; and if he will make a statement.

[The Minister of State, Department for Education (Sarah Teather)]

To deliver the Government’s commitments on special educational needs, I am publishing a Green Paper later this year to look at the wide range of issues concerning children with special educational needs and disabilities. To inform this important work, I issued a call for views and have met parents, teachers, local authorities, charities and other groups. I am also considering the findings of recent reviews, including the recent report from Ofsted.

[Mark Menzies]

I thank the Minister for that answer. However, like many MPs, I have had in my constituency surgeries people who have real concern that their children will not be adequately assessed. That is a great worry for parents. What can she tell us to outline a future approach and take away parents’ worry?

[Sarah Teather]

That is specifically why we are producing the Green Paper. We recognise how many parents feel that they continually have to battle to get the needs of their child recognised, and then battle again to make sure that those needs are catered for. We are looking at how we can make the system more transparent, how we can streamline assessment, and how we can identify need much earlier. We also want to improve parents’ choice about the provision for their child and look at transition for young people right across the piece.

[Pat Glass (North West Durham) (Lab)]

Given the huge weight of evidence about the importance of early intervention for all children, but particularly for children with special educational needs—the Minister has talked about that—can she confirm for us today that the pupil premium will be paid for under-fives?

[Sarah Teather]

I said earlier that, in line with the funding premium, we have spent that money extending it to all disadvantaged two-year-olds to ensure that they have an opportunity to benefit from early education, because that will make a big difference. The hon. Lady mentions early intervention. That is why I asked Dame Claire Tickell to look specifically at how we can use the early years foundation stage and early education to identify needs, specifically special educational needs. I hope that that answers the hon. Lady’s question.

[Mr Graham Stuart (Beverley and Holderness) (Con)]

I warmly welcome giving greater autonomy to schools. However, can we ensure that schools are not free to put up classrooms in which children with a hearing difficulty are unable to hear what is going on, and can we make sure that basic regulation is in place to ensure that every classroom, unlike so many of those built in recent years, is suitable for the needs of every child in that class?

[Sarah Teather]

The National Deaf Children’s Society has raised that issue repeatedly. The Government are very sympathetic to this point; acoustics need to be considered when we are thinking about school buildings.

[Helen Jones (Warrington North) (Lab)]

9. What discussions he has had with head teachers on the Government’s plans to end the education maintenance allowance.

[The Minister for Further Education, Skills and Lifelong Learning (Mr John Hayes)]

In reaching the decision to end the EMA scheme, we have focused on the evaluation evidence and other research which indicates that EMA does not effectively target those young people who need financial support to enable them to participate in learning. It will be replaced by a scheme that does.

[Helen Jones]

I take it from that that the Minister has not had any discussions with head teachers. When he does, does he think that they will welcome taking on the role of prying into family finances as well as their other duties? What implications does he foresee for the relationship between the young person and their school or college if they are turned down for financial support? Will there be an appeals system to ensure that the process is fair?

[Mr Hayes]

In my ministerial role, I have conversations all the time with head teachers and college principals. What I know—I am sorry that the hon. Lady does not know this, because she cares about these things deeply—is that such people are almost always best placed to make the sensitive judgments about learners that she describes.

[Mr David Ward (Bradford East) (LD)]

I note the confidence of the Minister’s response about the replacement for EMA, but if that replacement—be it the enhanced learner support fund or whatever—proves inadequate, will he commit himself to reintroducing EMA for children from the poorest backgrounds?

[Mr Hayes]

The hon. Gentleman, again, shares my profound concern for social mobility and social justice. He can be assured that the Government will take the necessary steps to make sure that disadvantaged learners get every help to fulfil their potential. That is at the heart of our mission.

[Sir Gerald Kaufman (Manchester, Gorton) (Lab)]

Is the hon. Gentleman aware that I have today received a letter from the principal of Xaverian sixth-form college in my constituency, 55% of whose student roll are on EMA? The principal says:

“The decision to scrap the Education Maintenance Allowance will cause great suffering”

among those on her student roll, and particularly

“those with low achievement levels, those from ethnic minorities and those from single-parent families.”

Will the hon. Gentleman drop this damaging policy?

[Mr Hayes]

The right hon. Gentleman is an experienced Member of the House and he is diligent in studying all these matters. He will be very familiar with the evaluation evidence, which shows that EMA is ineffective at targeting the very people he described. I am reminded of Chesterton, who said:

“It isn’t that they can’t see the solution. It is that they can’t see the problem.”

[Damian Hinds (East Hampshire) (Con)]

In replacing the EMA, which had a large degree of dead-weight cost, with something more targeted, will my hon. Friend maximise the freedom of individual schools and colleges to adapt to suit their individual locality, address real need and truly widen access?

[Mr Hayes]

Absolutely. That is just the kind of discretion that lies at the heart of our policy. I am disappointed that Opposition Members do not share our faith in governors, head teachers and teachers to do their best by learners, whose interests we hold so dear.

[Natascha Engel (North East Derbyshire) (Lab)]

10. What assessment he has made of the likely effects on levels of participation in post-16 education of the withdrawal of education maintenance allowance.

[The Minister for Further Education, Skills and Lifelong Learning (Mr John Hayes)]

We are committed to making sure that young people participate in education and training until they are 18. We will replace EMA with a fund that can more effectively target young people who actually need the support to enable them to participate.

[Natascha Engel]

We all know that scrapping EMA, as well as the Government’s change of heart on tuition fees, will adversely impact the poorest children. What proper guarantees will the Minister give us that children from poorer backgrounds will not drop out of education just because they cannot afford it?

[Mr Hayes]

Let us look at the details a little more, because the hon. Lady will wish to do so. The figures and the evidence show that we are spending more than £560 million to pay 650,000 young people to incentivise them. Only 10% of those young people need that to enable them to participate in learning post-16. That means that the Government have spent £9,300 each year for every additional young person whom EMA has supported to participate. We simply want to spend that money more wisely on the very people the hon. Lady champions.

[Tony Baldry (Banbury) (Con)]

11. What steps he is taking to promote the teaching of history in schools.

[The Secretary of State for Education (Michael Gove)]

History is a vital part of children’s education. We will review the national curriculum to ensure that all children gain a secure knowledge of British history and the key events in world history. We will be announcing further details shortly. We are also exploring ways to encourage the study of history after the age of 14—for example, by giving recognition to pupils studying a broad range of subjects, including a humanity such as history, through the English baccalaureate.

[Tony Baldry]

We will never have an understanding of, for example, the need for greater religious tolerance if we do not understand the tragedy of why George Napier was martyred simply for being a Catholic or why Cranmer, Latimer and Ridley were burned to death in Oxford. If our children do not have the opportunity of hearing our island’s story, they will never learn the lessons of the past. What is my right hon. Friend doing to ensure that history is taught as a connected narrative? Will he expand a bit more on what he is doing to encourage more youngsters to study history at GCSE and A-level?

[Mr Speaker]

Order. Any expounding will have to be brief.

[Michael Gove]

Top historians such as Niall Ferguson, Simon Schama and even the hon. Member for Stoke-on-Trent Central (Tristram Hunt) have all pressed on the Government the need to ensure that history is taught as a connected narrative. I agree with them.

[Tristram Hunt (Stoke-on-Trent Central) (Lab)]

May I congratulate the Secretary of State on attracting the likes of Simon Schama and Niall Ferguson to advise the Government, although quite when they last saw the inside of a British classroom is open to debate? However, is the real issue not the syllabus, but the fact that the average 13-year-old has only one hour of history a week for 32 weeks a year, thanks to the growth of citizenship and other well-meaning additions to the syllabus that surely need to be pulled back?

[Michael Gove]

I enjoyed the hon. Gentleman’s searing attack on curriculum changes introduced under the last Labour Government, appreciate his commitment to the better teaching of history and note, also, the mildly envious tone in his remarks about Simon Schama and Niall Ferguson. However, I can assure him that a copy of “The Frock-Coated Communist” is on my shelves as well, so his sales will certainly be improving—although, whether they can match Niall’s and Simon’s remains to be seen.

[Philip Davies (Shipley) (Con)]

I welcome the Secretary of State’s commitment to the teaching of British history, and I hope it will be done in a way that allows us to be proud of our country, rather than always apologising for our history. Does he agree that that can be done only if history is taught as a single subject? In many schools, it has been merged with other subjects such as geography. What can he do to ensure that history is taught as a single subject, so that people can learn properly about British history?

[Michael Gove]

My hon. Friend makes a good point. The changes we are making to the national curriculum and to accountability, through the English baccalaureate, will ensure that history is taught as a proper subject, so that we can celebrate the distinguished role of these islands in the history of the world, from the role of the Royal Navy in putting down the slave trade, to the way in which, since 1688, this nation has been a beacon for liberty that others have sought to emulate. We will also ensure that it is taught in a way in which we can all take pride.

[Bill Esterson (Sefton Central) (Lab)]

12. What plans he has to provide assistance for schools in planning their budget for 2011-12.

[The Minister of State, Department for Education (Mr Nick Gibb)]

It is for schools to plan their own budgets. The Department will ensure that a full range of tools and information is available to schools on its website.

[Bill Esterson]

Head teachers in my constituency have told me that the uncertainty they have in planning their budgets means that they have grave concerns about staff numbers and their ability to offer certain subjects to students. Will the Minister put those head teachers’ minds at rest by saying whether schools face a budget increase or a budget cut?

[Mr Gibb]

The overall settlement was clear: over the four years, there will be a real-terms increase in schools funding. How that is allocated will be announced later this year at a local authority level. Then it will be for local authorities to allocate that funding to schools in the new year.

[Patrick Mercer (Newark) (Con)]

The budget for the Grove school in Newark has been thrown into complete disarray by the fact that last week, owing to flooding, the collapse of boilers and external exams, key stage 3 teaching had to be suspended for 600 children on Thursday and Friday. What is the Minister’s vision for both the budget and the school itself?

[Mr Gibb]

It is tragic when schools are faced with the sort of problems my hon. Friend talks about. It is, of course, up to head teachers to decide whether to close a school in the face of such problems, and if the closure continues for a period, the school should provide work for those key stage 3 pupils to do at home, so that they do not fall behind in their work. However, I am happy to meet him to discuss measures to avoid such flooding problems in the future.

[Meg Munn (Sheffield, Heeley) (Lab/Co-op)]

13. What representations he has received on serious case reviews since the implementation of his Department’s requirement to publish them in full.

[The Parliamentary Under-Secretary of State for Education (Tim Loughton)]

We believe that publishing serious case review overview reports will help to restore public confidence and improve transparency in the child protection system, and ensure relevant lessons are learned and applied as widely as possible. I have received only a very small number of representations since the Government’s announcement on publishing serious case reviews on 10 June. I also considered comments received from relevant parties prior to publishing the SCR overview reports relating to Peter Connelly on 26 October.

[Meg Munn]

I know that the Minister is genuinely committed to improving child protection. In that spirit, will he give a commitment to examine the process of publishing serious case reviews in full so that in future we can, if necessary, amend the system better to protect families’ privacy and enable professionals properly to learn from mistakes?

[Tim Loughton]

I am grateful for the hon. Lady’s comments. She has great experience in this area. What she asks has already happened, and we commissioned Professor Eileen Munro on 10 June to undertake a review of how child protection works in this country. That will include how to improve serious case reviews to ensure that they are the genuine learning tools that we all desperately need them to be.

[Christopher Pincher (Tamworth) (Con)]

14. What recent representations he has received on standards of attainment in secondary schools in (a) Tamworth constituency and (b) England.

[The Minister of State, Department for Education (Mr Nick Gibb)]

No representations have been received on standards of attainment in secondary schools in Tamworth. However, we have received many representations about standards in secondary schools nationally. In 2009, 38.9% of pupils in maintained schools in Tamworth achieved five or more GCSEs at grade A* to C, including English and maths, compared with 50.9% in England as a whole.

[Christopher Pincher]

I am grateful for that answer. Is my hon. Friend aware that after 13 years of a Labour Government, children are still going to secondary school in Tamworth at the age of 11 with a reading age of eight or lower, which puts them at a disadvantage? What proposals do the Government have to enhance vertical integration between primary schools and secondary schools so that children have the best chance of high attainment when they go into those secondary schools, and do not have to play catch-up?

[Mr Gibb]

It is important for primary and secondary schools to work closely together, particularly at that transition point. Getting the fundamentals right is crucial to a child’s success in secondary education and throughout their adult life. The Government are committed to getting all children reading and writing to a high standard, which is why we are promoting the use of systematic synthetic phonics in primary schools and introducing a short reading test for six-year-olds, so that we can identify those who need extra help. We will say more about the age six reading test shortly.

[Fiona Mactaggart (Slough) (Lab)]

If the Minister is committed to increasing attainment, does he agree that children in secondary schools learn from each other, as well as from their teachers? If so, why will children in places such as Wokingham receive around twice as much pupil premium as children in places such as Slough?

[Mr Gibb]

Of course, we are still consulting on how the pupil premium will be allocated, but a problem with the current system is that 50% of funding that is allocated on the basis of need does not reach the school. The advantage of the proposed pupil premium—it will be £2.5 billion a year by the final year of the spending review period—is that every penny will reach the schools attended by those pupils.

[Mary Macleod (Brentford and Isleworth) (Con)]

15. What recent assessment he has made of standards of attainment in secondary schools in (a) Brentford and Isleworth constituency and (b) England; and if he will make a statement.

[The Secretary of State for Education (Michael Gove)]

In 2009, 59.7% of pupils in maintained schools in Brentford and Isleworth achieved five or more GCSEs at grade A* to C or equivalent, including English and maths, compared with just 50.9% in England as a whole.

[Mary Macleod]

I thank my right hon. Friend for that answer. Given that girls often perform better than boys at GCSE level, will he publish performance data by gender so that schools such as Isleworth and Syon school for boys are assessed fairly against other boys’ schools?

[Michael Gove]

One of the coalition Government’s commitments is to ensure that more data are published about attainment at every level to ensure that meaningful comparisons can be made between schools, and that we can learn from the best.

[Hazel Blears (Salford and Eccles) (Lab)]

16. What assessment he has made of the effect on the number of young people in the north-west who remain in further education of his decision to end education maintenance allowance.

[The Minister for Further Education, Skills and Lifelong Learning (Mr John Hayes)]

Where young people in the north-west are facing financial barriers to participation, schools and colleges will be able to agree whether they should benefit from the enhanced learner support, which will enable closer targeting of resources to individual student need.

[Hazel Blears]

I thank the Minister for that reply. The pupil premium is supposed to help the poorest children to succeed in education. How does that sit with the decision to abolish the education maintenance allowance, which currently supports 3,000 young people in Salford to stay on at 16? Is it a case of confused policy making, or is it really a matter of robbing Peter to pay Paul?

[Mr Hayes]

The right hon. Lady will know that the evidence that I described in answer to an earlier question is clear about the ineffectiveness of EMA. That is supported by a letter that I received recently from north-west England from a teacher with 12 years’ experience in her area who said:

“I would like you to withdraw EMA”

because it is just not effective. We act on the basis of evidence.

[Ian Austin (Dudley North) (Lab)]

18. What assessment he has made of the likely effects on sport in schools of planned changes in his Department’s expenditure.

[The Parliamentary Under-Secretary of State for Education (Tim Loughton)]

The planned changes in the Department’s expenditure on school sport, beginning in 2011-12, will enable us to deliver on our coalition Government commitment to create an annual Olympic-style school sport event to encourage more competitive sport in schools.

[Ian Austin]

Just because the Secretary of State hated sport when he was at school, that is no reason to deprive today’s youngsters of the opportunity to take part. When we came to power, just two out of 10 youngsters did two hours of sport a week; today the figure is nine out of 10, as a result of the extra funding and support that we put in. How many will it be as a result of the Government’s cuts?

[Tim Loughton]

I welcome the hon. Gentleman’s new-found interest in sport from the Opposition Front Bench, because he had not asked any questions about it in his five years in the House previously. Since 2003, when the school sports partnership was introduced, £2.4 billion has been added to expenditure on sport in schools, and yet still, barely one in five students in secondary schools are involved in competitive sports against other schools. We think that we can get a much better deal by adjusting the way we do things.

[Brandon Lewis (Great Yarmouth) (Con)]

19. What recent representations he has received on standards of attainment in secondary schools in (a) Great Yarmouth constituency and (b) England.

[The Minister of State, Department for Education (Mr Nick Gibb)]

No representations have been received on standards of attainment in secondary schools in Great Yarmouth. We have, of course, received many representations about standards in schools nationally. In 2009, 46.8% of pupils in maintained schools in Great Yarmouth achieved five or more GCSEs at grades A* to C, including English and maths, compared with 50.9% in England as a whole.

[Brandon Lewis]

I thank the Minister for that answer. Can he give some reassurance to the head teachers and teachers in Great Yarmouth? Those I have spoken to have expressed huge frustration over the past decade or so at having to manage tick-box, centrally controlled systems, rather than being able to focus on their pupils. The new freedoms and choices that this Government are giving will allow teachers to go back to focusing on pupils’ needs.

[Mr Gibb]

My hon. Friend is absolutely right. Indeed, evidence from the OECD shows that the most successful education jurisdictions in the world are those with high levels of autonomy combined with clear external testing and accountability. Reducing the bureaucratic burden on teachers and heads is part and parcel of delivering that autonomy, as is the expansion of the academies programme. We are determined to push ahead with both.

[Clive Efford (Eltham) (Lab)]

T1. If he will make a statement on his departmental responsibilities.

[The Secretary of State for Education (Michael Gove)]

In an effort to ensure that the coalition Government’s commitment to greater transparency is fulfilled in every Department, my Department has published a full structural business plan. Later this week, it will also be publishing all expenditure incurred over £25,000, as well as the expenditure that has gone to the voluntary and charitable sector, charity by charity, on behalf of the Department and its arm’s length bodies.

[Clive Efford]

I am grateful to the Secretary of State for that answer, but can he say how Miss Rachel Wolf moved seamlessly from being his adviser in opposition to setting up the free schools network, then receiving a £500,000 grant from the Department for Education without any tendering process? If he cannot answer that question right now, will he undertake to write to me and explain why there was no advertisement or open tendering process for a contract of that size?

[Michael Gove]

I am grateful to the hon. Gentleman for his question. Rachel Wolf and those who work with the New Schools Network are doing a brilliant job. They are joined in doing that job by people from every party, including Paul Marshall, who is a supporter of the Liberal Democrats, and Sally Morgan, who used to work as a political secretary for the Labour party. [Interruption.] The right hon. Member for Leigh (Andy Burnham) will know that there were more than five organisations—there were eight, I believe—that were funded by the previous Secretary of State on the basis of no competitive process, including the Specialist Schools and Academies Trust, and the Youth Sports Trust. We have ensured that the best person is paid the going rate for doing a fantastic job.

[Amber Rudd (Hastings and Rye) (Con)]

T2. Although 23.3% of our pupils at primary school in Hastings are on free school meals, against an average of 15%, our head teachers are still concerned that the number of children eligible for free school meals is under-represented in my town and that some people are simply not signing up. We hope that the Secretary of State will be able to consider other ways of deciding who will be in receipt of the pupil premium, in addition to free school meals.

[Michael Gove]

We are consulting on a number of ways to ensure that the pupil premium can go to those children who are most in need. One advantage of using free school meals as a measure of eligibility is that they are clearly linked with household income, although I take my hon. Friend’s point that no measure of poverty is perfect. In particular, I would encourage all schools to ensure that those children who are eligible for free school meals take up that offer.

[Derek Twigg (Halton) (Lab)]

T5. The Minister used to be fond of giving quotations about the education maintenance allowance and saying that we were not listening to heads of colleges and schools or governing bodies, so let me read him a quotation from the principal of Halton Riverside college, who is one of the most respected principals around. He says:“I believe that the Department for Education has made the wrong decision and that disadvantaged young people in Halton will suffer as a result of this decision”.That comes on top of the £1.2 million cut in the education budget in Halton and the almost £100 million cut in Building Schools for the Future, which shows again that disadvantaged areas such as Halton are suffering disproportionately.

[The Minister for Further Education, Skills and Lifelong Learning (Mr John Hayes)]

The hon. Gentleman will understand that the Government are acting on the basis of evidence. I assure him that our determination is to ensure that disadvantaged learners are protected. He will know that the evidence conducted for the Department and for the Institute for Fiscal Studies suggested that the deadweight costs of the current arrangements were at 90%. That is not acceptable; he must understand that.

[David Mowat (Warrington South) (Con)]

T3. The comprehensive spending review has set out that we intend to spend £16 billion on about 600 schools during the spending period as a replacement for the Building Schools for the Future programme. The Secretary of State will be aware that a number of initiatives, pursuant to BSF, were lost in Warrington. When does he expect to be in a position to announce the results of his capital review?

[Michael Gove]

I expect to be able to announce later this year the findings of the capital review on how we can better allocate capital. My hon. Friend is absolutely correct to say that we are spending more than £16 billion on school buildings over the next four years, which is just under twice what was spent in the first eight years of the Labour Government.

[Mrs Linda Riordan (Halifax) (Lab/Co-op)]

T8. Will the Minister join me in condemning the presence of the British National party on any school governing body? Will he outline what plans the Government have to prevent this from happening?

[Michael Gove]

I am grateful to the hon. Lady for that question; she has a distinguished record as an anti-racism campaigner. She will be aware that the last Government looked at how to prevent members of the British National party from teaching in the classroom, and decided in the end that the current legislative framework was sufficient. We do not take that view. We are now looking to ensure that we do everything possible to prevent BNP members from being teachers. I very much take her point about the need to ensure that governing bodies and other organisations related to schools are not populated by people with a racist or extremist agenda. We will do everything in our power, consistent with commitments to basic civil liberties, to ensure that racists cannot poison the minds of young people.

[Matthew Hancock (West Suffolk) (Con)]

T4. The Secretary of State may be aware that over the last month there has been a double dose of good news in Haverhill in my constituency, where Castle Manor school has been awarded outstanding status for the first time and the Samuel Ward school has now become an academy. Will he visit these two schools with me so that he can learn about how they have achieved these improvements and also see how to ensure that those achievements will continue?

[Michael Gove]

I would be delighted to visit West Suffolk. It is striking that in the six months since the coalition Government were formed—and my hon. Friend took his seat—educational standards in that particular part of East Anglia have significantly improved.

[Mr Jim Cunningham (Coventry South) (Lab)]

T10. I noticed that in his reply to the question of my hon. Friend the Member for North East Derbyshire (Natascha Engel) about the education maintenance allowance, the Minister said that the Government would spend the money more wisely. Will he now tell us what he intends to replace it with and stop dodging the question?

[Mr Hayes]

I made it clear that we intend to replace EMA with the enhanced learner support fund, which will target money at the most disadvantaged learners. The problem with EMA—forgive me for repeating myself, Mr Speaker, but I think it is necessary to amplify the point—is its dead-weight costs and its ineffectiveness at reaching the people whom it is designed to help. We will put in place a more effective scheme. The hon. Gentleman must wait and see—[Interruption.] He must simply wait and see.

[Robert Halfon (Harlow) (Con)]

T7. Only this morning, I opened an enterprise centre in Harlow, which is desperately needed because unemployment there is among the highest in west Essex. What plans does the Minister have for supporting young people to develop enterprise and business schools? Does he agree with me that our economy would benefit enormously if schoolchildren were encouraged by teachers to become young entrepreneurs and—

[Mr Speaker]

Order. I must tell the hon. Gentleman that one question is enough.

[Mr Hayes]

In his short time in this House, my hon. Friend already has a proud record of championing practical learning, including entrepreneurship. He can be assured that practical learning in our schools will, under this Government, be treated with the seriousness that it simply did not enjoy under the previous Administration.

[Paul Goggins (Wythenshawe and Sale East) (Lab)]

I join my hon. Friends in telling the Minister that his policy on the education maintenance allowance is an absolute disaster for my young constituents. The Manchester college has opened a new sixth-form centre in Wythenshawe. It has taken on 180 young people this year and it aims to have 800 people on roll by September next year. Currently, 85% of them are eligible for EMA, yet he wants to take away that important financial support.

[Mr Hayes]

The hon. Gentleman will know that EMA is also being paid to many more advantaged young people than those whom he commends to the House. There is no determination on these Benches to add to disadvantage, but there is an absolute determination to ensure that the money goes to those who need it most.

[Bob Blackman (Harrow East) (Con)]

T9. Krishna-Avanti primary school, which is in my constituency, is the first state-sponsored school for Hindus in the country. The school, which has won an award for sustainable design, has just had an Ofsted inspection resulting in an excellent review. Will the Secretary of State agree to visit that community-led school, see it at first hand, and conduct its official opening?

[Michael Gove]

In this pre-Diwali season, I think we should pay tribute to the significant success of that Hindu school, and to the significant commitment of many Hindu parents to ensuring that our state education can provide respect for their faith along with a perfect preparation for the world of work and further study. I should be delighted to visit that outstanding school.

[Alex Cunningham (Stockton North) (Lab)]

What message has the Minister for the young disabled people in Abbey Hill special school, and in other schools in my constituency, who have enjoyed taking part in sport through the school sports partnership, but will no longer be able to do so because he has withdrawn the funds?

[The Parliamentary Under-Secretary of State for Education (Tim Loughton)]

The hon. Gentleman has only half the story. We will introduce a competitive sport ethos in schools which has been missing. We need to get much better bang for our buck than we get by spending £2.4 billion so that one in five secondary school age students can indulge in competitive sport against other schools. We want them to be doing much more, but we are not getting that at the moment.

[Annette Brooke (Mid Dorset and North Poole) (LD)]

What advice would Ministers give someone wishing to apply to become a trainee educational psychologist, bearing in mind not only the current freeze on recruitment, but the great need for an adequate supply of educational psychologists to improve education for those with special educational needs?

[The Minister of State, Department for Education (Sarah Teather)]

I am well aware of my hon. Friend’s interest in this issue. As I said to her a couple of weeks ago when she raised it in a debate on the Floor of the House, the current system for funding educational psychologists is just not working. Unfortunately, only 16 out of 150 local authorities have paid their contribution, although the money went into their baseline funding. That is not good enough, and the Department could not take such a risk. However, I am absolutely determined to ensure that the system changes, because I agree with my hon. Friend that educational psychologists are critical to our reform of special educational needs.

[Ann Coffey (Stockport) (Lab)]

What further plans has the Secretary of State to improve the take-up of free early-education places by the most disadvantaged families?

[Michael Gove]

I am grateful to the hon. Lady for her question and, indeed, for her commitment to this cause. As a result of the coalition Government’s careful stewarding of the nation’s finances, we are able to ensure that more disadvantaged two-year-olds will enjoy access to pre-school learning. We have also ensured that children of three and four will enjoy 15 hours of pre-school learning free, something of which the last Government were incapable. All that is against the backdrop of an historic deficit for which no one on the Opposition Front Bench has yet had either the courtesy or the bravery to apologise.

[Andrea Leadsom (South Northamptonshire) (Con)]

While I truly welcome the decision to provide 4,200 more health visitors, surely my right hon. Friend recognises that if the pupil premium does not start until a child is two years old, a valuable opportunity is being missed to build, in those first two critical years of life, the relationships between parents and children that have such a strong effect on those children’s subsequent ability to learn.

[Michael Gove]

I have a huge amount of sympathy with what my hon. Friend has said. The work that we are doing with the right hon. Member for Birkenhead (Mr Field), in alliance with the Minister of State, Department for Education, my hon. Friend Member for Brent Central (Sarah Teather), who is the Minister responsible for children and families, will ensure that we intervene early, particularly in order to help the most disadvantaged children to achieve their potential.

[Mr Chuka Umunna (Streatham) (Lab)]

My constituency is in the 19th most deprived local authority area in the country, and I can say with absolute conviction that the education maintenance allowance has been hugely effective in increasing participation rates there: 3,800 young people benefited from it last year alone. Can the Secretary of State guarantee that the more focused, targeted support that has been talked of will help a similar number, and may I also ask him what exactly it will involve? I am not very clear about that.

[Michael Gove]

I am grateful to the hon. Gentleman for his question, and I know that his commitment to improving educational standards in his constituency is absolute, but I should point out that this Government are increasing education spending by £3.6 billion more than the baseline we inherited. Moreover, we are doing that against the backdrop of a catastrophic economic inheritance. Our commitment to ensuring that educational spending goes—[Interruption.] The hon. Member for Cardiff West (Kevin Brennan)—[Interruption.] The hon. Member for—

[Mr Speaker]

Order. The Secretary of State is naturally a great enthusiast for debate. He must not be put off by sedentary chunterings, which should not take place. He should proceed uninterrupted with the full flow of his eloquence.

[Michael Gove]

I am not put off by these chunterings, Mr Speaker. What I want to hear from the hon. Gentleman and every single member of the Opposition Front-Bench team is one word: “sorry” for leaving this country in a desperate economic mess; “sorry” for leaving our poorest children falling behind the richest; and “sorry” for ensuring that our coalition Government have to clear up the mess that the crew of wreckers on the Labour Benches left behind.

[Mr Speaker]

I will give the Secretary of State a chance to calm down by calling Elizabeth Truss.

[Elizabeth Truss (South West Norfolk) (Con)]

Following the introduction of modular mathematics GCSE this September, which is down to the previous Government and is widely thought to be a worse preparation for A-levels than previous courses, what steps is the Secretary of State taking to ensure that the twin maths GCSEs are going to be rigorous, linear and observed by academics and learned societies?

[Michael Gove]

Our White Paper will reveal several steps that we will be taking to improve the learning of mathematics, and one of the key questions we will be asking at GCSE level is how a Government who left a £155 billion deficit can have the temerity to ask for more public spending.

[Julie Hilling (Bolton West) (Lab)]

As youth services nationally have already been cut by 30 to 40%, the cuts to the National Youth Agency are so severe that it will no longer be able to carry out the annual audit of youth work, and Ofsted is no longer to inspect youth work, how will the Secretary of State ensure the quality of youth service provision in future?

[Tim Loughton]

The hon. Lady underlines the great importance of engaging the young people of this country as proper citizens, which is why we are carrying forward the national citizen service programme, which will give an offer to every 16-year-old in this country to come forward so it can help their transition to adulthood by enabling them to do worthwhile things in the community, and it will therefore offer a positive message about the good things—the great things—young people in this country do. In the past, we have been too much down on young people. I want to see a Government who are committed to being positive for youth, and this Government are.

[Jessica Lee (Erewash) (Con)]

National adoption week took place in the first week in November, highlighting the plight of the many children in care who require a permanent home. What steps are this Government taking to address this pressing issue, not least when many children have to wait many months, if not years, to be matched with parents?

[Tim Loughton]

Adoption is a vital component in giving often deeply damaged children a second chance of a good, stable, loving family, and it is very worrying that recent figures showed a 15% fall. I am determined that we get rid of the political correctness and bureaucracy in the system that has meant that many children are waiting too long in care, often never getting the chance of a place in an adoptive family. We need to speed up the process and do away with political correctness and bureaucracy forthwith.

[Alison McGovern (Wirral South) (Lab)]

Evidence from the Royal Shakespeare Company, Arts Council England and others has shown the very real impact access to live theatre can have on the attainment of young people in schools. What specific discussions is the Secretary of State having with the Secretary of State for Culture, Olympics, Media and Sport to ensure that all young people can still access live theatre, especially those from low-income backgrounds?

[Michael Gove]

Shall I compare her to a summer’s day? [Interruption.] I am very grateful that appreciation for Shakespeare is something that unites both Front-Bench teams. I had an opportunity to talk to the RSC before the general election and I am committed, along with my right hon. Friend the Secretary of State for Culture, Olympics, Media and Sport, to ensuring that access to live theatre, and, indeed, to the very best of English literature, is at the heart of learning. I hope that the shadow Education Secretary, the right hon. Member for Leigh (Andy Burnham), will join me in that. I know he studied English at university, which is why I hope he will withdraw his recent comments against John Dryden, suggesting that that figure should not feature in the national curriculum.

[Several hon. Members]

rose—

[Mr Speaker]

Order. As usual, demand has exceeded supply and I wonder whether the show needs to be rerun.

G20 Summit

Monday 15th November 2010 Commons Chamber

15:34

[The Prime Minister (Mr David Cameron)]

With permission, Mr Speaker, I would like to make a statement on my visit to China and the G20 summit in Korea. First, however, I am sure that the whole House will want to join me in welcoming the liberation, at last, of Aung San Suu Kyi. Her tenacity and courage in the face of injustice has been truly inspiring. I spoke to her this morning to pass on the congratulations of everyone in this country on her release and her remarkable stand on democracy and human rights. We must now work to ensure that her release is followed by freedom for more than 2,000 other political prisoners in Burma and that this becomes the first step towards the people in Burma genuinely being able to choose the person whom they want to run their country.

In China and Korea, my main focus was on jobs and growth. In China, I led one of the biggest and most high-powered British business delegations ever. This helped to win new business for Britain worth billions of pounds, involving businesses all over the UK and cities across China. We strengthened our ties on trade, education and culture, all the while raising our concerns with China on issues such as human rights where we have a difference of view.

In Seoul, Britain had four priorities, the first of which was to continue to win recognition for the importance of fiscal consolidation, with those countries with the greatest deficits taking the fastest action. The second priority was to get a clear commitment from all countries to fight protectionism and take the steps necessary to boost global trade. The third priority was to help move development issues up the G20 agenda, and the fourth was to address the global imbalances that were at the root of the global financial crisis and which still hold back growth in the world economy.

I believe that we made good and important progress on all four of those priorities and I will now take each in turn. First, on fiscal consolidation, it is now perfectly clear what the consequences are if we ignore the dangers of large deficits—we see markets questioning our economy, interest rates rising, confidence falling and the economy back in the danger zone. That is where Britain was only a few months ago, but because of the measures we have taken that is no longer the case. Countries with larger deficits need to act on them and do so now. That was exactly the view of the G20. In Seoul, we agreed that

“failure to implement consolidation would undermine confidence and growth.”

We also agreed to

“formulate and implement clear, credible, ambitious and growth-friendly fiscal consolidation plans”.

There can be no clearer statement of our collective intent.

Secondly, on trade, as the world comes out of recession with some countries moving more slowly while others, including the new emerging powers, forge ahead, there are inevitable pressures in some quarters for protectionism. The G20 has been a vital forum in fighting to keep markets open. Increasing trade is the biggest boost and the biggest stimulus we can give to the world economy. It does not cost any money, it is not a zero-sum game and it creates wealth and jobs. So, against a background of rising protectionist pressures, the G20 reaffirmed its determination to learn the lessons of the past and avoid the trade barriers and beggar-my-neighbour policies that wrecked the economy in the 1930s. It refreshed its commitment

“to keeping markets open and liberalizing trade and investment as a means to promote economic progress for all”,

and pledged to

“roll back any new protectionist measures that may have arisen”.

On the Doha round, let me say that it is incredibly frustrating that this trade round is almost 10 years old and that world leaders say again and again that it is going to be completed, but that the situation still remains stalled. The longer it has gone on the more difficult it has got, because the world economy has changed so fast that the deal has become outdated. Both developed and developing countries are looking for more from the round. I do not want to raise hopes artificially but I think that some real progress was made in Seoul.

The language of the communiqué refers to 2011 as the “critical window of opportunity” and crucially refers to the “end game” of the negotiations. As I proposed at the Toronto summit, we have to make the deal bigger by having a wide, across-the-board negotiation. What changed at this summit is that the US said that if a good and fair deal comes forward it will be taken to Congress, so we all instructed our trade negotiators to put more on the table so that a deal can be done. I am determined that Britain should do everything it can to push this agenda forward.

Thirdly, on development, it is right that the G20 is now playing a bigger role in this issue. As well as the very richest nations, the new emerging powers have a huge role to play in helping some of the poorest people and countries. There is a real recognition of the importance of trade, infrastructure and finance in the Seoul agreement. I also raised the importance of continuing our aid programmes. Britain is keeping its promises on aid and I pressed others to do the same.

On the trade agenda, together with South Africa and with Ethiopia and Malawi, which were there to represent Africa, Britain mobilised the G20 behind

“the vision of a free trade area”

for Africa. Only 10% of Africa’s trade is within the continent of Africa, so knocking down the trade walls between African countries can help unleash economic growth, which will benefit them and us, too.

Fourthly, on imbalances, there are huge trade surpluses in some countries and deficits in others. According to the IMF, such balances are forecast to get worse, not better. Alongside protectionist pressures, we have seen the sign of so called “currency wars”. The G20 agreed the Seoul action plan, which included agreeing to move

“towards more market determined exchange rate systems”

and to refrain from “competitive devaluation of currencies”. However, the issue of trade imbalances goes beyond currencies. Just as countries with big budget deficits must cut public spending, which is right for them and for the world economy, so countries with big trade deficits need to save more, consume less, and export more. If that is not accompanied by higher consumption by surplus countries, world growth will be lower and protectionist pressures higher and we will repeat the mistakes of the past. In the end, it is as simple as that. By acting together, we can maximise world growth and cut world unemployment. Imbalance is not some obscure economic issue; it is about jobs.

Trade imbalances have also led to an imbalance of funds—a wall of money in the east and a wall of debt in the west. That was part of the problem that helped pump up some of the bubbles that led to the crash that affected us all. As part of the Seoul action plan, we agreed that we would

“pursue the full range of policies to reduce excessive external imbalances and maintain current account imbalances at sustainable levels.”

The issue of imbalances will never be solved overnight, but the key thing is that it is being discussed in a proper, multilateral way, with some progress being made.

On other issues, the summit also delivered important progress on financial regulation and the reform of global institutions. To those who say that the G20 is not effective, I say that the last Basel accord on capital ratios, Basel II, took nine years. With the G20 behind it, Basel III has been done in just 18 months. Reform of the IMF to make it more representative of the global economy has been discussed year after year. The G20 has finally got the deal done.

On climate change, President Calderon briefed the G20 on the plans for Cancun and we received a report from the UN Secretary-General’s high-level advisory group on climate change financing.

This summit delivered important progress in managing the tensions that are present in the global economy. In my visits to China and the G20 summit, we have protected and promoted our national interests. We have taken vital steps towards the strong, balanced and sustainable global growth that we need. We secured recognition for acting on the deficit, support for more action on trade and development and agreement on working to rectify the imbalances that threaten global economic stability. Ultimately, this will win more jobs and growth for Britain, and I commend this statement to the House.

[Ms Harriet Harman (Camberwell and Peckham) (Lab)]

I thank the Prime Minister for his statement and advance notice of it. We should all agree with what he said about Burma. As we celebrate the freedom of Aung San Suu Kyi, we must remember that there is still a long journey before there is a free and democratic Burma. I also welcome the release of Paul and Rachel Chandler. I am sure that the whole House wants to send them its best wishes. I welcome the Prime Minister’s work on his visit to China.

Turning to the G20 summit, I welcome the South Korean Government’s success in keeping development on the agenda. Development aid is important for the lives it saves, but, as the Prime Minster says, it makes an important contribution to global growth. I also welcome the fact that he pressed the G8 countries that were in Seoul to keep their promises on aid, as we are.

Turning to climate change, will the Prime Minister tell us how the promises made at Seoul will be turned into action at Cancun? We welcome the continuation of work to reform the financial regulatory framework that was set in motion at previous G20 meetings. The increased stringency of the Basel committee’s capital requirements is a welcome step in making banks across the world more stable, but further work is needed to implement those reforms, and we recognise that that is difficult. Will the Prime Minister tell us how to balance the need for financial stability with the need for economic recovery and growth?

We all know that, for the UK, global economic growth is always important. We are a trading nation. Jobs in this country depend on strong exports, which in turn depend on a growing global economy. Will the Prime Minister acknowledge that that dependence is even greater because of the decisions that he has taken on the economy here at home? Cutting public spending and increasing VAT will dampen domestic demand, and that will hit jobs. The Office for Budget Responsibility has shown that because of the cuts that he is making, Britain must increase exports by more than £100 billion just to sustain growth and jobs. How can that happen if our export markets are failing to grow?

Does the right hon. Gentleman recognise that the global economy on which we are now even more reliant is fragile? That is why this G20 was so important. The most recent figures show that growth in our largest export market, Europe, has halved and that the US is still facing high unemployment and slow growth. Does he acknowledge that with growing disagreements between major economies about currencies and trade restrictions, co-ordinated action through the G20 is more important than ever? Does he recognise that this G20 was a missed opportunity?

No one expected the problems to be solved overnight, but it is a problem that the summit provided no co-ordinated action to support jobs and growth worldwide, little progress on reaching agreement on currencies, particularly between China and the US, little assurance by way of anything practical to prevent a resurgence of protectionism, and no concrete action to restart the Doha round of trade negotiations.

This was the fifth G20 summit since the global financial crisis hit in 2008. During that time, the UK provided leadership for co-ordinated global action. Why did the Prime Minister fail to offer that leadership in the run-up to and at Seoul at such a crucial time for jobs in this country and for the global economy? The question that everyone is left asking is, what was his strategy? What was he aiming to achieve? Did he have any proposals for jobs and growth? What were they?

No one expected that the summit would be straightforward, but the problem is that no one even knew what the Prime Minister was trying to do. Tonight he will say in a speech that Britain is

“at the centre of all the big discussions. Producing the ideas.”

So what were his ideas for the G20 and what did he say in those big discussions? Is it not the case that because he has not taken action on jobs and growth in Britain, he cannot lead in the debate about jobs and growth internationally? Is it not the truth that because he refuses to recognise that the economic crisis was global, he cannot engage with international efforts to tackle it? Britain needed to send a statesman to that summit, but all we sent was a spectator. By watching from the sidelines of the G20, the Prime Minister has let Britain down.

[The Prime Minister]

Oh dear. First of all, it is lovely to see the right hon. and learned Lady back.

On the Chandlers, I very much agree with what the right hon. and learned Lady said. I spoke to Paul Chandler this morning. It is hard to imagine what that family has been through, and it is great that they are now safely in Kenya and are soon to fly home. I am sure the whole House will want to wish them well.

Let me try to answer all the right hon. and learned Lady’s points. On development, which is something that Britain very much puts on the agenda at such meetings—I spoke up very firmly about the pledges that we had made—she is right in one sense. We talk about global imbalances. There is a huge imbalance between the rich world and the poor world, and if we can get people in the poorest parts of the world to join the world economy, we will all benefit.

On climate change, the key point is we are prepared to sign up to another Kyoto-style period, but we have got to have global agreement where others agree to sign agreements as well. That is the point that we will continue to push. The right hon. and learned Lady raised a point about the introduction of the Basel III accords and how we balance wanting safety in our financial institutions with an increase in bank lending. That is one of the reasons why Basel III is phased in the way it comes in.

The right hon. and learned Lady raised the issue of the deficit and made the usual accusation that, in Britain, we are acting too fast in dealing with it. I just think that Labour is completely wrong about this. The alternative to dealing with the deficit would not be some beautiful period of uninterrupted growth; it would involve putting ourselves in the same category as countries in which interest rates are rising and confidence is falling. That is the alternative, and that is where she and her party would have landed us.

The right hon. and learned Lady said that there were great disagreements over currencies, but if she looks at the language of the communiqué—perhaps next time she will read it before writing her script—she will see a lot of agreement on not having competitive devaluations over imbalances. She is right to say that this issue is not going to be solved overnight; I said that in my statement. We are asking different countries to do different things in order to achieve a maximum global outcome. That is tough and difficult, but there was progress at the summit. I also heard direct from the Chinese about their plans to rebalance their own economies.

The right hon. and learned Lady asked what we had brought to the table. The idea of a pan-African trade deal was not on the G20 agenda; we put it on the G20 agenda. The idea of pushing further ahead on Doha by making the deal bigger was a French, German and British initiative that we did at Doha and that pushed the Americans and others to go further. On the issue of imbalances, the key compromise to get the Americans and the Chinese together was again something that was pushed very much by the Germans and the British.

I think that the right hon. and learned Lady is completely wrong about this. If Labour had been at this G20, it would have been completely isolated over the issue of the deficit. Everyone else in the room was signing a communiqué on how we have to take early action on deficits. That is the consensus, but Labour is completely outside the consensus. One group of people represented at the meeting was the International Monetary Fund, and I suspect that if she had been there, she would have been locked in a room with them.

[Sir Peter Tapsell (Louth and Horncastle) (Con)]

Did the G20 discuss the situation of the Irish banks which, because of the potential knock-on effects, could pose as great a threat to the world economy as did Lehman Brothers, AIG and Goldman Sachs in September 2008? If so, what view did the Prime Minister’s colleagues take of Chancellor Merkel’s stated determination not to allow her taxpayers to bail out the gamblers who made great fortunes by taking the risks that have created the present crisis, even if that led to the default of national banks?

[The Prime Minister]

My hon. Friend asks an important question. The issue of Ireland was not specifically discussed at the G20. A statement was issued by a number of European Finance Ministers, including my right hon. Friend the Chancellor of the Exchequer, about the mechanism that will be put in place in the eurozone, because there was a concern that what had been thought about was having a negative impact on Ireland. Obviously, eurozone and European Prime Ministers and Finance Ministers at these gatherings always meet and discuss the health of the European economy and the eurozone. I do not want to speculate about another country’s finances. I recognise that the Irish are taking very difficult action to try to get their own fiscal situation under control. Like the United Kingdom, they obviously have very large banks that have got themselves into difficulty and that have to be managed out of the process. We very much hope that all that will take place.

[Mr Denis MacShane (Rotherham) (Lab)]

I welcome the Prime Minister’s warm words on the release of Aung San Suu Kyi, but, a little to the north and east, in China, a fellow Nobel peace laureate, Liu Xiaobo, is rotting in a communist prison. Why did not the Prime Minister have the guts to mention his name and call for his release in public?

[The Prime Minister]

What I did, which was the right thing to do, was to have a very frank exchange about human rights with the Chinese in the meetings that we had, and I can tell the right hon. Gentleman that nothing and no one was off the agenda.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

May I associate myself and colleagues with the warm words about Aung San Suu Kyi and congratulate the Prime Minister on his mission to China?

I have read the communiqué, which contains an undertaking to ensure that we have a

“resilient financial system by reining in the past excesses of the financial sector and better serving the needs of our economies.”

What does that mean in practice for ending in the G20 excessive bank profits and bonuses and excessive use of tax havens?

[The Prime Minister]

There is very strong agreement that we need to deal with the issue of tax havens. My right hon. Friend the Chancellor made an announcement about that while he was in Seoul. We can see real progress in the G20 on the nuts and bolts of regulation, particularly of levels of capital through the Basel accords, but also progress covering the issues that the hon. Gentleman mentions. National steps should also be taken, and I know that he very much supports the bank levy that we have put in place, which is raising serious money. In a way, it is saying to the banks that it is right that they should now be making a contribution as we deal with our fiscal deficit.

[Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC)]

I, too, very much welcome the great news from Burma.

Industry and manufacturing remain at the heart of the Welsh economy. With the pound having weakened against a basket of currencies—it is down 25% since 2007—we should really be looking for an export-driven recovery. What has the Prime Minister been able to secure, through the recent trade mission and the G20 talks, that will aid that recovery and hopefully help Welsh and English manufacturing and industry?

[The Prime Minister]

A series of deals were agreed while my ministerial colleagues and I were in China, including a very large deal involving Rolls-Royce. It is also worth remembering that the trade mission that President Sarkozy spoke of included a very large Airbus deal, which I know has very positive effects for Britain and indeed Wales.

The hon. Gentleman is right to say that our export performance needs to improve. Obviously we have seen a change in the level of our currency, but I am focusing on ensuring that all the things that UK Trade Investment and the Government can do to help our exporters are in place. I will go on leading missions to fast-growing parts of the world. So far, in six months, I have been to Turkey, a very fast-growing economy that some people call “Europe’s BRIC”—a reference to Brazil, Russia, India and China. I have been in the largest trade delegation ever taken to India, and now in the largest one to China. I am going to keep up with that. I think it is important that we get behind our exporters and help them to create jobs in our countries.

[Mr Peter Lilley (Hitchin and Harpenden) (Con)]

Can my right hon. Friend confirm that, should there be a rescue operation for any eurozone member under the European financial stability pact, the only reason why there is a danger that Britain may be required to contribute under qualified majority voting is that the last Labour Chancellor of the Exchequer shamefully signed up to that requirement after the election but before the coalition Government were formed?

[The Prime Minister]

My right hon. Friend is entirely right. The European financial stability mechanism, which was established just before this Government came to office, was established on the basis of qualified majority voting. It allows money to be spent with a budget that lies between the European budget and the own resources ceiling is, and yes, that money could be distributed in the way that he says.

That is not to be confused with the European financial stabilisation facility, which does not involve the UK. I also point out to my right hon. Friend that the treaty amendment that the European countries are looking at will not affect Britain’s potential contributions. However, he is right that the financial stability mechanism was established before this Government came to power and very much against our advice.

[Several hon. Members]

rose—

[Mr Speaker]

Order. I point out that Members who came into the Chamber after the Prime Minister started his statement should not expect to be called. That is the convention, and we are sticking to it.

[Keith Vaz (Leicester East) (Lab)]

Did the Prime Minister have an opportunity to discuss with President Obama and others the situation in Yemen? After the bomb was discovered at East Midlands airport, the Prime Minister rang President Ali Abdullah Saleh, and he knows that the situation is absolutely desperate there. What help can we give countries such as Yemen?

[The Prime Minister]

The right hon. Gentleman makes an extremely good point. I did discuss that with President Obama. What is happening in Yemen should be absolutely at the top of the list, because of the al-Qaeda threat that is coming out of that part of the Arabian peninsula. President Obama and I agreed that we have to take a mixture of steps. One of the problems is encouraging President Saleh to see that the al-Qaeda threat is a threat to his own country and needs to be top of the list of what he wants to address. Obviously Yemen also faces problems with rebels in the south and Houthi rebels in the north, but we have to convince it that the al-Qaeda threat is a threat to all of us and to the security of the world, and that is what we will do through aid, through the Friends of Yemen process and through every other means at our disposal.

[Mr Edward Leigh (Gainsborough) (Con)]

The deputy leader of the Labour party asked my right hon. Friend what his agenda is. Is his agenda that when he returns in triumph from his 10th or 20th G20 conference, he can tell the House that he has turned round our economy by creating a small-government, flat, low-tax and privatised economy?

[The Prime Minister]

My hon. Friend gives me an extremely good script. My agenda at such gatherings is to stand up for Britain’s national interests. Above all, as a trading nation, that is about keeping the markets of the world open, and making sure that British business can create wealth and jobs around the world. That is the agenda we should have. When we are trying to get our economy growing at home, it is very important that we focus on those things that most help us back here in Britain.

[Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)]

I listened carefully to what the Prime Minister had to say about competitive devaluation and rebalancing the Chinese economy. Will he say precisely what the Chinese agreed to do about the renminbi, and what he thinks is the most desirable action?

[The Prime Minister]

There are two points, the first of which is on what is in the communiqué. Everybody signed up to avoiding competitive devaluations and moving towards market-led exchange rate systems. I accept that those are words, but they are positive. The fact is that China and America are discussing their differences and issues in a multilateral agenda. The second point is that it is in the interests of China itself, and indeed in its five-year plan, to see a growth of domestic demand as the next driver of its economy. That is good news for Britain, America and the deficit countries, but it is also in China’s own national interest. We should try to flag that up whenever we talk to the Chinese about that.

[Mr William Cash (Stone) (Con)]

Will my right hon. Friend accept my enthusiastic applause for his principle of free trade, the growth of small businesses and all that goes with that in international affairs? Will he explain how he will achieve that without achieving competitiveness in the European Union—the imperative competitiveness to which he has referred in the past—and deregulation, including the repatriation of social and employment legislation from the EU to the UK?

[The Prime Minister]

I thank my hon. Friend for his question. My point—this is perhaps the point of difference between us—is that although I think the EU has taken too many powers and become too federal, as it were, I believe that at the moment quite a lot of like-minded EU Governments are on the centre and centre right of politics. They want deregulation, competitive markets and an agenda that means that we can reform the structures of our economies and get growth. That is true of the Germans, the Dutch, the Swedes, the Danes and many others. They are natural allies for us and we should push forward the deregulation agenda in Europe. I intend to do so.

[Mr Ronnie Campbell (Blyth Valley) (Lab)]

Is the Prime Minister confident that there will be no currency war? If there is a currency war, how will it affect Britain?

[The Prime Minister]

Obviously, we will not benefit from pressures between America and China over trade and currencies. They are the No. 1 and No. 2 economies in the world, and it is in our interests to anchor them in the G20 where we can discuss those things rationally, rather than see the eruption of trade and currency wars. No doubt there are big protectionist pressures in the world today, but they are very much against our interests, because we export more per head of population than most other countries in the world. We must therefore keep those markets open. That is why we must work so hard through forums such as the G20 to make sure that that happens.

[Dan Rogerson (North Cornwall) (LD)]

I hope the Prime Minister had the opportunity to visit the Great Wall—he knows from our previous discussions how important ancient boundaries are to me.

In answering other hon. Members’ questions on the currency issue, the Prime Minister has repeatedly referred to positive progress between China and America. Will he take every opportunity to ensure that the voice of this Government is felt keenly in those discussions?

[The Prime Minister]

I thank my hon. Friend for his question. I was worried for one minute that he was about to build the Great Wall of China along the Tamar river. For those of us who still enjoy holidaying in Cornwall, that would be a bad step—we might not be allowed in!

We should not overstate our influence, but nor should we understate it. Britain is an economy and country that is listened to in such forums. We are always in the vanguard of arguing for free trade and against protectionism, and we try to bring countries together, as we did with the Germans, to try to help to broker agreement on imbalances, and to make sure that the G20 can move forward.

[David Simpson (Upper Bann) (DUP)]

I understand the Prime Minister’s point on protectionism and the imbalance. There has been good news about exports and we need to keep that market open, but how do we protect British industry from imports from countries such as China that have very low-wage economies?

[The Prime Minister]

I think that would be a mistake; I do not believe that protectionism works. If we took the view in this country that we should raise some trade barriers to Chinese goods, we would just be putting off the day when we have to be more competitive, work out how to get up the value chain and produce goods that the Chinese want to buy. I am more optimistic; I think that when we see the Chinese economy develop and we see a growing Chinese middle class, we will find that they will want the goods, brands and services that we produce in this country. I think that we should be more confident, recognising that free trade has been a great growth motor for the world economy and is not something we should fear.

[Mark Pritchard (The Wrekin) (Con)]

Although nobody in the British Government is suggesting bailing out the Irish economy, is it not the case that 40% of UK trade takes place within the eurozone and that a stable Ireland and a stable eurozone is very much in the UK national interest?

[The Prime Minister]

My hon. Friend makes an extremely good point. Not only that, but Ireland is an enormously important trading partner for Britain. It is a fact that we export more to Ireland than to Brazil, Russia, India and China combined. That is a rebuke to us, because we have to do better with those other countries, but Ireland is an extremely important trading partner, and stability and success in the Irish economy is very much in Britain’s interests.

[Valerie Vaz (Walsall South) (Lab)]

I thank the Prime Minister for making representations to free Aung San Suu Kyi. He said that nothing was off the agenda. Will he say whether he discussed Iran in general and, specifically, the case of Sakineh Ashtiani?

[The Prime Minister]

I did have discussions about Iran, particularly with the Chinese, but also with other world leaders at the G20. The point we are continually pushing is the importance of maintaining the sanction regime and making sure it holds, because it is potentially having a huge impact on the Iranian regime and we should keep it up. I did not raise the specific case that the hon. Lady mentions, but I have raised it in other ways with others.

[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

Does my right hon. Friend agree that as part of our plan to rebuild the broken economy left to us by the Labour party, supporting science and technology-based companies, of all sizes, is vital? What practical measures are in place following the confirmation of the free trade agreements that he got at the summit?

[The Prime Minister]

First, we are not making reductions in the science budget. It is being frozen in cash terms, and that is absolutely right. Secondly, the next group of Ministers to go to China will include my right hon. Friend the Minister for Universities and Science. He will go out there for specific talks, because the Chinese want to examine the specific areas where they can link up with us. In terms of scientific research, Britain already does more partnering with Chinese scientists than many other countries.

[Chris Williamson (Derby North) (Lab)]

Two years ago, the then British Prime Minister galvanised world leaders to prevent a worldwide recession from turning into a worldwide slump. Because of this Prime Minister’s cuts in public spending, companies in my constituency will rely more on the export market and his policies will throw at least 1 million people out of a job. Can he explain to the House how his being a spectator at this year’s G20 summit will assist the companies in my constituency to secure the foreign orders that they desperately need?

[The Prime Minister]

If the hon. Gentleman wants to help businesses in his constituency, he should stop talking the British economy down. Whatever he says about the previous Prime Minister, who is not here today to join in the discussions, the fact is that the right hon. Gentleman left Britain with the biggest budget deficit in the G20. When we looked at the countries around that table, which included those such as Argentina, we found that we had a bigger budget deficit than they did. That is why we are having to deal with the deficit—the mess that the previous Prime Minister left behind.

[Charlie Elphicke (Dover) (Con)]

My constituents in Dover and Deal will find the Prime Minister’s focus on jobs, money, the national interest and sorting out our house refreshing. Will he tell the House more about how his work with India and China and trade missions there has helped our economy? Did it strengthen us at the G20?

[The Prime Minister]

Some people say that it is quite old-fashioned to pile an aeroplane full of business leaders and fly them off to India, China and the rest of it. I do not agree. It is important to try to bash down the door in order to secure trade in different countries, and the enthusiasm and energy that you show does actually have an impact, because you want to make sure that Indian universities are looking to link with British universities and Indian firms are looking to link with British firms. So, yes, making a bit of noise and taking a good team of business leaders over does make a difference, and I think that we will see trade, jobs and two-way investment as a result.

[Chris Bryant (Rhondda) (Lab)]

One of the inequalities in the world is the tax haven status that many territories enjoy. It has a profoundly deleterious effect on the economies of some of the poorest countries in the world, so does the Prime Minister believe that Cayman should maintain its tax haven status, or will he take action to prevent it from retaining that status?

[The Prime Minister]

We do work hard to try to deal with the issue of tax havens, because every pound not paid in tax to the UK is a pound that we have to raise from somewhere else, and we have been working hard on that agenda. We have just done a very good agreement with Switzerland, and that will result in a huge amount of extra tax revenue being collected.

[Julian Smith (Skipton and Ripon) (Con)]

May I congratulate the Prime Minister on the billions of pounds’ worth of deals done on his recent trip? Will he pay tribute to UK Trade & Investment’s role and please ensure that it keeps replicating that improved performance for British business and, particularly, Yorkshire business over the coming months?

[The Prime Minister]

My hon. Friend is right to speak up for UKTI. It does an incredibly important job linking British businesses with businesses the world over. One of the things that I have found in the past is that, while other Ministers visiting this country have always had a very clear list of the bilateral deals on which they have wanted to see progress and action, we in this country have not been as good at that. It is about time that we were, and I am making sure that that happens.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

The Chancellor has been promising international progress on the financial activities tax since way before the summer. Why did the Prime Minister fail to make more progress on that issue at the G20?

[The Prime Minister]

That issue is being discussed, but it is a difficult issue on which to get agreement from all G20, or even all EU, members. That is one reason we pushed ahead with the bank levy. The previous Government took the view that a bank levy could not be introduced until everyone agreed, but we would not have that revenue, and we would have to find it from somewhere else, if we had not taken the right, unilateral and brave action to put in place a bank levy.

[Joseph Johnson (Orpington) (Con)]

Will the Prime Minister join me in welcoming to Westminster today the large delegation of Indian chief executives, many of whom he met on his trip to India in July, who are here to discuss ways of deepening trade and investment ties between the UK and India?

[The Prime Minister]

There is a very impressive team of Indian CEOs, some of whom are here to discuss climate change, green-tech jobs and how we can exchange technology and investment between our economies. That is an incredibly promising agenda. We have a very good green-tech sector and a lot of expertise in technology, and many other countries—India, in particular, perhaps—would like to see that technology brought to bear in their own countries, which, again, means jobs for them, jobs for us.

[Alison McGovern (Wirral South) (Lab)]

Keeping the economies of low-income countries open is one thing, but growth is quite another. What agreements was the Prime Minister able to make on infrastructure investment for low-income countries?

[The Prime Minister]

One of the things that we are able to do, by having an aid budget that is rapidly growing and meeting our 0.7% target, is to make infrastructure investments in developing countries, and we will go on doing that. It gives Britain some leverage in the world, because you are able to look around that table and ask others to step up to the mark and meet the promises that they have made.

[Andrew Selous (South West Bedfordshire) (Con)]

Does my right hon. Friend think that this country might export more to China if more of us spoke Chinese? If so, does he think that the matter should be looked at in the education system?

[The Prime Minister]

I do. My hon. Friend is entirely right, and that is why the Education Secretary, who was on such robust form earlier, was in China with me, signing an agreement with the Chinese Government on the teaching of English in China, but also the teaching of Mandarin in our schools. It is extremely—[Interruption.] The Education Secretary speaks perfect English; I do not know what hon. Members are talking about. However, I think that the agreement is a very important step forward.

[Toby Perkins (Chesterfield) (Lab)]

For much of the past decade, Ireland was held up by Conservative Members as an example of the direction in which we should have been taking our economy. Now, because Ireland has followed a strategy that largely involves having the same medicine that the Prime Minister is recommending for this country, it is seeing markets questioning its economy, interest rates rising and confidence falling. What lessons has the Prime Minister learned from the situation in Ireland?

[The Prime Minister]

I think that the biggest lesson is that the Irish followed one key new Labour policy, which was to join the euro. Fortunately, new Labour did not have the courage and bravery to follow through its own manifesto and listened very carefully to my right hon. Friend the Member for Richmond (Yorks) (Mr Hague), who fought a very strong campaign to keep us out of the euro.

[Matthew Hancock (West Suffolk) (Con)]

I welcome the language in the communiqué on imbalances and the recognition that more needs to be done. Given the clear language in the communiqué and the support for dealing with deficits, can the Prime Minister think of any credible group that now opposes action on the deficit?

[The Prime Minister]

It is difficult to find a group that is against dealing with deficits. I think that even Cuba has now recognised that we need to take action—and that is the point. The G20 is united in the fact that we need to deal quickly with large and excessive deficits. That was the conversation around the table, and that is what is in the communiqué. There is only one group of people I can think of who would have been in the deficit denial corner: the Labour party.

[Damian Hinds (East Hampshire) (Con)]

On aid, does my right hon. Friend agree that, as well as the altruistic aim, there is also self-interest, both in reducing the number of lawless places in the world and increasing gross world product, which benefits everybody? Does he agree that in these difficult times the case must be made repeatedly to the public that such investments are perfectly rational, when well-targeted and, crucially, when the G20 is acting in concert?

[The Prime Minister]

My hon. Friend is right. We have to make this argument, because there is no doubt that a lot of people in our country look at a growing aid budget and think that that is money not well spent; they think that that money should be spent elsewhere. We have to make the argument that this is not just a moral argument about relieving poverty in the poorest parts of the world; it is also about avoiding conflict and about investing money upstream so that we do not end up with the Afghanistans and other broken countries. When we look at places such as Yemen and Somalia, it is quite clear that we need to have active aid programmes to try to help stitch those countries back together before we reach more serious problems.

[Mr Geoffrey Robinson (Coventry North West) (Lab)]

The House will have admired the Prime Minister’s evasive action on the issue of Ireland. He must be aware that it was the very strong view of the previous Government that we should not go into the euro and we were successful in that respect. What lessons, apart from that, can he now draw from the Irish situation? The Irish have been exemplary in every respect in pursuing the course that he has embarked on, and they have ended up in the mess they are in at the moment.

[The Prime Minister]

I do not want to make life difficult for the Irish at a time when they are trying to take difficult decisions about their own economy. However, they had a consumer boom, a property boom and badly regulated banks—some of the mistakes made by the Government of whom the hon. Gentleman was briefly a member—and they added to that the issue of euro membership. I always think that the great lesson from the exchange rate mechanism is that the euro is the exchange rate mechanism without an exit, and that is the problem.

Legal Aid and Civil Cost Reform

Monday 15th November 2010 Commons Chamber

16:18

[The Lord Chancellor and Secretary of State for Justice (Mr Kenneth Clarke)]

With permission, Mr Speaker, I wish to announce today proposals for the reform of legal aid in England and Wales, and proposals for the reform of civil litigation funding and costs in England and Wales.

I have today laid before Parliament two documents, “Proposals for the Reform of Legal Aid in England and Wales” and “Proposals for the Reform of Civil Litigation Funding and Costs in England and Wales”, which consult on these issues; copies will be available in the Vote Office and on the Ministry of Justice’s website. The changes will require primary legislation and, subject to consultation, I hope to include proposals in a Bill as soon as parliamentary time allows.

I would like to apologise to the House, Mr Speaker, for the well-informed although not wholly accurate leaks of my proposals that appeared in the newspapers at the weekend, which caused me to bring forward this statement. I was hoping to abide by the convention of announcing this to Parliament, but it was obviously going to run for the week if I left it until Thursday to make the announcement.

Legal aid forms a vital part of a system of justice of which we are rightly proud. The Government strongly believe that access to justice is a hallmark of a civilised society. However, I believe that there is now a compelling case for going back to first principles in reforming legal aid. The current system bears very little resemblance to the one that was introduced in 1949. Legal aid has expanded, so much so that it is now one of the most expensive such systems in the world, costing the public purse more than £2 billion each year. It is now available for a very wide range of issues, including some that do not require any legal expertise to resolve. It cannot be right that the taxpayer is footing the bill for unnecessary court cases that would never have even reached the courtroom door, were it not for the fact that somebody else was paying.

The previous Government made many attempts to reform legal aid, conducting more than 30 consultations since 2006. However, successive changes have been of a piecemeal nature and have failed to address the underlying problems. I have gone back to basic principles to make choices about which issues are of sufficient priority to justify the use of public funds, subject to people’s means and the merits of the case. I have taken into account the importance of the issue at stake, the litigant’s ability to present their own case, the availability of alternative sources of funding and alternative routes to resolving the issue, as well as our domestic and international legal obligations.

My proposals have also been designed with the aim of achieving significant savings. No other Government in the world believe that the taxpayer should pay for so much legal aid and litigation as we do in the United Kingdom. We have made clear our commitment to reducing the fiscal deficit to encourage economic recovery. Last month’s spending review set out the scale of the challenge. My Department’s budget will be reduced by 23% over four years. Legal aid needs to make a substantial contribution to that reduction. I estimate that the proposals in the consultation paper, if implemented, will achieve savings of about £350 million in 2014-15.

I do not propose any changes to the scope of criminal legal aid. However, I propose to introduce a more targeted civil and family scheme that will discourage people from resorting to lawyers whenever they face a problem and instead encourage them to consider more suitable methods of dispute resolution. Legal aid will still routinely be available in civil and family cases where people’s life or liberty is at stake, or where they are at risk of serious physical harm or immediate loss of their home. For example, I plan to retain legal aid for asylum cases, for debt and housing matters where someone’s home is at immediate risk and for mental health cases. It will still be provided where people face intervention from the state in their family affairs that may result in their children being taken into care, and for cases involving domestic violence or forced marriage. I also propose that legal aid should remain available for cases where people seek to hold the state to account by judicial review and for some cases involving discrimination that are currently in scope. Legal assistance to bereaved families in inquests, including for deaths of active service personnel, will also remain in scope.

However, prioritising those areas requires that we make clear choices about the availability of legal aid in other areas. Therefore, we propose to remove from the scope of the scheme issues that are not, generally speaking, of sufficient priority to justify funding at the taxpayer’s expense. I therefore propose to remove private family law cases, unless domestic violence, forced marriage or child abduction is involved. I will continue to provide funding for mediation, which can benefit those involved in family disputes by avoiding long, drawn-out and acrimonious court proceedings.

Other cases that I am proposing to remove from the scope of the civil legal aid scheme include clinical negligence, where, in many cases, alternative sources of funding are available, such as no win, no fee arrangements. The cases I am proposing to remove from scope also include education, employment, immigration, some debt and housing issues, and welfare benefits, except where there is a risk to anyone’s safety or liberty, or a risk of homelessness. In many of these, the issues are not necessarily of a legal nature, but require other forms of expert advice to resolve.

I recognise that there will be some cases, within the areas of law I propose to remove from scope, that international or domestic law will require to be funded by the taxpayer. I therefore propose a new exceptional funding scheme for excluded cases. I want to ensure that those who can pay for or contribute to their legal costs do so, so that we ensure continued access to public funding in those cases that really require it for those who have little or no funds of their own. On eligibility, therefore, I propose that all clients with £1,000 or more of disposable capital should make a minimum £100 contribution to their legal costs, and that the capital of any prospective legal aid clients is taken into account when considering eligibility.

I also looked at how best to reform the way in which we pay lawyers who provide legal aid services. I want to ensure that criminal cases are resolved quickly and cost effectively, and that legal aid fee structures support that aim. In the long term, I propose to fulfil the recommendation that Lord Carter of Coles made to the previous Administration to move towards a competitive market to replace the current system of administratively set fee rates. It will not be possible, however, to fulfil that aim in the short term. I am therefore proposing some more immediate changes to the current fee structure.

I propose to ensure that in Crown court cases that could realistically have been dealt with in the magistrates courts, a single fixed fee for a guilty plea will be paid based on fee rates in the magistrates court. I also propose that the same fee should be paid in respect of a guilty plea in the Crown court regardless of the stage at which the plea is entered, and to do more to contain the costs of very high-cost criminal cases. These proposals complement other reforms to the justice system that I will be bringing forward designed to encourage cases to be brought quickly and efficiently to justice, so sparing the victim the ordeal of giving evidence in court unnecessarily, and sparing the justice system significant but avoidable costs.

It is important to strike a balance between the need to ensure that legal aid provision is innovative, efficient and good value for taxpayers’ money on the one hand, and ensuring that people can continue to access legally aided services where necessary on the other. I believe that more can be done to strike the balance. I propose to reduce fees paid in civil and family cases by 10% across the board, and to make similar levels of reductions in rising experts’ fees. I also propose to extend telephone access to advice through the Community Legal Advice telephone helpline, which has a high rate of public satisfaction, to help people find the easiest and most effective ways to resolve problems.

I am also consulting on proposals to make better use of alternative sources of funding for legal aid. In particular, I would welcome views on making use of the higher rates of interest generated on money invested in a pooled account used by solicitors to hold their clients’ money, and on making use of a supplementary legal aid scheme. Lastly, I seek views on how to make the administration of legal aid less bureaucratic for solicitors and barristers doing legal aid work. I recognise that processes have become overly complex, and I want to do what I can to simplify these, while remaining consistent with the highest standards of accounting practice.

Furthermore, on 26 July, the Government announced their intention to consult on implementing Lord Justice Jackson’s recommendations on the reform of civil litigation costs and funding arrangements. Sir Rupert Jackson’s independent and comprehensive report, published in January 2010, makes a clear case that the costs in civil cases in England and Wales have become too high, and he makes a broad range of recommendations for reducing those costs. I am convinced by Sir Rupert’s argument that achieving proportionate costs and promoting access to justice go hand in hand. I believe that the consultation proposals for the reform of civil litigation funding and costs presented today would help to rebalance access to justice with proportionate costs in civil cases.

In particular, Sir Rupert’s proposals would reform the operation of no win, no fee conditional fee agreements. CFAs are funding agreements under which lawyers are not paid if they lose, but may charge an uplift or a success fee of up to 100% on their base costs if they win. CFAs, as they currently operate, allow claims to be brought at no financial risk to individual claimants, but the other side of that coin is that CFAs impose substantial additional costs on defendants. The Government have already accepted the recommendations of my right hon. and noble Friend, Lord Young of Graffham's recent report on health and safety and the compensation culture, entitled “Common Sense, Common Safety”. His typically cogent report endorses Sir Rupert’s proposals.

The key proposal is to abolish recoverability of high success fees and the associated after-the-event insurance premiums in CFA cases. Under the current regime, defendants must pay those additional costs if they lose, and they may be substantial, as the success fee may be double the base legal costs. In addition, significant costs may arise from claimants’ purchase of after-the-event insurance. ATE insurance may be taken out by parties in such cases to insure against the risk of having to pay their opponent’s costs and their own disbursements if they lose. We are proposing that claimants should have to pay their lawyer’s success fee. They will, therefore, take an interest in controlling the costs being incurred on their behalf. That will also reduce the disproportionate costs burden on defendants.

We are also seeking views on implementing other recommendations by Sir Rupert, which are designed to balance the impact of these major changes, and in particular to assist claimants. The recommendations include a 10% increase in general damages to help the claimant to pay the success fee, and a mechanism of qualified one-way costs shifting. That would protect the vast majority of less well off claimants from having to pay a winning defendant’s costs and therefore reduce the need for ATE insurance.

We also propose to allow damages-based agreements or contingency fees in litigation before the courts. These are another form of no win, no fee agreement, under which lawyers may take a proportion of the claimants’ damages in fees. This would increase the funding options available to claimants.

Other proposals would further encourage parties to make and accept reasonable offers, and introduce a new test to ensure that overall costs are proportionate. We also propose to increase the modest costs that can be recovered by people who win their cases when they represent themselves without lawyers.

Taken together, my proposals complement the wider programme of reform that I will bring forward to move towards a straightforward justice system: one which is more responsive to public needs, which allows people to resolve their issues out of court using simpler, more informal remedies when appropriate, and which encourages more efficient resolution of contested cases when necessary. I commend this statement to the House.

[Several hon. Members]

rose—

[Mr Speaker]

Order. I have been hanging on almost every word of the right hon. and learned Gentleman for at least the past 13 years, if not for some time before that. Today, his statement was a little in excess of the usual required time, and I shall allow for that, of course, in the shadow Secretary of State’s response.

[Sadiq Khan (Tooting) (Lab)]

I am grateful to the Lord Chancellor for giving me advance sight of his statement, and I note his apology at the beginning of it. One must admire the mind-reading ability of senior journalists at The Sunday Telegraph and The Times. It was a huge discourtesy to the House, but it provided the advantage of 24 hours’ notice of a statement to be made on the Floor of the House. I am grateful to both Patrick Hennessy and Simon Coates for their ability to do just that.

The Green Papers on cutting legal aid and reducing civil costs are among the most important that the Government have published to date. Legal aid is one of the pillars of the welfare state, and was set up by the Labour Government after the second world war. It plays a crucial role in tackling social exclusion, especially in hard times such as now. It ensures that everyone may have access to justice, regardless of their means. Under successive Governments, the legal aid budget has grown to the point where it now stands at more than £2 billion. That is not sustainable, especially in the current economic context.

I have six questions for the Lord Chancellor. The previous Labour Government had moved to cap the legal aid budget, and to reduce it. We also planned to turn the Legal Services Commission into an Executive agency. Do the Government have any plans to introduce legislation to achieve that aim?

In recent years, we brought the principle of fixed fees into civil and family legal aid cases, introduced means testing into magistrates and Crown courts, and on the very day that the general election was called we signed off on cuts to advocates’ fees in the higher courts. We took these decisions because we recognised the need to reduce the legal aid budget. It is worth reminding the House that many of our actions were taken in the teeth of opposition, from both the legal profession and Conservative and Liberal Democrat Members. I am looking forward to hearing their contributions to this debate.

Let me be clear: had we been in government today, we, too, would have been announcing savings to the legal aid budget. That is a reality that we all have to acknowledge. The crucial questions are: where to make those savings, and how to spend the money that is left available. What equality impact assessment has the Lord Chancellor undertaken of the proposals? Our policy was—and is—to control the legal aid budget and get value for money for the taxpayer, while optimising services for people who need support the most. That is why we concentrated much of our investment on social welfare legal aid. Legal aid delivered has the power to change lives and save money. The housing possession court duty scheme, for example, saved thousands of people from repossession. It delivered a social and financial good. Are the Government committed to preserving that and similar schemes?

What balance do the Government intend to strike between civil and criminal cases? Can the Lord Chancellor explain why he is proposing more severe cuts in civil and family legal aid than in criminal legal aid? Can he say whether he agrees with the Attorney-General, who said that

“legal aid is no longer available for a large number of people who ought to be entitled to it”?

If so, in what areas does the Lord Chancellor intend to expand the provision of legal aid?

We will carefully consider the Green Paper on legal aid and the equally important paper on Lord Justice Jackson’s review of civil legal aid costs before we respond in further detail. I would note, however, that Sir Rupert Jackson argued against cutting the legal aid budget, and the Lord Chancellor has decided to ignore that view. In conclusion, the basic test that we will apply in both cases is whether the proposals will deliver a saving to the public purse while ensuring that no one is denied access to justice because of their means.

[Mr Kenneth Clarke]

Mr Speaker, if I may, let me first respond to your comments. When I finalised the statement before coming here, I realised that it was far too long, but the fact is that the subject is complex and the leaks were quite detailed but not wholly accurate, so it was necessary to go through it with some care, for those outside this House as well as those within it. I am grateful for the fact that my shadow spokesman was given a little more warning of some of the statement.

I congratulate the right hon. Gentleman on acknowledging that Labour would have been reducing the legal aid bill as well—I came well armed with quotations from him and all his colleagues about their intention to reduce the legal aid bill. Indeed, it featured in the Labour party’s manifesto at the election. It is starkly obvious that the England and Wales legal aid system has become far too expensive, and it is an obvious place to start tackling deficit problems, which has to be done on a logical basis. The Labour party had taken quite a lot of decisions and had made reductions, affecting criminal as well as civil legal aid, but the effect of what it did was largely to stabilise what had been the rapid growth of legal aid before that. Legal aid expenditure exploded in this county until about 1999. Thereafter, the Government wrestled with it, trying to bring it down, but they succeeded only in stabilising it. It is right to get legal aid expenditure back to something nearer to the norm in other democratic and common-law countries throughout the world, which we are far above at the moment.

We intend to go ahead with the last Government’s proposal to make an agency of Government to replace the Legal Services Commission. That will have to feature in our legislation when it comes. We have, obviously, done an equality assessment, to have a look at the impact on various sectors of the population. Apart from the fact that the decision will obviously have an impact on the legal profession, affecting both barristers and solicitors, more importantly, one has to look at what impact it will have on gender, ethnic minorities and the poor. It is inevitably the case, of course, that litigation, and legal aid in particular, tend to be focused on the disadvantaged groups in society. Some aspects of legal aid are more resourced by women, as well as men; nevertheless, we have to be mindful of that. We have done an equality assessment, and we believe that the impact of the changes is, on balance, justified by the public interest in ensuring that the taxpayer pays only where there is a public interest in having a dispute resolved.

The right hon. Gentleman referred to the balance between civil legal aid and criminal legal aid and asked why, on this occasion at least, the scope of criminal aid is not affected. First, we already spend more on criminal than civil legal aid in this country. The reason we do so is that it is absolutely essential in the public interest to see that justice is done in every case. It is an unfortunate feature of our legal aid system—I accept it, and we always have accepted it—that we often wind up giving it to people who turn out to be rather unattractive.

[Mr Jack Straw (Blackburn) (Lab)]

Or criminals.

[Mr Clarke]

Yes, or criminals.

Before bringing the full severity of law to bear on a criminal, however, we have to make absolutely sure that he is indeed the guilty party and that he has been given every chance to claim and demonstrate his innocence to save us from making a mistake. As the liberty of the subject is at stake in all serious criminal cases, we really cannot cut back the scope of criminal legal aid.

I think the reason why we spend spectacularly more than other countries on legal advice and litigation is that we have extended the legal aid system in the past to practically every kind of civil and family issue. That is why, when it comes to cutting back the scope, the present package on which we are consulting concentrates on those areas.

[Sir Alan Beith (Berwick-upon-Tweed) (LD)]

The Justice Committee will look forward to an early session with the Lord Chancellor on the details of his proposals. Are not the issues around education, employment, debt and housing, which he says do not require special legal expertise, those on which people do need help, which they currently get through LSC contracts, citizens advice bureaux and neighbourhood law centres? From where else will they get that help in future?

[Mr Clarke]

In some cases, as with housing issues where a person’s home is at risk and they may lose possession, we will continue to make legal aid available. Any cases involving the risk of homelessness or loss of liberty will still be covered by legal aid. The right hon. Gentleman gave a list and I will not deal with them each in turn, but they are all addressed in other ways than through litigation. Employment issues go before a tribunal, for example, and those tribunals were originally designed precisely to avoid representation by lawyers and legalism. They were designed to be more straightforward and accessible forms of justice. Debt certainly requires advice, but much of it is not so much of a legal nature as of a practical nature—advising how to cope with negotiating with creditors and sort out the management of the debts incurred. I agree with the right hon. Gentleman that citizens advice bureaux and other such organisations are a central source of this advice. We will have to consider how far we can continue to enable such organisations to step in and give a wider range of advice, which will be needed when we stop paying people to go to lawyers all the time, as we tend to on all these issues.

[Mr Straw]

May I endorse what my right hon. Friend the Member for Tooting (Sadiq Khan) said in every particular, including with respect to the commitment in our own manifesto to cut legal aid. The Lord Chancellor will understand that my right hon. Friend cannot endorse every particular of what is being put before the House at this stage, but he and I will, of course, examine the proposals with great care.

Let me ask the right hon. and learned Gentleman some specific questions about the proposals on criminal legal aid and guilty pleas. First, I have no argument with the principle, but is he certain that he will structure the payment systems to avoid giving any perverse incentive to lawyers, and therefore to defendants, not to continue to plead not guilty all the way through to the point of trial? That is a real danger.

Secondly, the right hon. and learned Gentleman says that where a case goes to the Crown court but it is judged that it should have been handled at the magistrates court, the fee will be paid only in respect of what would have been appropriate in the magistrates court. I understand that. Under the present legislation, however—I sought to change it, but the Conservatives, the Lib Dems and the other place overturned my attempt—defendants have an absolute right in either-way cases to take their case to Crown court. Unless the Lord Chancellor introduces primary legislation to change that, we are left with the odd situation in which the Legal Services Commission says that a case should not have gone to the Crown court while the defendant says that he has an absolute right to that under statute.

[Several hon. Members]

rose—

[Mr Speaker]

Order. I have also been hanging on almost every word spoken by the right hon. Member for Blackburn (Mr Straw) for the last 13 years, but now I know what is meant by those who say that lawyers are paid by the word.

[Mr Clarke]

We are working on incentives to stop them from being paid by the word outside the House, Mr Speaker.

I am grateful to the right hon. Member for Blackburn (Mr Straw) for what he said. We both know that any responsible Government who had won the last election—any parties that had taken office—would have cut the legal aid bill. I think we should all remind ourselves of that, because, as we know, all kinds of lobbies outside who are adversely affected will start coming to us and telling us that the whole spirit of British justice is being undermined by the threat to their particular activities. We simply have to do this, and I hope that we can achieve a fair consensus on the sensible way in which to proceed.

The question of cases in which people do not plead guilty early enough is very serious. I hope we will ensure that we remove perverse incentives from the system, if they exist. The sentencing proposals that I shall present will recommend further inducements to people to plead guilty at an early stage—not only in order to save money and prevent time from being wasted, but in order to prevent victims and witnesses from fearing that they will have to attend court and give evidence, when that is actually a waste of time because the defendant will plead guilty in the end.

As for the question of either-way cases and those who opt for jury trial, I am afraid that I am one of the many Members who do not agree with the right hon. Gentleman that we should address it. I have always been a firm defender of the principle that anyone has the right to opt for jury trial, and the House has resisted any attempt to erode that right in recent years. The last Government’s attempt to change the position was defeated in the House of Lords during the last Parliament, and my party was elected—as, indeed, were the Liberal Democrats—on the basis of a firm commitment to retaining it. It is not just that I do not want to throw myself on the spears; I genuinely agree with those who believe that we should not alter the current ability to opt for jury trial.

[Robert Halfon (Harlow) (Con)]

Following the decision to remove legal aid from clinical negligence cases, how will my right hon. and learned Friend ensure that the most vulnerable in such cases are protected, and are not exploited by ambulance-chasing lawyers?

[Mr Clarke]

At present, about half the total number of clinical negligence cases are brought on a no win, no fee basis, and about half are brought on legal aid. No doubt some are privately financed. No win, no fee is a perfectly suitable way of proceeding in clinical negligence cases. We have decided that that—as amended by Sir Rupert Jackson—is likely to be the way in which people will proceed in future. What we have done completes a process of steadily taking legal aid out of criminal injury claims, which has been going on for some years, and I commend it as a logical next step.

[Keith Vaz (Leicester East) (Lab)]

The last Government, of course, also cut legal aid. The issue is quality, and how we focus that legal aid.

This morning, by chance, I visited our old college, where I saw the portraits of former Lord Chancellors who had attended it. When the college puts up a portrait of the current Lord Chancellor—or he may even be entitled to a mini-statue in the grounds—how would he like the epitaph to read, in relation to legal aid?

[Mr Clarke]

The last Government made many changes to legal aid, which stopped the increase in spending throughout most of the past decade. I have tried to return to basic first principles, and to ask “What is legal aid for?” Let us now put in place a logical structure that is defensible and may last.

I have not the first idea what kind of statue or picture that the college that I share with the right hon. Gentleman might ever erect to me. I do not think that a mini-statue would do justice to my full stature, but I should be very flattered if anything at all were put up. However, I trust that the college will acknowledge that we have tried to create a logical and defensible system which can be afforded by a civilised democracy that needs a legal aid system.

I should probably experience more difficulty in persuading my legal friends and the legal institutions to which I belong of the wisdom of all this than in persuading my old college.

[Nick de Bois (Enfield North) (Con)]

I welcome the continuing support for asylum cases under legal aid, but I welcome even more the curbs on immigration cases under legal aid. Given that over the period of the last Parliament some £400 million was spent on combined asylum and immigration cases, can the Lord Chancellor confirm whether these proposals will make substantial reductions in that expenditure, and if so, can he give an idea of how much will be saved?

[Mr Clarke]

Yes, we certainly intend to confine legal aid in immigration cases to those where detention or liberty is an issue, or in respect of asylum to where there may be a duty to provide asylum to someone who has been facing persecution. Other than that, we will make considerable reductions in legal aid in immigration cases involving purely personal reasons, which can include someone who has come here on a student visa and wants to transfer to a different course. Many such cases will still be brought of course, but there is no reason why the British taxpayer should pay for legal aid. I hesitate to give an estimate off the cuff of how much we will save under that heading, and I should emphasise that all the estimates we are giving of how much we will save are, indeed, estimates, because successive Governments have found it very difficult to predict how much legal aid will actually cost. Much depends on demand in particular areas, which is often unpredictable and outside the control of the Government.

[Ms Karen Buck (Westminster North) (Lab)]

Legal aid plays a vital function in creating a level playing field between the powerful and the powerless, and, even at a lower level, it must continue to do that. There are none so powerless as children. Will the Secretary of State clarify how he believes that children’s interests should be protected, particularly in respect of special educational needs in what is an increasingly decentralised school system?

[Mr Clarke]

Serious issues arise for parents in educational cases, and, obviously, the interests of the children should be paramount, as they are in most other cases. The difficulty is that the problem to be resolved usually relies more on educational expertise than on the law, and too often we are financing people who argue about the process that has been followed to resolve problems, instead of finding the best way of resolving the merits of how best to teach the child, where the child should be taught, or what support the child should have. We believe it is simply not right for the taxpayer to help inject an element of what is really legalism into problems that should in the end be resolved taking into account the best interests of the child from an educational point of view. Some of these cases can be turned into enormous legal battles, which seem to me to be very far removed from the object of ensuring that a child is best educated in school.

[Mr David Nuttall (Bury North) (Con)]

One group of people my constituents in Bury North would like to see excluded from the scope of criminal legal aid are Members of Parliament. Will the Lord Chancellor ensure that, in future, legal aid is not granted to any Member of Parliament accused of wrongdoing?

[Mr Clarke]

Considerable adverse comment was made about the unfortunate case of our recent colleagues who succeeded in obtaining legal aid for their defence because, I think, their case was listed in a Crown court that had not yet introduced means-testing. I can assure my hon. Friend that all Crown court cases that might involve legal aid will be subject to means-testing in future, and although MPs are not paid a king’s ransom, all are likely to have resources that will put them beyond the reach of full legal aid, which some of our colleagues recently obtained.

[Sir Gerald Kaufman (Manchester, Gorton) (Lab)]

Taking into account the Lord Chancellor’s wish, stated this afternoon, to encourage more efficient resolution of contested cases, will he press the Legal Services Commission to negotiate a settlement with South Manchester law centre ahead of the scheduled judicial review next month, given that the LSC lost a judicial review to the Law Society at immense public expense on the same kinds of points? It is essential, both to my constituents and more widely, that the South Manchester law centre continues to be able to help people on low means.

[Mr Clarke]

I will inquire into the case that concerns the right hon. Gentleman, but I must point out that the Legal Services Commission is currently a totally independent body and is not subject to ministerial control. We propose to change its status and make it an agency, which would make it more directly accountable and would enable us to exercise more control over efficiency, but we would still proceed on the basis of having no ministerial involvement in individual applications for legal aid, as it would be quite wrong to seem to politicise individual cases. Nevertheless, I hope that the dispute is resolved rapidly and I shall make inquiries as to whether the speeding up of a resolution can be facilitated.

[Tom Brake (Carshalton and Wallington) (LD)]

Following the question of the Chairman of the Justice Committee, my right hon. Friend the Member for Berwick-upon-Tweed (Sir Alan Beith), and the Secretary of State’s very positive response about the role of the National Association of Citizens Advice Bureaux, is the Secretary of State willing to meet me and representatives of NACAB to discuss how it can carry on its excellent work in the wider fields of welfare benefits, homelessness and debt relief?

[Mr Clarke]

I have been considering this issue with colleagues and I shall continue to do so because we are concerned, more widely, about the present financial crisis affecting all kinds of outside bodies such as voluntary organisations and charities in many fields. Not-for-profit bodies such as NACAB are very important in giving the kind of advice and help that we are concerned with, so we will continue to look for a solution to that problem. I certainly promise the hon. Gentleman a meeting with me or the Under-Secretary of State for Justice, my hon. Friend the Member for Huntingdon (Mr Djanogly), who has put a great deal of work into producing this package.

[Mr Geoffrey Robinson (Coventry North West) (Lab)]

The Lord Chancellor will be aware that there is widespread understanding of his statement throughout the House, and his approach to this principled and rational discussion in no way undermines the continued, vital role for legal aid in our overall legal system. He must be aware of the correspondence that my office has had with his about certain law firms in Coventry that have carried out very good legal work on many good cases within the existing rules, but find it impossible to get paid for their work and are therefore opting out of the whole system of legal aid. Will he bear that issue in mind in the context of what he has said today?

[Mr Clarke]

I realise that we have had such problems. The LSC’s accounting has been criticised and its performance has not always been what it might—hence the complaints of late payment. The commission seems to have been making great efforts to improve its performance, which we hope to maintain. Obviously, we hope that the transition to the new agency arrangements, as first proposed by the previous Government, will not interrupt that. We will continue to make sure that we do not face straightforward complaints about late payment for services that have been rendered.

[Mr David Burrowes (Enfield, Southgate) (Con)]

First, I declare an interest as a legal aid lawyer. Given your earlier comments, Mr Speaker, I hope that that will have no bearing on the length of this question. Will my right hon. and learned Friend measure the success of his proposals in relation not just to the amount of public money saved but to greater access to justice, because there is not always a need for a contested hearing?

[Mr Clarke]

I hope to, but I hesitate to claim that we are providing greater access to justice given that we are taking quite a few things out of the scope of legal aid assistance. However, I share my hon. Friend’s hope that we will encourage better resolution of disputes, of which there are plenty of examples. The president of the family division, Sir Nicholas Wall, has talked about how, in many family cases, long, adversarial conflict proves not to be the best way of resolving differences between parents and certainly is not in the children’s best interests. There are plenty of other areas in which I hope definite advantage in resolving disputes will come from our proposals.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

Will the Justice Secretary try to estimate the impact of the proposals on the very poorest in society, particularly in our city of Nottingham? I know of welfare advice centres and citizens advice bureaux that will be in serious jeopardy of closing because of the way that the rules he has announced are skewed towards hitting the very poorest in society when it comes to welfare advice and housing. Can he assure us that he is not abandoning the very poorest in society to a desert in which they are left with no advice and completely without representation?

[Mr Clarke]

I realise the need for such services and I know that citizens advice bureaux are a particularly valuable source of advice for his constituents and mine in our area of Nottingham. I should point out, however, that not every bureau provides legal advice or gets legal aid and that bureaux have been eligible for it only since 2000, and we have moved into a situation in which some have become rather dependent on it. I can only say that I shall consider the problem. Legal aid probably never was the best way of financing such organisations and my colleagues and I will have to discuss whether some necessary measure can be introduced to ensure that wider advice is available, particularly to the most vulnerable in society. We are all agreed that the taxpayer should be involved only when people cannot reasonably be expected to pay at least a modest sum to get some advice of their own.

[Guy Opperman (Hexham) (Con)]

Given the restrictions that will apply in relation to education funding, can we be clear that there will be no legal aid funding, in whatever way, for special educational needs provision or other forms of education work?

[Mr Clarke]

Not normally, unless in an exceptional case we are under a legal obligation to provide legal aid. Education cases include all kinds of things, such as litigation regarding exclusion of particular pupils, and whether someone has been granted a place at the school of their children’s preference and so on. All such disputes can be litigated. The special educational needs cases are the most difficult. I repeat what I said before: these are educational problems, and there should be a process of resolving them that does not involve going all the way through the courts. I heard that the Supreme Court was hearing a special educational needs case. Although I am sure it came to the right decision, I am not sure whether it was the best way to resolve the problems of how to educate a particular child with particular problems.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

I acknowledge the rational and very thoughtful way in which the Secretary of State has approached this issue. As he seeks to deliver the aid, advice and mediation services as a network across the country, will he make sure that some sort of protection for the poor and vulnerable is in place so that they are not driven into the hands of exploitative private sector operators who will want to take their money for immigration advice and the like—advice that is often dud and costs far more than they can afford?

[Mr Clarke]

I agree with the thoughts that underlie the hon. Gentleman’s intervention. Let me make it clear that legal support for mediation remains important in the family field, and we believe that it is a much better way of proceeding. I will certainly bear in mind what the hon. Gentleman said about immigration advice. We have all known for many years that some of that advice, usually given by non-lawyers, to those having difficulties with the immigrations authorities is not very good and that the prices charged are rather unscrupulous. People are being taken advantage of by those who are affecting to help.

[David Mowat (Warrington South) (Con)]

Has consideration been given in this review to the further savings that may be achieved by addressing the structure of aspects of the legal profession? In particular, the criminal Bar enjoys a near monopoly in some courts, but still constrains new entrants into the profession in a way that keeps rates higher than they might otherwise be?

[Mr Clarke]

That question was asked more frequently many years ago. The exclusive rights of audience in the higher courts were lost some years ago. There are now quite a lot of solicitor advocates. I am not sure whether the shadow spokesman, the right hon. Member for Tooting (Sadiq Khan), was a solicitor advocate, but he could have been if he had wanted to be. The profession is not as closed as it used to be. Changes are about to take place on new business structures for legal practice of all kinds, which will produce a considerable transformation in some areas of legal practice. We are in a far more competitive situation than we used to be.

[Gareth Johnson (Dartford) (Con)]

As a practising solicitor, I welcome this long-overdue full review of the legal aid system. Will my right hon. and learned Friend reassure the House that we will retain a key principle of the criminal justice system, which is that no one who faces the realistic prospect of imprisonment and who cannot themselves afford to pay will be refused legal assistance?

[Mr Clarke]

Yes is the best and most straightforward answer to that. My hon. Friend underlines an absolutely fundamental principle of justice in any civilised society, so the answer is an emphatic affirmative.

Points of Order

Monday 15th November 2010 Commons Chamber

17:04

[Hilary Benn (Leeds Central) (Lab)]

On a point of order, Mr Speaker. At business questions last week, I asked the Leader of the House whether it was the Government’s intention, when the House considers the Fixed-term Parliaments Bill tomorrow, to provide injury time if a statement were to be made. The Leader of the House replied that it was not the Government’s intention to do so. I have written to you about this, Mr Speaker. I understand that there is a possibility of a statement tomorrow. I do not know whether you have been given any indication of that, but given that on the Parliamentary Voting System and Constituencies Bill, there were clauses that we did not have the chance to reach, even with injury time, and given that the Fixed-term Parliaments Bill is an important constitutional Bill, it is important that the House has proper time, if there is to be a statement. Have you had an indication from the Leader of the House that he has had a rethink and wants to come back to the House and give a different answer?

[Mr Speaker]

I am grateful to the shadow Leader of the House for his point of order, and for giving me advance notice of it. Moreover, I have of course received the letter from the right hon. Gentleman of Friday 12 November. First, I have not received any indication, formal or informal, of a statement tomorrow. Sometimes by this point I would have done, but by no means always, so there may be a statement tomorrow or there may not be. I do not know.

Secondly, I think the right hon. Gentleman would testify and the record shows that where matters are within the gift of the Chair, the instinct of the Chair is always to facilitate full and thorough debate and analysis of all matters of policy and legislation. Sadly, in relation to a matter of this kind, the decision—no matter how worthy the cause—is not in the hands of the Chair. It is a matter for the business managers. However, my eye has alighted upon the Deputy Leader of the House. The Leader of the House is not present and therefore cannot respond. The Deputy Leader of the House is present and can, if he so wishes, offer a response to the right hon. Member for Leeds Central (Hilary Benn). A simple nod or shake of the head will suffice.

[The Parliamentary Secretary, Office of the Leader of the House of Commons (Mr David Heath)]

rose—

[Mr Speaker]

Ah, we have enlightenment.

[Mr Heath]

It is not the Government’s intention to provide extra time tomorrow on the Fixed-term Parliaments Bill. It is the first day of Committee and there is at present no programme motion before the House for the conduct of business during that day, so I am confident that there will be plenty of time for the House to debate the important matters that will be put before it tomorrow.

[Mr Speaker]

The response of the Deputy Leader of the House has been noted and I am grateful to him for it.

[Mr William Cash (Stone) (Con)]

On a point of order, Mr Speaker. I understand that a few minutes ago, in the House of Lords, the motion to refer the Parliamentary Voting System and Constituencies Bill to a Select Committee with regard to the possibility of hybridity was rejected in a vote, but I would be grateful if we could be informed whether, in this House, such a motion would be out of order on the grounds that the Bill did not affect a particular private interest. I would be grateful if we could have a note on that.

[Mr Speaker]

The short answer to the hon. Gentleman is that that is not a matter for today. More fully, I think I know him well enough to know that he is unlikely to rest content with what I suppose he would judge to be a holding response. I have just a smidgen of a suspicion that it is a matter to which he will return on other occasions, and if he does, so will I. I hope that is helpful.

[Tom Brake (Carshalton and Wallington) (LD)]

On a point of order, Mr Speaker. I apologise for not giving you advance notice of this. At the end of last week, some visitors came to visit me in Portcullis House and as part of the security process, their papers—the documents that they had brought with them—were scrutinised. To your knowledge, is this standard practice? Is it something that you would expect to happen when visitors come to the House of Commons?

[Mr Speaker]

I do not wish to be unkind or unhelpful to the hon. Gentleman, but the stock answer to such questions or attempted points of order is that we do not discuss security matters on the Floor of the House. However, if he wishes to pursue the matter with me in other ways, of course I am open to hearing from him and I will do my best to provide satisfaction.

[Guy Opperman (Hexham) (Con)]

On a point of order, Mr Speaker. I probably should have declared earlier that I used to work in an educational capacity as a lawyer. I have given up that profession, but I am grateful for the opportunity to correct the record.

[Mr Speaker]

That is a display of legendary courtesy on the part of the hon. Gentleman, and it would be an excellent thing if it were imitated in all parts of the House.

Terrorist Asset-Freezing etc. Bill [Lords]

Monday 15th November 2010 Commons Chamber

[Relevant documents: The Northern Ireland Assembly Legislative Consent Resolution and the Fourth Report of the Joint Committee on Human Rights, Legislative Scrutiny: Terrorist Asset-Freezing etc. Bill (Second Report); and other Bills, HC 598.]

17:09

[The Financial Secretary to the Treasury (Mr Mark Hoban)]

I beg to move, That the Bill be now read a Second time.

The Bill makes provision for imposing financial restrictions on, and in relation to, certain persons believed or suspected to be, or to have been, involved in terrorist activities. It amends schedule 7 to the Counter-Terrorism Act 2008, and is for connected purposes.

Hon. Members will be aware that the threat to the UK from terrorist attack continues to be judged as severe, meaning that an attack is highly likely. Just a few weeks ago, intelligence agencies uncovered another plot designed to cause death and destruction to innocent people. As my right hon. Friend the Home Secretary revealed, those involved in that air cargo bomb plot were well connected and part of an international network of extremists.

It would seem that the terrorist threat that we face is developing. We see the continued emergence of a more diverse and devolved terrorist threat that is joined more by ideology than by hierarchy, and that is technologically very capable. Small networks, or even individuals acting alone, are able to use technology to their advantage, giving them the ability to wreak havoc worse than their size might suggest. It is clear that those who wish to do us harm operate on an increasingly global scale and are devising ever more sophisticated methods of avoiding detection. This is why we must continue to ensure that the tools we employ to combat terrorism remain effective. We must have the ability to take preventive action to disrupt suspected terrorists.

[Keith Vaz (Leicester East) (Lab)]

I understand that 205 accounts have been frozen under the previous legislation. Does the Minister know whether there is any evidence of a link between any of those accounts and actual terrorist activity? I am not disputing in any way what the Government are doing, and I fully support the Bill, but I would like to know whether any connection has been made between those accounts and any kind of terrorist activity.

[Mr Hoban]

In regard to the Bill, and to the legislation that it will replace, assets are frozen where there is reasonable suspicion. The Bill will change that test in order to strengthen it.

Asset freezing is a tool that we can use to take preventive action to disrupt suspected terrorists, and it is used internationally to prevent and disrupt the financing of terrorism. The impact of our ability to freeze the funds of potential perpetrators should not be underestimated. By cutting off access to finance and preventing money from reaching terrorist networks, we can stop individual acts in their early stages.

Currently, around £140,000 is frozen in the UK under our domestic terrorist asset-freezing regime. That might not seem a large amount, but hon. Members will be aware that it takes only a relatively modest amount of money to carry out a deadly attack. By way of illustration, the dreadful attacks of 7 July 2005 cost less than £10,000 to carry out, and the air cargo bomb plot is also likely to have cost a comparatively small amount.

[Keith Vaz]

No one is disputing the importance of this legislation or the legislation that it replaces, or the decision of the Supreme Court that has meant that this measure has had to be rushed through in this way. The Minister has not really answered my question, however; he has just given me some information about reasonable suspicion. Was there any connection between any of the accounts that have been frozen, for whatever reason, and any terrorist activity?

[Mr Hoban]

May I just dispute the right hon. Gentleman’s point about the Bill being rushed through? It has not been rushed through. The process, of which he might be aware, is that, following the Supreme Court judgment earlier this year, emergency legislation was taken through this House and the other place to ensure that the terrorist asset-freezing regime remained in place until the end of this year. At that point, the previous Government initiated a consultation on the way in which that legislation should be replaced. That consultation started earlier this year, and has continued. My noble Friend Lord Sassoon introduced this Bill in the other place, and further safeguards have been included in it as a consequence of the consultation process. I do not believe that anyone could say that the process has been rushed. It has taken place in the methodical and thorough manner required to balance civil liberties concerns with the importance of national security. Although I am not in a position to disclose the links between the accounts frozen and any activity, those accounts and the evidence are kept under review, and orders are lifted where it is felt appropriate.

Asset freezing is not just a domestic tool used by the UK to combat terrorist financing. We have an international obligation to freeze the assets of terrorists, and it is important to consider it in some detail. In 2001, after the 9/11 attacks, the UN Security Council unanimously passed resolution 1373, requiring states to take a range of measures to combat international terrorism and the financial flows that underpin it. The overarching objective of the resolution was to

“combat by all means…threats to international peace and security caused by terrorist acts”.

It was clearly intended to be preventive, and it calls on states to

“work together urgently to prevent and suppress terrorist acts, including through increased cooperation and full implementation of the relevant international conventions relating to terrorism”.

Those are broad provisions, and intentionally so. They reflect the Security Council’s real and unanimous commitment to take all necessary measures to prevent terrorism.

Although resolution 1373 is quite detailed in its obligations, the Financial Action Task Force, the international standard-setting body for anti-money laundering and counter-terrorist finance, has helpfully provided further detailed guidance on the implementation of UN terrorist asset-freezing obligations. That guidance reflects the intention for the resolution to be preventive in its effect, which is an important consideration when we come to consider in more detail the appropriate legal test for freezing assets.

Particularly for the benefit of hon. Members who did not participate in our debates earlier this year, I should like to explain a little of the history behind the Bill and why we need to act now. Following the adoption of resolution 1373, the previous Government took the decision to implement UN terrorist asset-freezing obligations through secondary legislation, by Orders in Council made under the United Nations Act 1946. Following litigation brought by several applicants affected by one of those orders, which went all the way to the Supreme Court, that court ruled earlier this year that the previous Government had gone beyond the general powers conferred by section 1 of that Act in making Orders in Council to give effect to our UN terrorist asset-freezing obligations. The orders were not subject to parliamentary scrutiny, so Parliament did not have the opportunity to consider how the UK should best give effect to its obligations. The Supreme Court quashed the relevant order with immediate effect.

Many Members will remember that in response to the judgment, the previous Administration rushed through emergency legislation, with cross-party support, to maintain the asset-freezing regime and ensure that terrorist assets would not have to be unfrozen. No one in the House wanted to see the unfreezing of terrorist assets, and that was why my party and others were prepared to support the emergency legislation. At the same time, there was a strong feeling in the House that the terrorist asset-freezing regime needed to be scrutinised by Parliament in more detail at the earliest opportunity, and that there was scope to improve it by strengthening civil liberties safeguards. For that reason, Parliament inserted a sunset clause providing for the temporary legislation to expire on 31 December this year. That is why we are now legislating to ensure that the UK’s terrorist asset-freezing regime can be improved and put on a secure legislative footing in time for that deadline.

As the House will know, this Government are committed to striking the right balance between protecting public safety and protecting civil liberties. We believe that in a number of areas, it is possible to strike a better balance and strengthen civil liberties safeguards without undermining public safety. Terrorist asset freezing is one such area, and that is why the Bill is not intended simply to reintroduce the previous regime that the Supreme Court quashed. I shall explain that.

The Bill, as introduced in the other place, included several changes to strengthen the proportionality, fairness and transparency of the regime. Briefly, they included a narrowing of the prohibitions relating to third parties, so that a third party does not commit an offence if they did not know, or reasonably suspect, that they were breaching a prohibition; excluding payments of state benefits to spouses or partners of designated persons from the scope of prohibitions, even when those benefits are paid in respect of a designated person; and a new requirement that the operation of the regime be independently reviewed nine months after the Bill is passed and every 12 months thereafter.

To strengthen further the protection afforded to designated persons, the Government tabled significant safeguards before the Committee stage in the other place. Those additional safeguards reflect the civil liberties concerns that were raised in Parliament during the passage of the emergency legislation and in the public consultation conducted over the spring and summer.

First, we addressed the legal threshold that must be met before the Treasury can freeze a person’s assets. Under the current Order in Council, the Treasury may freeze a person’s assets on the basis that it reasonably suspects that they are involved in terrorism, provided that the Treasury considers that necessary to protect members of the public. Under the Bill, the Treasury can no longer rely on a threshold of reasonable suspicion if it wishes to make a designation lasting more than 30 days.

The Government consider that there is a good case for retaining a reasonable suspicion threshold for a temporary period of 30 days only. That will enable assets to be frozen when there is sufficient evidence to meet a suspicion threshold, but when, for example, investigations are ongoing, and there is therefore a reasonable prospect of subsequently meeting a higher evidential threshold. A good example of that is when assets are frozen alongside arrest while the police build the evidential case for bringing criminal charges, as happened with the freezing of assets in connection with the transatlantic plane bomb plot in 2006.

[Dr Julian Huppert (Cambridge) (LD)]

The Minister mentioned tying freezing to arrest, which I agree with, but can he give examples of when we might ever want the power to freeze assets without arresting somebody?

[Mr Hoban]

We might freeze assets in the UK that belong to terrorists who operate overseas in a more benign environment, when it would be difficult for us to secure the arrest of individuals given where they operate. There is therefore a strong argument for those powers. The hon. Gentleman will be as acutely aware as I am that his predecessor as the hon. Member for Cambridge led for the Liberals on the emergency legislation and raised a number of the civil liberties concerns that we are addressing in the Bill.

The Government do not believe that assets should remain frozen on the basis of a reasonable suspicion threshold for longer than 30 days. That is why the Bill makes it clear that to make a final designation—meaning one that lasts for up to 12 months—the Government can act only if we have a reasonable belief that a person is or has been involved in terrorism.

[Dr Huppert]

As I am sure the Minister understands, I am now trying to represent David Howarth—he is my constituent. What is the test of reasonable belief compared with, for example, the civil standard of the balance of probabilities? Is reasonable belief essentially the same, or is the Minister arguing for a lower standard?

[Mr Hoban]

The reasonable belief test is less than the balance of probabilities test, as I am sure the hon. Gentleman’s constituent is aware, but the Government believe that the measure strikes the right balance. The Bill is preventive, which explains why we have chosen a reasonable belief test rather than a balance of probabilities test.

The second major civil liberties safeguard that we have introduced involves strengthening judicial oversight of decisions to impose asset freezes. Under the current legislation, a court can review a decision to impose an asset freeze only under the judicial review procedure. The House of Lords Constitution Committee recognised that judicial review gives the courts a significant power of scrutiny, particularly when decisions have been made in a national security context. However, there were concerns that although the courts can use, and have used, judicial review as an effective power of scrutiny in control order cases, there is a lack of clarity about how the courts would operate judicial review in the context of asset freezing.

To address that and to provide clarity—we expect the courts to apply rigorous scrutiny to asset-freezing designation decisions—the Government have provided in the Bill that decisions to freeze assets will be subject to a full merits-based appeal procedure. By providing a full merits-based appeal, we can ensure that the same degree of scrutiny that is given, for example, in control order proceedings—effectively such proceedings are equivalent to a full merits-based review—is afforded to individuals subject to a designation. I wish to inform the House that I have put a schedule of the changes I have highlighted in this Bill in the Commons Vote Office, and I hope that will help hon. Members during today’s debate and in Committee.

I wish now to deal with the content of the Bill, beginning with the provisions under part 1. The effect of a designation under this legislation is threefold: 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 funds or economic resources being made available to a person when the designated person will consequently obtain a significant financial benefit.

Part 1 sets out the provisions allowing the Treasury to make a final designation, necessary to protect the public, where it reasonably believes that a person is or has been involved in

“the commission, preparation or instigation of acts of terrorism”

or

“conduct that facilitates the commission, preparation or instigation of acts of terrorism”.

It also sets out the provisions where the Treasury may make an interim designation, necessary to protect the public, where it reasonably suspects that a person is or has been involved in the commission, preparation, or instigation of acts of terrorism, or conduct that facilitates such acts. An interim designation expires at the end of 30 days, unless a final designation is made. Part 1 provides that the prohibitions are contravened only when someone knows, or has reason to suspect, that the person whose funds or economic resources they are dealing with, or to whom they are providing funds, economic resources or financial services, is a designated person.

The Bill also provides for licences, which permit exemptions to the freeze. I should like to point out that the Treasury’s policy is to issue an individual licence to designated persons straight away to enable them to carry on paying for their ordinary, everyday expenses. That minimises the immediate impact of an asset freeze on a designated person and their family. Any further licences, or amendments, can be applied for by the designated person, or by any person affected by the prohibitions, at any time. The Treasury has also issued a number of general licences, which allow certain transactions to occur without the need for a separate licence application to be made—for example, to ensure that a designated person can have access to legal aid without delay.

Part 1 also sets out the reporting obligations on the financial sector in relation to these provisions, and the Treasury’s general information-gathering powers to monitor compliance with, and detect evasion of, the regime.

[Dr Huppert]

Perhaps the Minister could help me. Nothing in the Bill makes it clear that the Treasury is required to make reasonable licences available. Is there an expectation of what the Treasury would allow?

[Mr Hoban]

Yes. As I have said, we have issued a number of licences, which I understand run alongside the regime that is in place. That is why I do not think the hon. Gentleman will find reference to a general licence on legal aid in the Bill. This runs in parallel to the legislative framework in place.

[Tom Brake (Carshalton and Wallington) (LD)]

The Minister will be aware that Lord Wallace of Tankerness said that

“the general presumption is that where a licence is requested to pay for legal costs, it will be granted.”—[Official Report, House of Lords, 6 October 2010; Vol. 721, c. 174.]

Does the Minister think there any circumstances in which a licence would not be granted to cover legal costs?

[Mr Hoban]

I do not want to get into giving hypothetical answers to hypothetical questions. If the hon. Gentleman has a particular concern and wishes to write to me about it, I shall be happy to respond appropriately.

Finally, part 1 sets out the obligations on the Treasury to appoint an independent reviewer and the penalties attached to breaches of the asset-freezing provisions. Part 2 makes minor amendments to the Treasury’s financial restrictions powers under schedule 7 to the Counter-Terrorism Act 2008. Those powers are an important part of the Government’s toolkit to deal with risks posed to the UK by money laundering, terrorist financing and the development or production of chemical, biological, radiological or nuclear weapons. They also enable the Government to take action where the Financial Action Task Force advises that counter-measures should be taken because a country poses a money-laundering or terrorist-financing risk. The risks that those powers address are of a serious nature and it is imperative that we have effective financial tools to tackle them. We have identified a small number of technical amendments to these powers.

First, we are introducing a prohibition on the intentional circumvention of any restriction issued under the powers in order to ensure that a restriction cannot simply be bypassed. That will prohibit anyone in the UK financial services sector who has to comply with the requirements of a restriction from intentionally rearranging their business to circumvent those requirements.

Secondly, we are introducing a provision to allow restrictions to be targeted against subsidiaries of companies based in the country of concern. Thirdly, we will clarify the point that, when the Government direct a UK financial or credit institution to implement a restriction, that restriction can apply across its branches, wherever located. Fourthly, we are making provision for the transfer from the Department of Enterprise, Trade and Investment in Northern Ireland to the Financial Services Authority the responsibility for ensuring the compliance of Northern Ireland credit unions with the requirements of a restriction.

This Bill, when passed, will create a secure legislative footing for an important and necessary counter-terrorism power. The Government recognise that such powers are not to be created lightly, and I am confident that the safeguards in the Bill strike the right balance between national security and the rights of the individual. This is the right course of action to protect our national security, to protect the freedom of our citizens and to prevent future attacks, and I commend this Bill to the House.

17:30

[Mr David Hanson (Delyn) (Lab)]

For the avoidance of any doubt, I should say that the Opposition support the aims and objectives of the Bill, are grateful for the Minister’s explanation and will not oppose the Bill this evening. Indeed, as the hon. Gentleman said, the Bill had a considerable genesis in the work of previous Governments on these matters. Its purpose is to continue the asset-freezing regime that the previous Labour Government put in place, and to put it on a more secure legislative platform. It is an aim that we support, and one that, but for the election, we would have progressed ourselves.

At the heart of the Bill is the ambition to maintain a strong, effective and proportionate system in order to tackle the continued threat of terrorism, which the Minister mentioned. The legislation has been sent to us from another place, where it has been carefully scrutinised, and some amendments have been made to ensure that the actions remain proportionate to the threat that we face.

As the Minister said, the Bill had its genesis not only in our international obligations, but in our own assessment of how we tackle the international terrorist threat. There have been a series of United Nations Security Council resolutions, demanding that states take action, including by asset freezing. In response to 9/11, the Security Council passed a further set of resolutions, requiring states to take greater steps to freeze the assets of those involved in terrorism. The Minister mentioned resolution 1267, which, in 1999, provided for the freezing of funds and other financial resources derived or generated from property owned or controlled by the Taliban; and resolution 1333 took that further by stating that states should freeze the funds of Osama bin Laden. In the aftermath of September 2001, the Security Council broadened its approach, requiring that action be taken against everyone who had committed or attempted to commit terrorist acts or facilitated their commission.

As the Minister said, the United Kingdom gave effect to those and other resolutions through Orders in Council under the United Nations Act 1946, and he also mentioned the decision on the challenge to those orders in the case of Ahmed and others v. HM Treasury. Indeed, it was the first ever hearing of the Supreme Court, which is just over the road. The Minister will know and the House should know that, on behalf of the Labour Government, the former Minister and Member for Portsmouth North, my then hon. Friend, Sarah McCarthy-Fry, brought forward fast-track primary legislation to restore the UK’s asset-freezing regime. We intended to go on and produce a piece of permanent legislation, of which the Bill before the House is a part, after consultation.

We know that, because the existing terrorist asset-freezing legislation that the then Labour Government introduced is only temporary, new legislation is required, and we welcome this attempt to put the measures on a more secure and durable footing today. That is not to say that we will not fulfil our constructive role as an Opposition and scrutinise the measures in Committee and on the Floor of the House. I hope that the Minister would expect nothing less. I am sure that he would have done the same—[Interruption.] He says that he is used to it. The Minister and I have had a number of constructive run-ins over the past few weeks on Bills, and we have a few more to come. On this Bill, I can assure him that there will not be the conflict that we have had in previous discussions, but I am sure that he would want us to test it in Committee.

Indeed, the Committee stage will give the Minister the opportunity to comment on this week’s report from the Joint Committee on Human Rights, which is on the Table of the House. The Joint Committee has looked at the Bill in detail and raised a number of issues, including the need for a higher standard of proof, the need for transparency on the use of closed material and the proposal that the reviewer should be appointed by Parliament rather than by Government.

I say to the Minister that those suggestions do not necessarily have the support of the Opposition; indeed, we may not have supported them in government. However, it is important that they are considered and that the Minister responds to them, so that there is clarity about the Government position and the Opposition position on this issue, and so that we do not just ignore the concerns that have been expressed but at least respond to them in due course.

[Dr Hywel Francis (Aberavon) (Lab)]

rose—

[Mr Hanson]

I am pleased to see that the Chairman of the Joint Committee is in the Chamber and I will certainly give way to him.

[Dr Francis]

I thank my right hon. Friend for giving way and for his warm words of support for our report. Can he elaborate on why he would not necessarily support our proposed amendments?

[Mr Hanson]

My hon. Friend has raised a number of issues in the report, and those need to be examined. However, regarding the three points that I have mentioned—including a higher standard of proof—it is my view that the key issue for the Government and the Opposition is to ensure that we take action to stem the flow of funds to terrorists. That means that there are potentially some issues whereby that lower standard of proof would achieve that objective and is still open, as the Minister himself said, to challenge and review. On closed material, very often information crosses Ministers’ desks—I was the Minister with responsibility for policing and terrorism in the previous Government—that they are aware of and act upon, but the disclosure of which could potentially compromise the security of the United Kingdom.

There is a debate to be had—I thank my hon. Friend the Member for Aberavon (Dr Francis) for raising this point—about who the reviewer of this legislation is accountable to. In the Joint Committee’s report, he suggests that the reviewer should be accountable to Parliament rather than Government. We currently have a reviewer of terrorist legislation that is independent of Government but accountable to the Home Office.

We need to have some clarity on those issues, and I think that they are worthy of debate. I am not closing the book on any of them, but I do not wish to come to final conclusions today based on the Joint Committee report, which was produced only over the weekend.

[Dr Huppert]

On the subject of the standard of proof, is the right hon. Gentleman saying that it is the Opposition’s policy that we should be applying measures to people where we think it is more likely that they were not involved with any terrorist activity than that they were? That is the implication of what he is saying.

[Mr Hanson]

The official Opposition’s view is the same as that underlying the Bill that is before the House. We have always held the view that there is a need to take action, as set out in the clauses in the Bill that indicate that, when there is information, the Minister can bring forward an order and designate the individual according to a standard of proof that may not be a conviction standard of proof but responds to a level of concern that leads the Minister to want to take action. We support that.

As I said to my hon. Friend the Member for Aberavon, we will look at the suggestions that were raised on Friday in the final draft of the Joint Committee’s report. However, there are proposals in the report that I suspect I would not have supported as a Minister and that I will therefore not necessarily support as an Opposition spokesman. Nevertheless, we will give them due consideration; indeed, I may even table amendments that reflect the Joint Committee’s deliberations while ultimately allowing the Minister the opportunity to respond to them, so that there is a debate. I may not even necessarily force those amendments to a vote.

[Keith Vaz]

Although I obviously accept the thrust of what my right hon. Friend says, there seems to be something of a love-in going on between the two Front Benchers on this issue, and it always worries me when Front Benchers are in agreement over everything.

I am concerned about those who have had their assets frozen and who have now had their orders revoked; there are 13 people in that situation, according to the written ministerial statement. What do we say to them? They have had their bank accounts frozen and, in a sense, someone has believed that they have in some way been linked to terrorism; there is a reasonable suspicion of that. It will be pretty difficult for them now, will it not?

[Mr Hanson]

First, may I assure my right hon. Friend that there is no love-in between the Minister and myself? We have been jackets-off for the past week and a half in a Committee dealing with another Bill, and I suspect that we will be jackets-off next Monday dealing with the same Bill. However, where there is agreement on this issue, we will maintain that agreement, and I think that the Minister and I agree that the powers before us are proportionate. In the cases that my right hon. Friend mentioned, people will have an opportunity under the Bill to appeal, and there will be independent oversight. Those are important safeguards.

Ultimately, the most important liberty of all must be people’s right to live in a society free from the fear of terrorist attack and from incidents such as those that we have seen not far from the House of Commons in our capital city of London in recent years. We need to ensure that we take action, but that it is proportionate in cracking down on those who look to perpetrate acts of terrorism.

Having said that, I did not intervene on the Minister and I would still welcome some clarification. It is particularly important to know how the role of the independent reviewer of asset freezing will be constituted, and such clarification might, indeed, help my right hon. Friend. I would like to hear from the Minister about certain issues at some point—I give him due notice that these are issues for Committee. How will the independent reviewer be appointed? Will he or she be the same person as reviews terrorism legislation? Currently, that is Lord Carlile, but the appointment of David Anderson QC, was recently announced. Will this be a completely different role or a parallel role? What will the budget for the office be and how will the office work?

We need to look separately at some of the considerable powers that the Bill gives the Treasury; for example, in clause 31, which deals with appointing the reviewer, and in clause 3, on the notification of final designation. Clause 3(3)(iii) gives the Treasury powers to do things that are

“in the interests of justice”,

but that term can be defined quite widely. I will therefore be testing the Minister in Committee, not out of broad opposition to the proposals, but so that he can clarify these issues. Those who ultimately read the proposals that we make in Committee and on Second Reading will then understand the powers that we are giving the Treasury and, in particular, how the Treasury will disclose matters and use those powers. I give the Minister notice that although we are giving him a free ride today, we will still look in Committee at how powers such as those in clause 3 are intended to be used, what

“in the interests of justice”

means, what we define as being

“in the interests of national security”

and what

“for reasons connected with the prevention or detection of serious crime”

actually means. Although we support the Bill, we will continue to look at such issues.

The Minister gave us a powerful reminder of the types of terrorist attacks and actions that individuals and groups have undertaken, and will continue to undertake, as they attack not only our way of life, but innocent individuals across the United Kingdom and, indeed, abroad. The recent discovery of an explosive device on a courier aircraft that had landed at East Midlands airport en route from Cologne to Chicago powerfully brings home to us again the fact that that terrorist threat remains in the United Kingdom.

The Bill will impose severe financial restrictions on those whom Treasury officials “reasonably believe” have

“been involved in terrorist activity”.

I support that test, which will give us the opportunity to use asset freezing as a tool across the international community to prevent the financing of terrorism. We know how devastating and indiscriminate terrorist attacks on our shores and abroad can be.

It will be of interest to the House to know that the attack in London in 2005 cost less than £10,000 to carry out. As of July, as the Minister said, about £150,000 remained frozen in the UK under the regime. If freezing assets intended for terrorist purposes can prevent attacks and potentially save lives, and if blocking the flow of money and working alongside our international partners can disrupt international terrorist networks, we should, quite frankly, do those things. We should do them while cognisant of the human rights implications that my hon. Friend the Member for Aberavon and his Committee have raised, but do them we should.

Any measures that we take forward in the House must delicately weigh up national security and civil liberty implications. We will discuss that in Committee, but I will look at the debate in the other place and the changes made there. I recognise that those are important, but ultimately our purpose is to protect citizens in the country whom terrorists would attack.

Interestingly, in another place, Members raised concerns about how the Bill will fit into the wider counter-terrorism review, which raises further concerns that we will need to explore both this evening, including when the Minister responds, and in Committee. I confess again that I have concerns about the coalition’s position on the counter-terrorism strategy generally. Having been a terrorism Minister in the last Government, I know that things such as section 44, control orders and CCTV usage are important and help to prevent terrorist attacks. That is a debate for another day, but I note the concerns that the Bill might be subsumed by some of the outcomes of the review. I would therefore like to know either in Committee, or even this evening, whether this is stand-alone legislation or whether it will be further amended in light of any review coming out of the counter-terrorism strategy as a whole. I do not wish to waste the time of the House or the Committee discussing issues only to find that the noble Lord Macdonald throws up concerns that have to be incorporated in another Bill dealing not just with this issue but with those to which we might return, such as section 44 and control orders.

The Commercial Secretary to the Treasury said in another place that

“where the review’s conclusions are relevant to asset freezing, and should those conclusions alter the balance in favour of introducing additional safeguards, we will take them into account and bring forward any amendments that may be appropriate to the Bill.”—[Official Report, House of Lords, 27 July 2010; Vol. 720, c. 1252-1253.]

Presumably that also means that if Lord Macdonald says that they are disproportionate, proposals might be introduced watering down the Bill’s provisions. The Minister needs to reflect on that and indicate clearly in his winding-up speech whether the Bill is separate from, or part of, the review.

It would also be useful to know the time scale of the ongoing general review. Under tonight’s programme order, we will complete the Committee stage of the Bill in short order—by 25 November—and will be returning on Report shortly after that. If Lord Macdonald’s report has not been completed by then, will we go immediately to Royal Assent? I need some indication from the Minister of the time scales in order to know the product and concerns we are dealing with.

I want to raise another matter—I hope that I am being supportive—that Ministers need to reflect on. Again, it is something we will return to in Committee. There is a grey area between terrorist financing and some aspects of organised crime. I noticed that my hon. Friend the Member for—

[David Simpson (Upper Bann) (DUP)]

Upper Bann.

[Mr Hanson]

I worked in Northern Ireland for two years, but my mind went completely blank then. My hon. Friend the Member for Upper Bann (David Simpson) will know that there is a great deal of linkage in Northern Ireland particularly between organised crime and terrorist financing. We need to be clear about the Bill’s purpose in relation to that activity. There might be areas where financial activity under organised crime, while being an organised crime issue, ultimately goes towards financing terrorism. Particularly in the Northern Ireland context, it is worth while our examining that area and whether there will be any consideration downstream of reviewing and harmonising asset freezing in those areas as a whole. I think of the case of Mr and Mrs Chandler today, where allegedly money might have been passed to those who kidnapped them. I do not know whether that is true, but it relates to potentially criminal, terrorist or other activity where these powers could be used. Clarity there will be important in our Committee discussions, so that we are aware of those things in due course.

My only potential criticism of the Minister over this proposal is that it might lead to a state of limbo in the asset-freezing provisions after the counter-terrorism review. It would be helpful if the Minister clarified those issues when winding up today, and in Committee.

In general, as I have said, terrorism is a still a real threat in this country, and although people have a statutory and historic right to civil liberties and freedoms, they also have a right to go about their daily lives without fear of serious threat to their safety. The key test for the Government is to balance those liberties with the actions that we must take to ensure that we secure those liberties for the future.

The Opposition support the Government’s attempts to maintain an effective, proportionate and fair terrorist asset-freezing regime that meets our United Nations obligations, protects national security by disrupting the flow of terrorists’ finance, and safeguards human rights. We believe that the Bill is necessary to help to combat the terrorist threat in this country, and we look forward to scrutinising it. I have indicated to the Minister the sort of areas that will need discussion during its passage through the House, but in broad terms, we wish it well and we will support it this evening.

17:50

[Matthew Hancock (West Suffolk) (Con)]

I think that hon. Members on both sides of the House recognise the importance of the Bill, of implementing it and of a legislative structure for freezing terrorist assets. The ministerial statement says that 205 people currently have assets frozen up to a value of £290,000. Most importantly, the measure is part of a global system of freezing assets, which is crucial in this interconnected world.

I do not believe that I need to declare an interest, but I have a history in this area because I worked in the Bank of England on the freezing of assets under the jurisdiction of EC and UN orders. It is surprising that we are talking about this in November 2010, because it has been clear for a while that we need substantive legislation on the statute book to provide a framework for the freezing of terrorist assets. I am glad to be speaking in this debate, but it is a shame that that has not already happened.

I am glad that the Bill has all-party support, but I was surprised by the comment that it is being rushed through. There has been widespread consultation and the Bill has been through the full process in the other place, which included a day of debate on the Floor of the House. It is now going through the full process in this place. The suggestion that it is being rushed through is odd. What is more, it was clear earlier this year, during the previous Session, that there would be a Bill to put asset freezing on a permanent basis. The shadow Minister said that if the Labour party had won the general election, it would have introduced such a Bill.

The system that is now in place is based on UN resolutions 1267 in 1998, 1333, which specifically targeted Osama bin Laden, and 1373, which went through very quickly after the 9/11attacks. As those resolutions were being passed, it was clear that the structure of terrorist asset freezing was becoming more comprehensive, and more important to our national armoury against terrorism. That was supported by terrorism orders in 2001, 2006 and 2009, so the process has been ongoing for many years. In 2002, New Zealand put on its statute book permanent legislation covering a formal structure, which was based on modern statutes for dealing with terrorist financing. Australia has introduced similar legislation.

Over the past decade, we have had many opportunities in terrorism and crime Acts to put such legislation on the statute book. The Ahmed case was started in 2008 on the back of 2006 terrorism orders. It is surprising that anyone can say that the Bill is being rushed through. What is more, for the Opposition to say that it is too soon to put it on the statute book because we need first to know the conclusions of the Home Office’s broader review does not take into account the importance of doing so by the end of December, when the temporary measures will lapse, and we will be back in the same position as when the Supreme Court struck down the previous legislation. It is at least timely, and perhaps too late to be standing here discussing the matter.

A broader question arises about the Supreme Court’s action. It concluded that the United Nations Act 1946 did not intend to support actions on terrorist financing, such as were then carried out under UN and EC structures. We all recognise that it was appropriate for the Supreme Court to give the then Government the ability to put through temporary legislation to ensure that assets were not unfrozen. It is important to note that because of the widespread public policy need for such freezing the Supreme Court recognised the importance of continuing to freeze assets, even while the formal legislative structure was being put in place.

My final question concerns the standard of proof. I am particularly interested in the extent of cross-party support for changes to the standard of proof. I have previously argued that the balance between civil liberties and protection against terrorism in this country has swung too far in favour of autocracy and away from civil liberties. I am pleased to see the new threshold of over 30 days of reasonable belief, rather than reasonable suspicion. I am also pleased that an appeal process is being put in place. However, I was surprised to hear the shadow Minister say that that may not have the support of the Opposition and that they need clarification of the position. The Home Office’s review will look into a much wider array of issues, including control orders, CCTV, border controls and indeed terrorist assets, and I hope that it will ensure that we can go forward and that the freezing of assets will continue to receive cross-party support.

[Mr Hanson]

For the sake of clarification, my right hon. Friend the Member for Morley and Outwood (Ed Balls) will look closely at those issues. As a Government, we obviously had in place the section 44 regime on control orders and CCTV, and we were introducing legislation. We will examine all those matters, but the balance between civil liberties and the protection of individuals, and securing action against terrorists must be right. That is the balance that I hope the review will seek.

[Matthew Hancock]

I am sure that the review will seek that balance. My question is whether the Opposition will have a position when the review comes out. I am glad that the Opposition believe that the measures are proportionate, and that at this stage there is cross-party agreement.

That brings me to my conclusion that far from being rushed through, the Bill is timely, and far from its being introduced too soon, given that a review is under way, it is important that it is enacted within the timetable, no matter the Macdonald review’s timetable. No doubt it will suggest amendments to many pieces of legislation from the previous decade that have been too autocratic and have not sufficiently respected civil liberties, but we must ensure that any amendments are part of that much bigger picture, rather than criticising the timing of this important legislation, which I would argue is about 10 years too late.

17:59

[Keith Vaz (Leicester East) (Lab)]

It is a pleasure to follow the hon. Member for West Suffolk (Matthew Hancock), who is obviously knowledgeable about the internal workings of these issues. He is also right that we need to look at the big picture more than at the immediacy of some of the things we are doing. One problem in the past was that we did not think carefully enough about counter-terrorism legislation until some great event occurred. Then there was a great hoo-hah—quite rightly—and Members in all parts of the House became concerned and wanted to pass legislation. He is right that the Bill is not being introduced with that immediacy, which means that we have an opportunity to look carefully at what is being proposed.

I have always welcomed the unity of the Front Benches on terrorism issues, although in my 23 years in this House I have found that, with one or two exceptions, whenever the word “terrorism” appears in any order or other legislation, there tends to be cross-party support. The exception was when the previous Government rather hastily marched some of us through the Division Lobby in support of 90 days’ detention. On reflection, we realised that that was not the right thing to do.

[Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC)]

The right hon. Gentleman will recall the unanimity of view on the Dangerous Dogs Act, but it was not very good law.

[Keith Vaz]

I think that was 1874, which was before even I entered the House, but I understand what the hon. Gentleman is saying.

[Mr Llwyd]

No, I meant the Dangerous Dogs Act 19—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. Shall I vacate my seat while you two have a chat? Please can we have no sedentary interventions?

[Keith Vaz]

I give way to the leader of the Welsh nationalists.

[Mr Llwyd]

I was referring to the latest Dangerous Dogs Act, which was passed in 1991. The right hon. Gentleman will recall that there was unanimity across the House on that legislation, but it was thoroughly bad law.

[Keith Vaz]

The point that the leader of the Welsh nationalists makes is absolutely right. Even though there is unanimity of purpose, it is important that we look carefully at the legislation and scrutinise it, for the reasons that all those who have spoken so far have set out. My right hon. Friend the Member for Delyn (Mr Hanson) is no longer in his place, and I am not sure where he has disappeared to. However, notwithstanding the support from the Opposition Front Bench, I am sure that when he gets to Committee and takes off his jacket—as the Minister will do too, in these dramatic confrontations that occur in the Committee corridor—they will be able to discuss the finer detail of the Bill.

We have not had a substantive debate about counter-terrorism on the Floor of the House of Commons since the new Government were formed. It is certainly the intention of the Select Committee on Home Affairs to look at counter-terrorism when Lord Macdonald has finished his review and when Charles Farr, who is conducting the review in the Home Office, completes his consideration of the Home Office issues. I see in the Chamber the hon. Member for Cambridge (Dr Huppert), in whose constituency I spent most of the morning. He and the House will know that those issues have to be discussed in great detail. We need to look at control orders, and see whether the legislation passed so far has been adequate to deal with, first, the terrorist threat and, secondly, the civil liberties implications, of which the hon. Member for West Suffolk rightly made mention. That is why what the leader of the Welsh nationalists said is so important. We hope that the Home Affairs Committee can look carefully at those issues, and therefore give a considered view to Parliament when Parliament chooses to discuss the matter.

The figures in the Minister’s written statement, which was helpfully released this morning, I think, applied to the amount in accounts that have been frozen—£290,000— and to the number of people who have had orders revoked. I do not know whether it is just me, but I was surprised at the small figure, given that the City of London and this country in general must have trillions of pounds in bank accounts. Bearing in mind the fact that international terrorism is a global crime—taking into account the concern that we have about our tough legislation on people seeking to come into this country and depositing money here to be used to finance terrorism—I thought that the figure given was, frankly, a bit on the low side. When the Minister—or perhaps his junior Minister—winds up, perhaps he will say whether he agrees, because £290,000 does not sound like an enormous amount to be funding international terrorist activities.

Similarly, on the 205 accounts, it is not clear whether we are talking about 205 people with 205 different accounts, or a smaller number of people with 205 accounts between them. Although we do not want to know who they are—it would be inappropriate, as we know, to discuss individual cases on the Floor of the House—it would certainly help the House to have as much information as possible. Are we talking about fewer people with many accounts, or are we talking about 205 people?

The second issue to do with the figures concerns the number of people who have had their orders revoked. I have not had the pleasure of reading the Joint Committee on Human Rights’ report into the issue, but I hope to do so as soon as possible. I do not know whether the report looked at the revocation of orders, but I am concerned about those who have had their assets seized, because somebody had reasonable suspicion that they were involved in, or were funding, some kind of terrorist activity, but who have had their cases reviewed and, as a result, had the orders revoked. What happens to those people? Do they get compensation if they had to pay their bills and continued to have living expenses, despite having their accounts suddenly frozen? Do we explain why their accounts were frozen? I am not sure, so I would be most grateful if the Minister told the House what procedure is adopted once an order has been revoked.

I welcome the fact that orders have been revoked: it shows that the system works. If no orders had been revoked, I would have been extremely worried, because people can have reasonable suspicions, but when they look at a particular case, they may come to another view. I welcome the new appeal process in the Bill—there should always be an appeal process in such circumstances—which will presumably mean that more people might challenge the system. It would be helpful to know what kind of information they would have during that process.

Those may seem to be points of detail, but they are terrifically important to anyone who is caught innocently in the system. Indeed, I would also be keen to know whether there had been any complaints by individuals about the way the system operates currently. If there have been legitimate complaints, do the Government propose to ensure that the legislation covers those complaints in some way or another? People might be pretty delighted that their accounts were suddenly frozen, but then suddenly released. However, I would imagine that if any of us in the Chamber did not have access to our bank accounts, for whatever reason, we would be pretty upset. Therefore, it is important to know whether any complaints under the current system have been addressed.

My final point concerns the Macdonald-Farr review. I know that it is not a matter for this Minister, but he will no doubt talk to the lead Minister on counter-terrorism—that is, the Home Secretary—or other Ministers. It is important that we have a timetable for concluding the review that the Government have set up. I recently wrote to the Home Secretary asking for that timetable. It is important that we know precisely at which point the internal review being conducted by Charles Farr is drawn up and when the views of Lord Macdonald come into any consideration. Do they prevail over what has happened? Those are not issues for this Minister; they are issues for the Home Office. However, in the overarching discussions that are no doubt taking place in Government, they are issues to be considered by all.

The leader of Plaid Cymru reminded us—certainly me—that Parliament legislates in haste and repents at leisure. The hon. Member for West Suffolk said that the Bill was not being rushed through, which we welcome, but a timetable in which the legislation has to return to us in seven days is quite fast. I am not sure how many sittings the Minister intends for scrutiny. It is sometimes considered that those who speak on Second Reading wish to sit in Committee, so I would like to make it clear to any Whips who might be present that I have no desire to sit in the Public Bill Committee. If we are to scrutinise the legislation carefully, however, and if it is going to be with us for some time, we should take into account the concerns of the Plaid Cymru leader and ensure that we scrutinise this Bill very carefully indeed.

18:10

[Dr Julian Huppert (Cambridge) (LD)]

It is a great pleasure to follow the right hon. Member for Leicester East (Keith Vaz), who chairs the Home Affairs Committee, on which I also have the privilege to serve. He did indeed visit my constituency of Cambridge this morning and he will doubtless have understood something of the expertise of some of my residents and constituents. He did not on this occasion meet David Howarth—he will be known to most hon. Members as a great constituency MP and an expert on these issues—who worked hard on this legislation and I pay tribute to him for what he did.

The aim of the new revised Bill is clear, and I suspect that no Member would have any problem with it. We need to control terrorism and we need to control the flow of funds for terrorism. We support, of course, UN Security Council resolutions, particularly resolution 1373, although others are also relevant. We all share those aims, so the question is how best to go about achieving them.

Earlier this year, the order was held to be ultra vires in respect of the United Nations Act 1946. Lord Phillips used strong phraseology when he said:

“The draconian nature of the regime imposed under these asset-freezing Orders can hardly be overstated.”

I suggest to right hon. and hon. Members that what he meant was not that these were draconian because they were orders, but that they were draconian because of their content. So we need to be careful before reintroducing measures that are very similar to those orders.

There was a Terrorist Asset-Freezing (Temporary Provisions) Act 2010. I shall not enter into the argument over whether this particular Bill is being rushed through, but the temporary one clearly was in an effort to catch up with what happens when Government do not take account of legal processes. This Bill is better than the previous temporary one. I have no hesitation whatever in saying that. I am grateful that a number of amendments were accepted in the other place, which have significantly improved the Bill.

I nevertheless have a number of concerns about the Bill, and these are echoed by organisations that are familiar to us all: Liberty, Justice, the Equality and Human Rights Commission and the Joint Committee on Human Rights, on which I also have the pleasure to serve. I urge Members to look at our short and simple report, which makes a number of clear suggestions and proposes amendments, which I, if nobody else, will table. The key issue is that we must not treat those people whose assets we freeze as effectively “prisoners of the state”, as Lord Hope of Craighead said. That is not the correct intention; we should be careful about that.

I do not wish to detain the House for long, but I shall speak briefly about the amendments that I wish to table. I hope that the Minister will be able to respond to many of the issues tonight, which will save time later on in the proceedings. Before I do so, I want to point out a few areas that I believe are missing from the Bill, which is a shame. I would not go so far as to mention the whole counter-terror review, but the Bill does not deal with the parallel asset-freezing powers in the Anti-terrorism, Crime and Security Act 2001 or the terrorist financing provisions of the Terrorism Act 2000—despite the fact that the Privy Council recommended in 2003 that these be rationalised. Surely it makes sense to bring legislation together and make it clearer.

I am also concerned that the Bill fails to deal with those designated by the European Union. Under this legislation, such people have no right to appeal or review a decision to put them on the list. I find that disappointing. I am sure that some hon. Members, particularly Conservative Members, would naturally be wary of any instruction from the EU. In this case, although not in many others, I agree with them. We should find a way to safeguard British citizens from this process and provide them with some form of appeal or review. I believe that amending provisions could be added to clauses 26 and 27.

There is a fundamental issue at the heart of the matter, which I do not believe has been properly discussed—at least not in this House. It comes down to who should decide whose assets should be frozen. Should it be the Government or the Treasury, as in the Bill; or should it be a court? Do we want punishments—that is what these provisions amount to—to be dealt with by Government or by the judiciary? The appeals process is, I acknowledge, a significant improvement on what obtained before.

[Matthew Hancock]

I am trying to follow the hon. Member’s argument, but does not the concept of a judicial implementation of asset-freezing contradict the fact that this is a global system? Whether it is done through the EU or the UN, the designation is done at that global level and then executed in the UK. The decision is not made in the UK, so while the right of appeal is important, it is crucial that the Executive can freeze assets rapidly in response to a global proposition.

[Dr Huppert]

I am afraid that the hon. Gentleman is not correct about that. There are cases where the Treasury designates and it is that act of designation that counts. The provisions could be changed simply—I will propose the wording later—so that the Treasury requests the courts to designate; there would be nothing amiss in so doing.

The present situation is that there is a freeze and then there is an appeal. One problem with that cycle—not to mention the problem of where the power lies—is that the onus is on the affected person to find a way to make an appeal. They will have to get legal advice first and get clearance to secure the funds in order to pay for such advice. I hope that we will have absolute clarity from the Minister on whether they will always be able to get access to the funds necessary to clear their name. They will then have to apply and have their case heard. As I will explain in more detail later, they may not even know the case against them.

That highlights the real questions over who should make these judgments. I think it should be a court that determines the freeze and that it should be done ex parte. I absolutely accept that the courts should be able to go through the process without warning the accused in advance, because if they can simply move the money or assets somewhere else, it will not work, but the courts need to be involved and the people accused must be given a chance to make their case fairly.

I would also like to deal with the issue of standards of proof. I have put the issue to both Front-Bench teams and I have asked a number of colleagues—legal and otherwise—what the standard of proof should be before we take an action like freezing someone’s assets. Should it be the criminal standard of proof or should it be the civil standard? I have been fascinated by the number of people who think that they are somewhat illiberal in believing that it should be a bit below the criminal level. I have heard that from a number of colleagues.

Should things be done separately? Should we require people to have been convicted, tried or just arrested before we apply the provisions? When I asked him earlier, the Minister referred to the problem of arresting non-UK people, and I accept his point, which was well made. I nevertheless seek an assurance that the people involved will at least have been through a process of arrest—for people in the UK, where that is appropriate—and that at least consideration will have been given to taking the person through the full legal processes of trial and conviction. Security Council resolution 1373, with which we are trying to comply, requires us to deal with those who

“commit or attempt to commit terrorist acts”.

It does not say anything about those we “suspect” of committing such acts, so the Bill goes beyond what is required by the Security Council.

I understand the argument for having a slightly lower standard for the interim powers, although I would ask why it was decided to go for 30 days and whether “reasonably suspect” is the appropriate provision. I am very concerned, however, about the idea of “reasonable belief” for a final designation. That means treating people below the civil standard, which is essentially a 50:50. We are saying that it is just as likely to be one way as the other. That is the civil test. The Government are seeking to freeze people’s assets in circumstances where they believe that it is more likely than not that those people were not involved in terrorist activities. I find that alarming. If we think people were probably not involved, we should not freeze their assets. In the Government’s defence, I have to say that the Opposition seem to think that the degree of involvement in terrorist activities could be even less before these provisions are applied, which I find significantly worse.

These are draconian powers and we should be sure, to a reasonably high standard of proof—I could even accept a balance of probabilities—that the people are likely to have been involved with terrorist offences. I am also concerned about what is meant by a “terrorist offence”. Many concerns have arisen over a number of years where actions have been described inappropriately as terrorist offences. I am sure that Members are aware of the figures relating to section 44 of the Terrorism Act 2009. According to the latest figure that I have seen, 101,248 people were stopped and searched and none was arrested for terrorism-related offences. Does that constitute involvement in terrorism? How do we define the term?

[Keith Vaz]

Does the hon. Gentleman share my concern about the amount of money that has been seized—about £290,000, although the figure varies according to the fluctuations of currencies? According to a note attached to the Minister’s speech, the amount could actually be less than £290,000, as it depends on the value of the pound. That is approximately the cost of a one-bedroom flat in Westminster North.

[Dr Huppert]

I am not entirely sure how that is relevant to what I was saying, but I do indeed find it astonishing. I suspect that the public, if they thought about the matter, would imagine very large sums, although that might be a result of their having watched too many James Bond films. I certainly find it surprising that we are concerned with the net sum of roughly a quarter of a million pounds.

[Matthew Hancock]

I understand the figure of just under £290,000 to be the amount that is currently frozen, rather than the amount that has been frozen over time. Past figures have been much higher.

[Dr Huppert]

Indeed, but I still consider it to be a relatively small amount. It is certainly a smaller amount than I would have expected if I had not seen any of the data.

Let me return to the question of what constitutes a terrorist offence. We know of specific instances of arrests using anti-terrorism powers that have been deeply inappropriate. I am sure that Members will recall the case of Walter Wolfgang, who was ejected from a Labour party conference and arrested—under anti-terror legislation—when he tried to return. I do not think that we should pass Bills allowing us to deal in such a way with people like that—or indeed Iceland, which was also subject to anti-terror rules, or the BBC photographer Jeff Overs, who was stopped while taking photographs of St Paul’s Cathedral in November 2009 and arrested under the same rules. Surely that is not what the Bill ought to be about.

I should welcome a stricter definition of terror offences from the Minister. As ever, we are seeing an expansion of the present definition. Another recent example, which is highly topical at present, is that of a gentleman called Paul Chambers, who was recently convicted of sending a menacing tweet that threatened a terrorist activity. It read:

“Crap! Robin Hood airport is closed. You've got a week and a bit to get your shit together otherwise I'm blowing the airport sky high!”

I should add at this point, for reasons of which some Members may be aware, that I am Spartacus.

The tweet led to a conviction under section 127 of the Communications Act 2003 for

“Improper use of public electronic communications network”.

Surely that is not appropriate. The tweet did not actually threaten terrorist activity. It led to legal fees of £3,000 and the loss of the gentleman’s job, which is utterly ridiculous. We need to be careful about allowing these powers to expand and take in more cases. I need hardly remind Members that Jean Charles de Menezes was also “reasonably believed” to have been involved in terrorist activity.

We must also be clear about the reasons for which someone’s assets are being frozen. I fear that the Bill currently allows far too little information to be given to individuals to enable them to defend themselves. I would propose an amendment suggesting that as much information as possible must be given to the relevant person. We must bear in mind the possible public interest in non-disclosure, but, except when it simply is not possible, the balance should be in favour of openness, so that people can genuinely defend themselves.

Similarly, we should require a fair trial and a fair hearing. I would propose an amendment making it clear that the accused must have enough information to be able to instruct the defence. That is an essential part of a fair trial. The report from the Joint Committee on Human Rights contains a detailed case analysis, drawing a comparison with control orders. Many of us are concerned about the impact of excessive powers when victims have had no opportunity to defend themselves properly, and advocates in closed courts do not enable them to know what is going on.

The Government rely on a very thin distinction to avoid some of the legal hearings that have resulted from control orders. They argue that judges have commented that control orders do not apply to terrorist asset-freezing. I do not buy such arguments. I urge the Government to adjust the Bill now so that it works, rather than doing what the last Government did so often: waiting until an expensive court case arose, then being forced yet again to amend legislation in an ongoing cycle.

The role of Parliament is important. I am pleased that reports are to be made, but I believe that they should be made to Parliament rather than to Government. We have a responsibility to the people to verify that the powers are being used. The independent reviewer should be confirmed by Parliament, and should report to Parliament. It should not be up to the Treasury to vet reports before passing them to us; that should be our responsibility.

As I said to the Minister earlier, I am concerned about the licences that are dealt with in clause 17. It should be made absolutely clear that the Government will ensure that there are sufficient funds for reasonable living. As far as I can see, no such requirement currently exists. According to Lord Wallace of Tankerness, there is a “general presumption” that more is needed.

I am also concerned about the level of information that is required by clause 20. It may be very onerous to provide that level of information if the Treasury chooses to make it so. In the case of Ahmed, the Supreme Court noted the extraordinary burden that the requirement could place on a designated person. For example, the wife of one of the designated persons was

“required to report to the Treasury on every item of expenditure, however small, including expenditure by her children”.

Is that really what we want, and what we expect from the Bill? Designated persons will have limited funds anyway. Do we actually want the Treasury to go through itemised lists of toiletries, sweets, school books and bus tickets? The Bill should make clear provision for no account to be taken of very small amounts.

Clause 22 raises the issue of self-incrimination. Article 6 of the European convention on human rights includes a privilege against it, but the Bill does not. According to the Government in the other place,

“the right against self-incrimination would form a reasonable excuse”—[Official Report, House of Lords, 6 October 2010; Vol. 721, c. 197.]

It would form a reasonable excuse, that is, to refuse to comply with a request for such information in clause 22. I think that that should be made clear in the Bill. The onus should not be on the accused to make the case after being prosecuted for providing the information.

Another fascinating part of the Bill which I hope can be changed is clause 25(1), which states:

“Nothing done under this Chapter is to be treated as a breach of any restriction imposed by statute or otherwise.”

There are a couple of exceptions, but I find that very concerning. It appears that the Bill is exempt from all rules that might apply to it except the two that are listed in the clause. That might catch, for example, the Human Rights Act. I see nothing in the Bill suggesting that the Act applies to it. Indeed—although I am sure that it would be tested in court—it could be argued that the clause expressly states that the Bill is exempt from the Act’s provisions. I hope that that is not what the Government intend. Similarly, what about common law torts? What about negligence? What about defamation? Nothing in the Bill secures any of those aspects of common law. I hope that the Government will replace section 25(1) with a provision that actually states what they probably intended. At present, it is dangerously unclear.

Asset-freezing is a very strong power, but a very necessary one. Because it is so strong and because it can be so draconian, it must be fair and properly controlled, and it must be applied only to those who are actually involved with terrorist activities.

18:28

[Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC)]

I believe that we need a system of asset freezing. It would be idiotic for anyone to argue that that is not necessary in this day and age, given the link between organised crime and terrorism. It occurs not just in Northern Ireland but, I am sure, throughout the United Kingdom. I take it as read that every Member in the Chamber believes in the principle of asset freezing. The next issue that arises is how we arrive at that position and ensure that it is compatible with people’s civil rights. That is important. I am not a bleeding-heart leftie as such, but I do believe that we have basic human rights and that we need to observe them. Indeed, we are obliged to do so by international law, and by domestic law too now.

I referred in my discussion with the right hon. Member for Leicester East (Keith Vaz) to the apparent unanimity between the two Front-Bench teams, and I mentioned the Dangerous Dogs Act 1991. It was introduced following some terrible incidents involving Staffordshire bull terriers maiming people and, in one instance, killing a child. The rush to legislate was understandable, but the measures were not properly scrutinised and, to this day, the Act is unworkable.

Another such Act has passed through the House during my tenure and that of the right hon. Gentleman, namely the gun control legislation following the Dunblane massacre. Everybody was appalled by that massacre, but we rushed to legislate without adequately scrutinising the measures we were putting in place, and I am afraid that the resulting Act did nothing to control the use of illegal firearms. My point is that scrutiny is vital, and that unanimity of purpose between both the Front-Bench teams, and, indeed, all Members, does not matter, because at the end of the day every one of us has a duty to ensure that our constituents live in a safe environment and that we can deal with the terrorism that might threaten them.

There is clearly a terrorist threat; only a fool would deny that. Having said that however, let us examine the Bill. The Financial Secretary to the Treasury referred in his opening speech to United Nations Security Council resolution 1373. It includes a requirement that UN member states must prevent the financing of acts of terrorism, including by the freezing of funds and economic resources

“of persons who commit, or attempt to commit, terrorist acts or participate in or facilitate the commission of terrorist acts”,

and that they must prohibit

“their nationals or any persons and entities within their territories from making any funds, financial assets or economic resources”

available to such persons. I submit that there is a world of difference between that requirement and what is being proposed in the Bill.

Initially, the Bill stated that its powers could be used if there was a suspicion that a person might be involved in some form of terrorism. That has now been strengthened somewhat: there must now be a reasonable belief that they are involved. That is quite different from what the UN is calling for, however, and in my view it does not strike the appropriate balance between protecting national security and preserving civil liberties. It is vital that we do that, and this is precisely why so many pieces of anti-terrorism legislation have been struck down by the courts. That has happened not because there is all-out war between the courts and Parliament, but quite simply because we have not been getting that essential balance right.

I believe that if we subject the Bill to proper scrutiny, we can work towards ensuring that we get the balance right. I do not want us to have to argue the same points again in a few months, after the Supreme Court has knocked some of the Bill’s measures on the head a second or a third time because of a perceived lack of respect for human rights.

As the hon. Member for Cambridge (Dr Huppert) mentioned, this Bill gives powers to the Executive, not the judiciary, and those powers are potentially harsh and punitive. As has been said, it is a form of punishment for someone to have all their assets frozen—one might argue that it is almost as bad as dealing with the Independent Parliamentary Standards Authority, but perhaps we should not go there, folks. There is a right of appeal, which is welcome, but these measures deal with persons about whom it has not been established that they have ever been involved in terrorism, but when there is just a reasonable belief that they could be, or might at some stage have been, involved in some act of terrorism.

I have concerns about the Bill, therefore, and I know that Justice and Liberty also have grave concerns. Let me repeat that I want a proper framework set up. I am not arguing an empty case—I am not saying that I oppose just for the sake of opposing. I want the legislation to be workable and to be seen to be acceptable, and for it to be tested by the courts and to be found acceptable to them. If we ensure that that is the case, we will have done our duty as parliamentarians in that we will have introduced good law.

Allowing the Executive to designate individuals as suspected terrorists is unacceptable. As the deputy president of the Supreme Court has said, these people are

“effectively prisoners of the state.”

Those are strong words from a Supreme Court judge, and I do not think he would have said them unless he felt strongly about the issue.

The Bill goes much further than is required by UN Security Council resolution 1373, a resolution that the UN’s own special rapporteur on terrorism, counter-terrorism and human rights has said

“cannot be seen as a proper response to a specific threat to international peace and security”.

I also believe the Bill fails to address the UK’s asset-freezing obligations under UN Security Council resolution 1267, recently criticised by the General Court of the European Union as “particularly draconian”.

[Sajid Javid (Bromsgrove) (Con)]

The hon. Gentleman is making some fine points, but does he accept that global co-operation is required to combat global terrorism and the financing it utilises, and that that is the intent behind the UN’s actions on this, following the terrible events of 11 September 2001? Does he also agree that for that reason global organisations, such as the committee the UN has set up, must issue orders internationally to all countries to freeze assets? The UK is absolutely key in implementing such orders given the role we play in international finance, and bringing courts into this would make any orders terribly difficult to implement.

[Mr Llwyd]

I do not disagree with that. We are a member of the UN, and we need to co-operate, and I do not disagree with the need for a framework. All that is understandable, but what I am saying is that we want a fair framework, and one that will stand the test of time and not be struck down because of some perceived illegality. That is all I am saying. I am probably ad idem with the hon. Gentleman on the whole issue. I appreciate that this is a global problem. That is why it is, quite rightly, being tackled by the UN, but my point is that we need to be careful about how we introduce any measures.

Lord Phillips, president of the Supreme Court, has said that the basic rights to which I am referring are a “vital part” of the fight against terrorism. He said:

“The so called ‘war against terrorism’ is not so much a military as an ideological battle. Respect for human rights is a key weapon in that ideological battle. Since the Second World War we in Britain have welcomed to the United Kingdom millions of immigrants from all corners of the globe…The Human Rights Act is not merely their safeguard. It is a vital part of the foundation of our fight against terrorism.”

As I have said in respect of resolution 1373, we are going further than required, and by imposing the freezing of assets we could be in breach of article 1 of the first protocol to the European convention on human rights. We must also consider the right to respect for family and private life under article 8, and the right of access to a court under article 6. People who will be subject to these freezing orders will not necessarily know the case against them, which is a clear breach of article 6.

The deputy president of the Supreme Court, Lord Hope, described the effect of designation by the Treasury in the following terms:

“It is no exaggeration to say…that designated persons are effectively prisoners of the state…their freedom of movement is severely restricted without access to funds or other economic resources, and the effect on both them and their families can be devastating.”

So there it is. The hon. Member for Cambridge described the powers as “draconian”, and they are certainly strong and punitive by nature.

In the Ahmed case, the Supreme Court held that the United Nations Act 1946 did not give the Treasury the power to make such a broad order and the asset-freezing regime was immediately voided. Rather unusually, the Supreme Court refused to grant a stay of execution of its judgment. In the Ahmed case, Lord Brown noted:

“The draconian nature of the regime imposed under these asset-freezing orders can hardly be over-stated. Construe and apply them how one will—and to my mind they should have been construed and applied altogether more benevolently than they appear to have been—they are scarcely less restrictive of the day to day life of those designated (and in some cases their families) than are control orders. In certain respects, indeed, they could be thought even more paralysing.”

I have made the point that there should be better safeguards. I appreciate that the appeals procedure and the change from reasonable suspicion to reasonable belief are steps forward, but the argument that the imposition of these coercive orders is best undertaken by Ministers rather than the courts seems to misunderstand the separation of powers and the role that the courts already undertake. In particular, it ignores several decades of practical experience in the courts, which have been making ex parte asset-freezing orders in a wide range of civil and criminal proceedings for the past 35 years or more and so are quite used to the procedures.

As regards national security, it seems highly implausible that the judges who sit in the specially constituted division of the High Court that hears financial restriction cases under part 6 of the Counter-Terrorism Act 2008 are somehow less capable than their colleagues in the commercial division of hearing an emergency application for a freezing order. Freezing orders are just one of many orders that the courts are much better placed than the Executive to make. I agree with a point that the hon. Member for Cambridge made in an intervention that if the measure were operated in conjunction with an arrest warrant, people might be a bit less concerned about what the Bill might mean in due course.

I hope that amendments might be proposed requiring that designation-making powers should be in the hands of the courts and not simply the Executive and requiring the designation regime be brought into the criminal justice system when designations are made against an individual, rather than a group. Applying those coercive powers on the basis of suspicion of or belief in people’s involvement in terrorism will inevitably lead to people who have never been prosecuted having orders imposed on them. The right hon. Member for Leicester East has pointed out that those who have had orders lifted are still in a precarious and highly embarrassing position because they have at some stage been suspected of terrorism, which is hardly going to place them in good standing with anybody.

I should like there to be a requirement on the courts, when making a designation, to grant a licence to enable an individual and their family to have access to such funds as are reasonably necessary for their subsistence and travel and fees for legal representation if that need arises. That would ensure that a licence was made when the matter kicked off. I should also like the Bill to reflect and uphold the basic principles of a fair trial by ensuring that any person who is subject to the regime knows in full the case against him or her and is able to present a full defence. That would involve removing the powers for special rules of court that allow for secret evidence, hearings that the interested person is barred from and the use of special advocates.

The report of the Joint Committee on Human Rights has been mentioned. The Committee would like to table useful amendments on the standard of proof. Its report states:

“We recommend that the Bill be amended to require a summary of reasons to be given in the written notice of designation, subject only to legitimate public interest concerns about non-disclosure. A mandatory statement of reasons in the written notice of designation would help to ensure that the new right of appeal is an effective remedy.”

The report also deals with the right to a fair hearing, recommending that

“the relevant provision of the Counter-Terrorism Act 2008 be amended so as to require rules of court to secure that the court’s otherwise absolute duty of non-disclosure in asset-freeze proceedings…is expressly qualified by the duty to ensure sufficient disclosure to protect the right to a fair hearing.”

There are one or two other useful suggestions, but this is Second Reading so I shall not go into great detail.

I should like to finish with two quotations. First,

“we will not defeat terrorism by reneging on this law”—

the law being the Human rights Act 1998. The quote continues:

“Upholding human rights may sometimes be terribly inconvenient in the fight against terrorists, but it is the price of democracy. We must have confidence that our democratic values can prevail. The terrorists want us to distort and bend our democratic values as we take them on—if we do that we play into their hands.”

Those were the words of Mr McNulty, an old sparring partner of mine, who was the Minister for Security, Counter-Terrorism, Crime and Policing from 2006 to 2008. He has come to the view that we have to reconsider the balance in deciding how to proceed.

Finally, I sincerely hope that the Bill will be drastically improved in Committee, because I do not want to see another example of what is becoming a regular occurrence—the Supreme Court having to do our duty for us. We are the legislators, so let us get it right. If we do not, we must heed the words of Edmund Burke:

“Bad laws are the worst sort of tyranny.”

18:47

[Guy Opperman (Hexham) (Con)]

I remind the House of my former profession as a barrister, and I compliment the hon. Member for Dwyfor Meirionnydd (Mr Llwyd) on his outstanding contribution to the debate. I could agree, in broad terms, with much of what he said.

In the case of re M, Mr Justice Ognall stated:

“We live in an age when funds may be transferred from jurisdiction to jurisdiction as rapidly as it takes me to speak this sentence.”

Those sentiments encapsulate the difficulties and predicament that we face today. How do we fulfil the UK’s duty to be at the heart of the international fight against terrorism, while protecting the basic human rights and freedoms that Britain has always prided itself on advocating in both theory and practice? We know that the legislation derives from United Nations Security Council resolution 1373, a European directive and the decision in Ahmed v. HM Treasury. Experience shows that most individuals who are engaged in or intent upon serious offending can often live with the authorities taking away their guns or explosives, or with their liberty being taken away, but what hurts them is taking away their money, because that is what fuels so much of the offending and allows the criminal or terrorist to operate.

The Bill goes a long way towards fulfilling that duty: it enables the Treasury to freeze the assets of those suspected of involvement in terrorism, with such decisions being made at national level on the basis of advice from specific law enforcement, security and intelligence agencies. Of course that means that much will rely on the accuracy of the advice received, but I suspect that the vast majority of the British public will not find such a proposal fundamentally objectionable. It should be borne in mind that many of these decisions have to be taken rapidly in circumstances where the stakes are high and the potential consequences for both sides are catastrophic.

UN resolution 1373 specifically states that we should “freeze without delay”. I suggest that the specific content of the resolution is such that there is a real desire to move at great speed. However, that must be seen in the context of our commensurate duty to be at the heart of the international effort against terrorism. Secondly, it must meet the expectations of the British public, by making the work of the terrorist organisation that much harder.

Although other anti-terrorism measures may be already on the statute book, they do not fulfil the obligation set out in resolution 1373. There will be—and this is accepted—an improvement. There are rights of appeal and judicial review that give safeguards to those caught by an order. It should give some confidence to the wider public that a specific individual has his rights properly preserved. It should also be noted that legislation such as this should never be judged by specific statistics. The right hon. Member for Leicester East (Keith Vaz) quoted specific statistics in his speech, but this type of legislation acts as a preventive measure that dissuades individuals involved in terrorism from using the UK banking system. Prevention is clearly better than cure.

The new Bill provides the power to freeze assets on a preventive basis on a reasonable suspicion of involvement in terrorist activity. Where that threat is involved, it is difficult to envisage how any other test could effectively be applied. The test is also subject to the safeguard that even if the Treasury considers there to be reasonable grounds for suspecting a person to have been involved in terrorist activity, that person’s assets can be frozen only when it is considered necessary for public protection.

I want to deal with three final points in relation to the legislation. I will not go into the detail that others have in the past. First, how will designated persons fund their appeal? At present, they are in a position whereby their ability to fund their appeal is effectively non-existent. Such legislation has cropped up in other matters of asset freezing down the years.

Secondly, and most worryingly, the definition has gone from “reasonable suspicion” to “reasonable belief”. That is, at best, a marginal change. Many a good lawyer would argue that there is almost no difference there. What is quite clear is that that is less than 50%. Something that is less than 50% always concerns any lawyer—it does not matter whether we are talking about a human rights lawyer or someone who is against the whole idea of terrorists in every particular way. When we talk about less than 50%, we have to ask what we are dealing with. Are we dealing with something that is 49%, 40%, 30%, 20% or 10%? That discrepancy is a concern, and I hope that it is addressed when it comes to the individual protestations of change that will be put before the House at a later stage in consideration of this Bill.

Finally, there must be a more wholehearted review of all these matters. We keep enacting piecemeal legislation after individual Acts have been passed over a period of time. It is not a good situation to have specific Acts dealt with on a specific short-term basis. My concerns are assuaged by what the Supreme Court said in the Ahmed case. It quashed the terrorism order on the grounds that the inclusion of “reasonable suspicion” as a threshold was not necessary or expedient. It noted that “reasonable suspicion” was not specifically referred to in UN Security Council resolution 1373, and it concluded that the general words of section 1 of the United Nations Act 1946 did not give anyone the authority to make an order that interfered with fundamental rights on the basis of a “reasonable suspicion” threshold. However, and I suggest that this is the key point in relation to why the Government are going ahead on this basis, the Supreme Court did not condemn the terrorism order on wider grounds of incompatibility with human rights. Those members of the court who commented on the arguments in the Ahmed case suggested that the Terrorism (United Nations Measures) Order 2006 was disproportionate and dismissed such arguments. I hope that we will go forward with a greater sense of will so that when the Macdonald report and other such reports come before the House, we are in a position to consider everything together.

18:56

[David Simpson (Upper Bann) (DUP)]

The Bill is a sincere attempt to deal with important issues. As such, I give it a very general welcome, but I have a number of issues that I should like the Minister to respond to when he winds up. The shadow Minister, the right hon. Member for Delyn (Mr Hanson), made reference to Northern Ireland. As a former Minister in the Northern Ireland Office, he will be aware that in Northern Ireland we had the Assets Recovery Agency, which was amalgamated into the Serious Organised Crime Agency, so we are somewhat familiar with the freezing of terrorist or criminal assets.

As my hon. Friend the Member for Dwyfor Meirionnydd (Mr Llwyd) made reference to UN Security Council 1373 and some of its elements, I will not go into that now. Suffice it to say, the resolution makes it the duty of Government actively to prevent the financing of terrorist acts. Secondly, it makes it the duty of Government actively to prohibit, and not just prevent, their own nationals and those within their territories from making funds, financial services or economic resources available to such persons.

This Bill deals with important matters. All of us who live within the United Kingdom, live at a time when those elements of that resolution are very relevant in every corner of the country. Those of us who live in Northern Ireland are all too well aware of the fuel laundering, the cigarette smuggling, the illegal sex trade and a host of other money-making activities that have been used to finance, in the past, the Provisional IRA and other terrorist groups. We are also aware of the way in which such activities continue to be employed as a financial engine for dissident groups. It is important that every possible step is taken not only to close down such operations and prosecute those involved in them, but to clamp down on anyone who would facilitate or enable the accumulation of resources by such groups, the attempted concealing of such financial arrangements, and any attempt to put assets to deadly use in the pursuit of terrorist goals.

On a general level, I welcome the intentions of the Bill and I wish it well, although I have some concerns. On the detail of the provisions, the Bill applies to designated persons—that is, those who have been designated as being liable to fall within its constraints and to feel the full force of its provisions. There are two kinds of designations. I apologise if I am repeating some of the material that was mentioned earlier, but that is probably the luck of being the last speaker.

There is a final designation and an interim designation. The final designation lasts for one year and then expires unless it is renewed. An interim designation may last up to 30 days. One would suppose that an interim designation could well be enacted in order to allow for a temporary intervention while the details of a final designation were completed. Surely, then, there is a case for a provision to allow for the renewal of an interim designation.

In relation to designation, there is another question that deserves to be raised. Under the Bill, there are a number of circumstances in which a designation is not made public. I can well understand how there could be a need for some such exceptions, but chapter 2 on prohibitions states that a person has committed an offence if they deal with funds or economic resources

“owned, held or controlled by a designated person”

if they know or have reasonable cause to suspect that the person is dealing with such funds or economic resources. Under the terms of the stated possible exceptions, a decision has been taken not to publicise the designation then. Is there not a possibility that a person genuinely would not have been aware of it? Alternatively, a person could state that they were not aware of it.

The same would apply to all the offences listed in chapter 2. That is reinforced by chapter 3 and the reporting obligations of relevant institutions. In chapter 2 the obligation placed upon an individual relates exclusively to a designated person, but in chapter 3 the obligation is extended to include both a designated person and someone who is suspected of having committed an offence under any provision of chapter 2. Would there be merit in looking again at chapter 2 and bringing it into line with the obligations set out in chapter 3?

Also under chapter 3, there are civil liberty concerns that need to be considered. Provision is made to grant power to request information. The Bill bestows upon the Treasury the right to disclose this information and even provides the offences relating to the failure to comply with a Treasury request for such information. But what of circumstances in which such a request is made and it is later determined that there is no case to answer? What becomes of that information?

I should like to comment on the sentences laid down for offences set out in the Bill. Let us consider for a moment what kind of terrorist threat we are dealing with. There is the ongoing threat from dissident republican groups not only in Northern Ireland and in the Republic, but across the whole United Kingdom. In recent days these groups have attempted to kill police officers with grenades. In my own constituency they planted a bomb which very nearly killed young children. Again in my constituency, they succeeded in murdering Constable Stephen Carroll. In the constituency of my hon. Friend the Member for South Antrim (Dr McCrea) they murdered two soldiers in Massereene barracks. In recent days the Police Service of Northern Ireland raided a house that was being used by dissident republicans. Some weapons, I understand, were found and just over £100,000 in cash.

Then there is the kind of terrorist threat that resulted in the 7/7 London bombings and the desire to commit mass murder expressed by some Islamic militant groups. Those who assist them economically, those who provide the economic and financial muscle to allow them to obtain their arsenal of murder, are complicit in those murders. They aid and abet those murders. To set out a sentencing policy that lays down a maximum—not a minimum, but a maximum—sentence of seven years is wholly unsatisfactory. The tariff should be considerably higher.

On the subject of offences and sentencing, I draw attention to clause 36 and the subject of time limits. As we are dealing with people and groups who are determined to kill police officers, military personnel and ordinary men, women and children, why on earth would we allow their economic backers the opportunity to escape justice after a period of only three years following the offence? How is justice obtained for the victim and how is society made safer if those who finance terrorism are allowed to walk free once the calendar moves on to three years after the offence?

I said at the beginning that I regarded the Bill as a sincere attempt to deal with important issues and that I agree with the need for measures to be put in place. There is a need to stop the flow of resources to such groups in every possible way so, in general terms, I wish the Bill well and I hope that when the Minister concludes, he will address some of the concerns that I have raised.

19:07

[Kerry McCarthy (Bristol East) (Lab)]

As my right hon. Friend the Member for Delyn (Mr Hanson) said at the beginning of the debate on Second Reading, we support the Bill in principle and will not press it to a vote tonight. It is a measure that we would have introduced ourselves, had we still been in government, to meet our international obligations and to replace the temporary legislation and put it on a permanent footing.

The Bill has been subject to thorough scrutiny in the Lords, but in the Committee sittings next week we will not shirk from our duty to examine it robustly. As my right hon. Friend said, we will table amendments. The report of the Joint Committee on Human Rights has only just been placed before the House—I think it was available on Friday—and it contains some suggested amendments that we may table, as my right hon. Friend indicated to the hon. Member for Aberavon (Dr Francis), who chairs the Joint Committee. We will keep some of the issues under review in the light of the review being carried out by Lord Macdonald and the internal review.

It is a shame that the hon. Member for West Suffolk (Matthew Hancock) is no longer in his place. I think he slightly misunderstood some of the points made in the opening remarks made from the Opposition Benches. We did not say that the Bill was being rushed through with undue haste. That point was made by my right hon. Friend the Member for Leicester East (Keith Vaz), the Chair of the Home Affairs Committee. He did not speak in the debate—[Interruption]. I thought he had just made a number of interventions, but I stand corrected. He is such a frequent speaker in this place that I lose track of when he pops up and when he does not.

There was also a misunderstanding on the part of the hon. Member for West Suffolk about the amendments that we might table in Committee, but I hope that he will decide to become a member of the Committee and that we will be able to take up those points with him then. I should point out that it is certainly our intention to co-operate with the Government to try to get the Bill through.

I shall now turn to my notes on what my right hon. Friend the Member for Leicester East said—which does indeed confirm that he spoke in the debate—and a fascinating contribution it was, too! He said that the Home Affairs Select Committee would look into this issue more generally after Lord Macdonald had reported, and that it would examine issues such as control orders and the wider civil liberties questions. He also asked the Minister a number of questions about whose accounts had been frozen and whether the 205 such accounts related to 205 separate individuals. He also said that not much money seemed to be involved. I hope that the Minister will be able to respond to those points in his closing speech.

The hon. Member for Cambridge (Dr Huppert) is a member not only of the Home Affairs Select Committee but of the Joint Committee on Human Rights, so he has a double interest. He said that he intended to table some amendments in Committee, which presumably means that he wants to be a member of the Committee. I am not sure whether the Liberal Democrat Whips will be quite so enthusiastic about his doing that, but we look forward to seeing him next week if he is allowed. He raised some important points tonight, as did the hon. Member for Hexham (Guy Opperman), particularly about the test of reasonable suspicion being replaced after 30 days by one of reasonable belief. He said that that was still a lower standard of proof than that of the balance of probabilities. That is an important point, and it has been discussed in the other place.

[Guy Opperman]

rose—

[Dr Huppert]

rose—

[Kerry McCarthy]

I am spoiled for choice! I shall give way first to the hon. Member for Hexham.

[Guy Opperman]

I have no issue with the fact that I have been chosen over Cambridge. Do the Opposition have a specific view on what the percentage is? The hon. Lady will recall that the hon. Member for Cambridge (Dr Huppert) and I mentioned this in our speeches. Is it 40%, 30% or 20%?

[Kerry McCarthy]

Would the hon. Member for Cambridge like to intervene now, so that I can answer both hon. Members at once?

[Dr Huppert]

I was going to ask a very similar question of the hon. Lady. Will she clarify the Opposition’s policy? Should the test be one of reasonable suspicion, as under previous legislation, or one of the balance of probabilities? The right hon. Member for Delyn (Mr Hanson) seemed to suggest that there should be a very low threshold, perhaps even lower than the one the Government propose.

[Kerry McCarthy]

We welcome the fact that the reasonable suspicion test is to be in place for only 30 days before it moves to one of reasonable belief, which is slightly tougher. In response to the hon. Member for Hexham, it is a matter for the courts to interpret what “reasonable belief” would be. We need to thrash out in Committee whether that constitutes a much lower standard than the balance of probabilities. We do not have a firm view on that, but we need to debate the matter in Committee.

The hon. Member for Upper Bann (David Simpson) spoke from his experience of the Northern Ireland situation, as did my right hon. Friend the Member for Delyn, who is a former Northern Ireland Office Minister. The hon. Member for Upper Bann described the Bill as a sincere attempt to deal with important issues, but raised some questions about the interpretation of civil liberties, and it is important that they should be thoroughly debated in Committee.

The hon. Member for Dwyfor Meirionnydd (Mr Llwyd) said that it was absolutely vital to scrutinise these matters, and that, although there seemed to be unanimity of purpose across the House in that we all want to ensure that assets are not misused for terrorist purposes, that was not quite the same as ensuring that the legislation would actually work. He referred to the Dangerous Dogs Act 1991 and to the legislation that followed the shootings at Dunblane, and made the valid point that we must ensure that the legislation will not be struck down because of a perceived illegality. He quoted Burke saying that bad law was the worst kind of tyranny. This highlights the importance of scrutinising the Bill in Committee, and, although we broadly support its intentions and principles, we will subject it to robust scrutiny next week.

19:15

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

It is a pleasure to be able to conclude today’s Second Reading debate. This is a most important Bill that covers issues of national security and civil liberties. These are significant issues that deserve full scrutiny and I would like to thank all hon. Members for their eloquent contributions.

My hon. Friends the Members for West Suffolk (Matthew Hancock) and for Hexham (Guy Opperman) brought experience and expertise to the debate. My hon. Friend the Member for Cambridge (Dr Huppert) spoke in a way that I am sure his predecessor, David Howarth, would approve of. He raised a number of questions in regard to the Joint Committee on Human Rights, which I shall address in detail in a moment.

The right hon. Member for Leicester East (Keith Vaz) made a memorable speech—[Laughter.] Well, at least I will remember it. He noted that he was somewhat suspicious of anything that had cross-party support from both Front Benches. I imagine that he did not experience that very often when he was a Minister. I should like to thank the hon. Member for Dwyfor Meirionnydd (Mr Llwyd) for highlighting his concerns about knee-jerk legislation and making a similar point to that of the right hon. Member for Leicester East. The hon. Member for Upper Bann (David Simpson) brought to the debate the experience of his part of the United Kingdom, Northern Ireland, which has suffered so much from terrorism over many years. He asked a number of questions that I hope to be able to respond to later.

A number of issues have been raised in the debates over the course of this year, and I am pleased to say that the Government have responded to the concerns raised in the House earlier this year and to those raised in the public consultation exercise on the previous Government’s draft legislation. We introduced legislation as soon as possible, to ensure that Parliament has sufficient time to scrutinise the legislation properly and still meet the 31 December deadline to avoid a gap in the regime and the unfreezing of assets. The Bill before the House today is a significant improvement on the current asset- freezing regime, because it strengthens civil liberties safeguards without undermining the effectiveness of the UK’s asset-freezing regime in disrupting terrorism.

Let me address in more detail the striking of the right balance between national security and liberty in the context of the Bill. I shall deal first with the national security element of that balance. Let me be clear that, while it is true that the asset-freezing regime has an impact upon human rights, it is the Government’s view that the interferences set out in the Bill are necessary in the interests of national security and public protection. We have recently been reminded of the very real threat posed by international terrorism.

To achieve our objectives, the Government must have the right tools to combat terrorism in the UK and overseas. It is not sufficient for us to be reactive, and to be able to deal with an atrocity only after it has happened. We must be able to act preventively, to disrupt terrorist plots in their planning stages. Hon. Members will acknowledge that one of the most effective ways of doing this is to limit terrorists’ access to finance. We know that terrorists need finance to carry out attacks, to maintain their infrastructure, training, equipment and recruitment, and to promote their message of hate. In order to contain the threat that these extremists pose, the Government need to be able to act quickly to freeze the funds and finances of those involved in terrorism who are considered to present a real threat to the general public. The Government believe that the UK’s asset-freezing regime is the right means to achieve that.

There is no question but that the asset-freezing regime has proved a valuable tool for disrupting and preventing terrorist financing. The £140,000 of currently frozen assets could be used to devastating effect were they to be released. The right hon. Member for Leicester East made the point that the total amount that has been frozen is perhaps surprisingly small, but it is worth remembering that disproportionate damage can be done with a small amount of money. As we have heard, the 7/7 attacks cost less than £10,000.

[Keith Vaz]

We clearly understand that it takes only a small amount of money in certain circumstances, but will the Exchequer Secretary clarify those figures for us? Is he saying that £140,000 is frozen at the moment? Does he know the total amount that has been frozen since the previous Government introduced the original legislation, or would he be able to write to me with the number or place it in the Library so that Members will all know it?

[Mr Gauke]

The current figure is £140,000, as I said. The figure that the right hon. Gentleman talks about is £290,000, which as I understand it is the amount that has been frozen in total. He asked earlier about the 205 accounts referred to in the written ministerial statement. That does not necessarily mean that 205 people are involved, and it is worth pointing out that 24 people in the UK are subject to asset freezes under the legislation that the Bill will replace.

[Keith Vaz]

I think the fault is perhaps in the drafting of the written statement. It states:

“As of 30 September 2010, a total of 205 accounts containing just under £290,000”

were frozen. It would be helpful if, perhaps through the next such statement, we could know the current figure. That is where my figure comes from.

[Mr Gauke]

The right hon. Gentleman’s comments are helpful, as always, and I am sure they have been duly noted.

It is right to point out that asset freezing is a preventive tool, and that people can be subject to a freeze only if the legal test is met—in other words, if they represent a terrorist threat and so the freeze is necessary for public protection. The Treasury must have reasonable grounds to suspect their involvement in terrorist activity. I will return to that point in greater detail when I turn to the comments of the Joint Committee on Human Rights. It is also worth pointing out that 21 of the 24 persons in the UK subject to these measures have been charged with, or convicted of, terrorist offences.

Asset freezing is not just an effective domestic tool, it is necessary. The UK has an international obligation to freeze the assets of terrorists, and the Government are content that the Bill’s provisions remain fully compliant with international standards and are sufficiently robust to meet the needs of the police and security services, who are engaged in a day-to-day battle to maintain the security of the general public.

The right hon. Gentleman asked one or two questions about complaints. Any person who is not satisfied with a decision taken by the Treasury may request a review of the decision, and if after that review they are still unsatisfied, a complaint regarding the handling of the case can be made under the Treasury’s official complaints procedure. A senior official not directly connected with the case will then take the review decision. A designated person may appeal against their designation through the courts, and in the case of any other decision, such as on licensing, applications can be made to the High Court for the decision to be set aside.

The right hon. Gentleman asked what happens to people whose freezes have been revoked. As he pointed out, the revocation of a freeze does not show that the system is failing to work or that the imposition of a freeze in the first place was wrong. Circumstances can change, so it may no longer be necessary to maintain a freeze even though it was necessary when it was imposed. When a freeze is revoked, the individual concerned is notified, the revocation is brought to the attention of the financial sector and the outside world and the restrictions on their financial activity are removed.

One concern that has understandably been raised is whether the system is well targeted on terrorism. My hon. Friend the Member for Cambridge made that point. Terrorism, for the purposes of the Bill, is defined in clause 2(2) as involving one or more of

“the commission, preparation or instigation of acts of terrorism…conduct that facilitates the commission, preparation or instigation of such acts, or that is intended to do so”,

or conduct that supports or gives assistance to persons believed to be involved in such conduct.

To respond to the point made by the right hon. Member for Delyn (Mr Hanson) about organised crime, the Bill contains very specific powers designed to meet our UN obligations to freeze the assets of terrorists. They are not intended to be used against organised criminals unless they are also involved in terrorism, and the Government have other powers to deal with organised crime.

I turn to the very important issue of civil liberties, because we have to get that right and ensure that the balance is correct. As my hon. Friend the Financial Secretary set out, the Bill does not simply reintroduce the previous regime, which the Supreme Court quashed. We have introduced additional safeguards and made changes to ensure that the regime operates in a clearer and more transparent manner. Those changes reflect the civil liberties concerns that were raised in Parliament during the passage of the emergency legislation and in the public consultation exercise conducted over the spring and summer. We do not believe they will undermine the effectiveness of the regime or continued compliance with international best practice.

I shall highlight the key elements of those changes. We are introducing more targeted prohibitions, to limit the impact of asset freezing on innocent third parties. There is provision to ensure that the regime does not catch the payment of state benefits to the spouses or partners of designated persons, and so does not have the draconian impact on family life about which the Supreme Court was concerned. The establishment of an independent review function will ensure that there is proper independent scrutiny of the asset-freezing regime.

As the Financial Secretary highlighted, during the Bill’s passage in the other place the Government introduced significant further safeguards to raise the legal test for freezing assets for more than 30 days from reasonable suspicion to reasonable belief, and to strengthen judicial oversight by ensuring that there is a full merits-based review of designation decisions. Those are important new safeguards that will make the asset-freezing regime significantly fairer, more proportionate and more transparent, and I welcome the endorsement that they have received from hon. Members today. However, we have also heard in today’s debate, and read in the report of the Joint Committee on Human Rights, some calls for the Government to go further and introduce more civil liberties safeguards. I wish to respond to those points.

One concern that has been raised is that reasonable belief is still too low a threshold for freezing assets, and that the Government should be able to do so only on the balance of probabilities—in other words, if someone is more likely than not to be involved in terrorism. It has even been argued that asset freezes should be imposed only in cases of criminal charge or conviction. I shall reiterate why the Government do not agree with, and cannot support, those proposals.

To meet our UN obligations and protect national security, asset freezing must be preventive: that is, it must be capable of being used at an early stage to disrupt and prevent terrorist attacks. Setting the legal test higher than reasonable belief would make it more difficult to use the asset-freezing tool in a preventive manner, and therefore make it less effective because the level of evidence needed may rule out the use of asset freezing when it could be most useful.

[Dr Huppert]

Does the Minister genuinely think it appropriate to freeze people’s assets when the Treasury believes that it is more likely that they are not involved in terrorism than that they are so involved?

[Mr Gauke]

I reiterate that it is necessary to have a tool available to use at an early stage, for preventive reasons. The asset freezes imposed on those suspected of involvement in the transatlantic plane bomb plot in 2006 provide a good example of the value that preventive asset-freezing can have for national security. It is important that we preserve that element of asset-freezing. In the Supreme Court, Lord Rodger spoke of the nature of intelligence and the need, sometimes, to act on information that is fragmentary and not certain. For the same reason, the Government cannot support limiting asset-freezing to those charged with, or convicted of, a terrorist offence.

Although a significant majority of those in the UK whose assets have been frozen have been charged or convicted of a terrorist offence, limiting freezing to such people would have two significant drawbacks. First, preventing the Treasury from freezing assets when it reasonably believes that someone is involved in terrorism and when it considers that asset-freezing is necessary to protect the public, but when a person has not been, or could not be, charged, would incur a significant cost for national security. Secondly, limiting freezing in that way would severely curtail the Treasury’s ability to freeze the assets of international terrorists or terrorist groups operating overseas. Many such persons and groups operate in countries where they will not be prosecuted, perhaps because the country does not have the capability or the will to prosecute terrorists.

[Dr Huppert]

I understand the Minister’s point about those not in Britain, but what about those who are, and hence subject to our controls? Given that the threshold for powers of arrest is reasonable suspicion, does he agree that anyone who has enough evidence to freeze assets would also have enough evidence to arrest?

[Mr Gauke]

Given the flexibility that we need, I believe that we have struck the right balance by allowing an interim arrangement on the basis of reasonable suspicion followed by a longer-term arrangement on the basis of reasonable belief. Sometimes, it is a question of timing and we may need to act first on freezing assets and subsequently to make an arrest—we must remember that after all, the vast majority of those in the UK who have been subject to a freezing order have gone on to be arrested. For example, if we limited the Treasury’s freezing powers to those charged or convicted, we could prevent the UK from co-operating with international partners when we are trying to prevent funding getting to international terrorists and terrorist groups. For those reasons, the Government remain convinced that the legal test as set out in the Bill—reasonable suspicion for an interim period of 30 days and reasonable belief for a final designation—strikes the right balance.

My hon. Friend the Member for Cambridge mentioned the role of the courts, which has also been raised by civil liberties groups. They have called for a mandatory court involvement in asset-freezing. They want freezing decisions either to be made by the courts or to be approved by them mandatorily, but the Government do not support those proposals. Decisions to freeze assets are national security measures taken on operational advice from law enforcement and intelligence agencies, and fall squarely within the remit of decisions that Ministers should and do make on other matters, such as prescription, deportation and exclusion. Ministers are accountable for their designations both to Parliament and to the courts.

We also do not believe that mandatory court approval for asset freezes is the right approach. Only a very small minority of asset-freezing cases—around 10% of current cases—concern people in the UK who have not been prosecuted for a terrorist offence. The remaining 90% of cases concern either individuals in the UK who have been prosecuted or individuals and groups overseas. Mandatory court approval would therefore add no value in those 90% of cases. Indeed, it might even be unhelpful. For example, overseas terrorist groups who do not currently challenge asset freezes would nevertheless have their designations subjected to mandatory court scrutiny.

My hon. Friend also mentioned written reasons. We heard today that the JCHR recommends that an express requirement to provide reasons for a designation, subject to public interest requirements of non-disclosure, be written into the Bill. The Committee’s reasons for that were eloquently put, but the Government are not convinced that an express obligation on the Treasury to provide reasons for a person’s designation is necessary. It is already a requirement of the basic principles of administrative law to provide reasons for a designation where possible, subject to public interest requirements. If this Government or any other were to write into a Bill all the Treasury’s obligations under administrative law, such a Bill would be considerably longer. I do not see that as desirable. The time available for parliamentary scrutiny should not be spent debating unnecessary provisions. I should also make it clear that there will be times when the Government cannot divulge the case against a person or the reason for a designation, such as when sensitive intelligence has been relied on for a decision and there is an obvious case for withholding information. None the less, where possible, the Government disclose information when that can be done without, for example, damage to a pending prosecution or to national security. There is no sensible reason to go beyond that and write such a requirement into the Bill.

The JCHR also sought to convince hon. Members that the Government should accept the principle set out in the House of Lords in the case of AF on the use of special advocates and closed-source material. It said that that principle should apply to asset-freezing provisions. I am sure that hon. Members have read Hansard and are aware of the debate on that in the other place. I can but restate the points that the Government made then. First, the courts have not considered whether AF applies in asset-freezing cases, and it is not the role of the Government to prejudge what the courts would say. Secondly, the Supreme Court will consider the wider application of AF (No. 3) in January 2011 when it hears the Tariq case. Thirdly, the Government are committed to ensuring that any challenge to a Treasury decision is heard fairly. Finally, the application of AF (No. 3) is part of a wider debate on the use of special advocates and intelligence material, and we have already announced that we will be considering the use of special advocates and closed-source evidence as part of a Green Paper next year.

There will be plenty of opportunity for the JCHR and other interested parties to relay their views as part of the consultation that informs that Green Paper. It is right and proper that the Government give all parties the option of commenting on such an important mechanism without prejudging the outcome.

The final matter raised by the JCHR is the question of transparency and accountability. The Bill strengthens transparency and accountability in two ways. First, we are enshrining in legislation the Treasury’s existing practice of presenting quarterly reports to Parliament on the operation of the powers in the Bill. That will guarantee transparency on the quarterly operation of the regime. Hon. Members will note that the most recent quarterly report was laid today. Secondly, we have written into the Bill that the operation of the regime should be independently reviewed nine months after the Bill is passed and every 12 months thereafter.

The JCHR maintains that the provision in the Bill for an independent reviewer does not go far enough and that the independent reviewer should be more independent of the Government—the right hon. Member for Delyn made that point in the debate. I am sure that that will be debated further in Committee, but the Government cannot accept the JCHR position. We are committed to effective scrutiny of the asset-freezing regime and the independence of the reviewer will be a principal objective of any appointment, but for Parliament to approve the independent reviewer would be a significant departure from standard practice. The appointment of the reviewer by the Government reflects the long-standing principle that Ministers are directly accountable to Parliament and the public for those whom they appoint and for the operation of the regime.

[Mr Hanson]

I tend to agree with the Minister, as I indicated in my discussions, but can he tell the House whether the reviewer for this piece of legislation is likely to be the same one as is currently in post, which is Lord Carlile, who is soon to be replaced by David Anderson QC?

[Mr Gauke]

I am grateful for the point that the right hon. Gentleman makes. The final decision on that is still to be made, so if he will just be a little patient, he will receive the answer in due course.

[Dr Huppert]

The Government have recently started taking the approach that independent people can be scrutinised by a Select Committee to check that they are sufficiently independent. Could we go down that route to check the independent reviewer?

[Mr Gauke]

I am on the record many times as arguing why Parliament should have a significant role in a number of public appointments, but in this area we have arrangements whereby Ministers take responsibility and are accountable. We will ensure that the independent reviewer is free to examine any aspect of the regime, and his or her findings and recommendations will be released in full to Parliament. We also think that the Treasury has to have sight of the independent reviewer’s report prior to its being laid before Parliament, but that is only for the entirely sensible and understandable process of ensuring that no material detrimental to national security is inadvertently released. To answer the question specifically, Ministers have to take responsibility on this and we are not inclined to move away from that position.

I wish to address a point made by the hon. Member for Cambridge about ensuring that a designated person has reasonable expenses and is not left in desperate hardship. There is a requirement in law for the Treasury to implement asset freezes proportionately, taking full account of the human rights of a designated person and their family. My hon. Friend the Member for Hexham asked whether a designated person is able to fund their appeal—there was concern that that might not be the case. The Treasury has issued general licences to enable any legal aid payments to be made to a designated person’s solicitors where they are eligible for legal aid and to allow third parties to pay a designated person’s legal expenses. Where a designated person wishes to use their own funds for legal expenses, an individual licence can be applied for. The asset freeze does not, therefore, hinder a designated person from challenging their designation or any other decision, such as to impose particular licence conditions.

I wish also to pick up on the points raised by the hon. Member for Upper Bann. He raised the concern about decisions being taken not to publicise a designation and asked whether there is a danger that third parties are not aware of the designation—that is a perfectly fair point. The offences in the Bill apply only where a third party is aware, or should be aware, of the designation; if they do not know, and have no reason to know, no offence will be committed. I hope that that provides some reassurance to him. Where a designation is not publicised, financial institutions will still be informed, as that helps to ensure that funds are frozen. I reassure him that decisions not to publicise are rare and are always taken for very good reasons, and that the designated person will be told.

I also wish to pick up on the hon. Gentleman’s point about whether someone could be subject to a 30-day freeze on the basis of suspicion and then be subject to another such freeze after the first one is dropped. Freezes cannot be continually retained on the basis of reasonable suspicion by dropping a freeze after 30 days and then reimposing it as the new interim freeze based only on reasonable suspicion arising from the same or substantially the same evidence—clause 6(3) makes specific provision on that. A new interim freeze could be made if there is significant new evidence that significantly contributes to a fresh reasonable suspicion on the Treasury’s part. Without such new evidence, a freeze could be maintained after the 30 days only if there was reasonable belief that the person is involved in terrorism.

I shall now deal with the questions raised by the right hon. Member for Delyn about the overall counter-terrorism review and its relationship with this Bill. This is a stand-alone Bill and it is not intended to be further amended by the counter-terrorism review. The Government have already considered civil liberties safeguards for this Bill and introduced amendments at Committee stage in the other place, as I have mentioned. There is no intention to amend the Bill further.

In conclusion, today’s debate has been about the balance between national security and safeguarding civil liberties. I am convinced that the Bill strikes the right balance between both. It is effective and fair, it takes the necessary steps to prevent the raising and use of funds for terrorist purposes and it sets the terrorist asset-freezing regime in primary legislation for the first time. I commend the Bill to the House and look forward to further discussion in Committee.

Question put and agreed to.

Bill accordingly read a Second time.



Terrorist Asset-Freezing etc. Bill [Lords] (pROGRAMME)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the following provisions shall apply to the Terrorist Asset-Freezing etc. Bill [Lords]:

Committal

1. The Bill shall be committed to a Public Bill Committee.

Proceedings in Public Bill Committee

2. Proceedings in the Public Bill Committee shall (so far as not usbpreviously concluded) be brought to a conclusion on Thursday 25 November 2010.

3. The Public Bill Committee shall have leave to sit twice on the first day on which it meets.

Consideration and Third Reading

4. Proceedings on consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which those proceedings are commenced.

5. Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.

6. Standing Order No. 83B (Programming committees) shall not apply to proceedings on consideration and Third Reading.

Other proceedings

7. Any other proceedings on the Bill (including any proceedings on consideration of any message from the Lords) may be programmed.—(Angela Watkinson.)

Question agreed to.



Terrorist Asset-Freezing etc. Bill [Lords] (Money)

Queen’s recommendation signified.

Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),

That, for the purposes of any Act resulting from the Terrorist Asset-Freezing etc. Bill [Lords], it is expedient to authorise—

(1) the payment out of money provided by Parliament of any expenses incurred by

the Treasury or any other Minister of the Crown in consequence of the Act; and

(2) the making of payments into the Consolidated Fund.—(Angela Watkinson.)

Question agreed to.

Sports Grounds Safety Authority Bill (Money)

Monday 15th November 2010 Commons Chamber

Queen’s recommendation signified.

19:46

[The Minister for Sport and the Olympics (Hugh Robertson)]

I beg to move,

That, for the purposes of any Act resulting from the Sports Grounds Safety Authority Bill, it is expedient to authorise the payment out of money provided by Parliament of any expenditure incurred by the Secretary of State by virtue of the Act.

I should like to take the opportunity to thank my hon. Friend the Member for Woking (Jonathan Lord) for introducing this important Bill, and I am pleased to be able to confirm the Government’s support. On Second Reading, it was the will of the House that the Bill should be discussed in Committee. The Bill repeals and replaces the statutory basis for the Football Licensing Authority and thus triggers the need for a new money resolution. The Bill seeks to reconstitute the FLA as the sports grounds safety authority and will extend its advisory functions so that it has the power to provide advice about safety at sports grounds to any national or international organisation, person or body.

The FLA receives grant in aid funding from my Department of just under £1.2 million a year to carry out its statutory functions, including advising on spectator and venue safety issues at football grounds in England and Wales. The Government are very clear that the FLA carries out an important role and want this to continue, but we also want to allow it more freedom to develop and thus become more independent from government and less reliant on public funding. The FLA has built up a national and international reputation for expertise in the area of sports ground safety, but the statute prevents it from formally sharing that advice with other sports or with those in other countries, and it is right that we remove that restriction.

Extending the FLA’s advisory role will be especially important as we approach the biggest sporting events that this country has ever staged, including the London 2012 Olympics and Paralympics. It makes complete sense to free the FLA from current constraints and allow it to provide advice to the London Organising Committee of the Olympic Games and Paralympic Games and local authorities in relation to non-football Olympic venues. That would allow the authority to offer such advice to other sports, creating the potential to help to ensure greater consistency in the application of sports grounds safety advice across all sports.

The new role will not extend the FLA’s regulatory role, nor will it add any burdens to football clubs, other sports or local authorities or, indeed, change the safety regime for football or other sports grounds. The Government are committed to reducing regulatory burdens, not increasing them. In addition, local authorities and others will not be required to seek advice from the new authority in relation to sports grounds.

Although the authority will be able to charge for its advice in certain circumstances, providing that it has the consent of the Secretary of State, that will be limited to cost-recovery only, so there is no risk of the fees being unreasonable. Those charges will simply ensure that the costs of providing the advice are generally met by those who receive the benefits of that expertise, rather than by any increased public expenditure. However, there still may be occasions when it is not justifiable to charge, and when the organisation can easily absorb the costs of that advice. It is therefore important that there are no doubts in relation to the use of publicly funded resources by the sports grounds safety authority. On that basis, I commend the motion to the House.

19:51

[Ian Austin (Dudley North) (Lab)]

I thank the Minister for his courtesy earlier today. As he said, the Football Licensing Authority was established in the wake of tragedies at football grounds such as Hillsborough in 1989 and Heysel in 1985. Following Lord Justice Taylor’s final report on the Hillsborough disaster, the FLA was charged with responsibility for monitoring local authorities’ oversight of spectator safety at international, premiership and football league grounds.

The Minister is absolutely right about the FLA’s importance. My right hon. Friend the Member for Knowsley (Mr Howarth) referred to the establishment of the FLA as a debt of honour to the families of those who lost their lives at Hillsborough; my hon. Friend the Member for Halton (Derek Twigg), who was at Hillsborough on the day of the tragedy, said that he believes the FLA was the correct response to helping to ensure that nothing like that happens again; and my hon. Friend the Member for Wirral South (Alison McGovern) has already raised a series of concerns and questions about the Bill with the Minister for the Cabinet Office and Paymaster General, the right hon. Member for Horsham (Mr Maude), and I know that she will scrutinise its details as it proceeds through the House. Other hon. Members with Merseyside constituencies and interested members of the public have also raised a number of questions.

Margaret Aspinall, of the Hillsborough Family Support Group, for example, said that the Government

“must make sure there is no cost-cutting on safety.”

We agree and believe that any dilution of the focus on safety at football grounds would be a cause for concern. I welcome the additional details that the Minister has provided today, because it is fair to say that the detail of the Government’s intentions had not been crystal clear.

The Government announced the abolition of the FLA in the spending review and said that its responsibilities were being “transferred to another body”. They obviously support the Bill, but the Minister for the Cabinet Office has been reported as saying that the responsibility for safety at grounds will shift to local authorities, so although we will not oppose the motion, we will vigorously scrutinise the Bill in Committee in order to ensure that safety is not compromised.

19:53

[Jonathan Lord (Woking) (Con)]

I am grateful to the Minister for moving the motion and supporting my Bill, and to the shadow Minister for his guarded support at this stage. I hope that we can make that the Opposition’s full support in due course. I hope also that the House will allow the Bill to proceed into Committee.

The Football Licensing Authority was set up by the Football Spectators Act 1989 in the wake of the Hillsborough disaster. Over subsequent years, the authority and its key personnel have gained an extremely good reputation for their expertise and experience in football ground safety, but the organisation has been forced to turn down requests from other sports and sports grounds for safety advice, as its existing statutory remit extends only to football—even though those seeking that advice had indicated their willingness to pay.

The increased advisory role that the Bill proposes will usually be provided at no additional cost to the organisation or to the public purse. The sports grounds safety authority will be able to charge to recover its costs for providing advice about the safety of sports grounds, but that will be with the consent of the Secretary of State, and there will be no requirement for the authority to offer its advice.

A charge for the authority’s advice will not always be appropriate or necessary, for example when giving one-off, informal views, so such costs will be easily absorbed by the authority’s existing resources.

As the Minister explained, his Department is committed to funding for the FLA of just under £1.2 million a year, and that figure should not have to rise as a result of the Bill. The Bill will allow the sports grounds safety authority to generate additional income streams, especially from advice to other sports. Charges for that advice will not be allowed to generate profits, but the authority will be able to include an element of fixed and running costs, thereby relieving pressure on public funding.

In particular, the Bill will enable the authority to become fully involved with safety advice and guidance to the London Organising Committee of the Olympic Games and Paralympic Games and to local authorities in relation to the 2012 Olympic venues. As we prepare to welcome the rest of the world to our shores for the Olympic and Paralympic games, I trust that the House will approve the motion and, in due course, the Bill in order to help to ensure that the games are as safe as we can possibly make them. I commend the motion to the House.

Question put and agreed to.

Business without Debate

Monday 15th November 2010 Commons Chamber

Delegated legislation

Monday 15th November 2010 Commons Chamber

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Immigration

That the draft Immigration (Biometric Registration) (Amendment) Regulations 2010, which were laid before this House on 11 October, be approved.—(Angela Watkinson.)

Question agreed to.

Sunderland Point

Monday 15th November 2010 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Angela Watkinson.)

19:56

[David Morris (Morecambe and Lunesdale) (Con)]

I tabled this Adjournment debate to highlight the plight of an area in my constituency called Sunderland point. Sunderland point is a narrow sliver of land. It could not be described as a peninsula or as an island, yet it is effectively an island when the tide comes in. One has to travel across the estuary to reach it.

Sunderland point is the only area of its kind left in the whole world. It is literally an area of outstanding natural beauty, and it is steeped in history. The point flourished in the 1600s and 1700s because of the slave trade and the import of wood. It was Britain’s main port at the time. Over the years, it has become a shrimping community where people get on with their daily lives, but, owing to the death of a slave boy called Sambo at the point in the early 1700s, the movement to enact the abolition of the slave trade began there.

The child believed, legend has it, that his master had deserted him, and he took ill and died. There was outrage, because the boy was buried in an unconsecrated grave, and, although the issue took years and years—several decades indeed—to reach this House, eventually Wilberforce pushed through his Bill to abolish slavery. On the child’s tombstone, there is a poem, and the very last line—

“Not on Man’s color but his worth of heart”—

was a clarion call for abolition. Bonnie Prince Charlie also landed at Sunderland point, from where he invaded the British isles.

More recently, Sunderland point has been under threat from coastal erosion. The point is estimated to be eroding by 1 metre a year. The locals say more, but official figures state about 1 metre. Nevertheless, the point is now eroding rapidly, because the sea has started to reach an area of fields, where there is mainly clay, rather than rock. The problem is that the question of who can help the community seems to have fallen between the cracks of various points of officialdom. Natural England seems to be the main roadblock. This is supposed to be an area of special scientific interest, but I cannot for the life of me see why it would have any scientific interest if it is not going to be there in 50 years’ time. The Environment Agency has a strategic plan to hold back the tide, but no money to enact it. This story has been running for the whole week on local radio and television and in the regional media.

The community is well on the way towards getting the money to put up a wall of aggregate to stop the point eroding. That will not cost the taxpayer any money whatsoever. It is a shrimping community, and people want to preserve their way of life. It is the only place left in the whole world like it. There is evidence to suggest that George Washington’s family sailed from Sunderland point to the new world, and we all know what happened from there on in.

I am fighting against the plight of my local residents on their behalf because this is an area of outstanding historical value. Once it has gone, it will have gone for ever—and it will be gone within 100 years. Moreover, the way that the waters move and swell in the bay means that they will eventually start eating away at Glasson dock, which is a working port and a big employer, and affect the village of Overton. The Environment Agency has a management realignment plan for that, but let us say it in plain English: in layman’s terms it is coastal erosion.

I am asking the Department for Environment, Food and Rural Affairs to consider using its powers under section 16(1) of the Natural Environment and Rural Communities Act 2006 to overrule Natural England if it continues to block efforts to install the flood defences that the local community badly need to put in place to save Sunderland point.

20:01

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Richard Benyon)]

I am extremely grateful to my hon. Friend the Member for Morecambe and Lunesdale (David Morris) for raising this important issue and for offering me the opportunity to discuss the Government’s approach to managing erosion and flood risk on our coastlines and to respond to his specific points.

The area that my hon. Friend describes is one of extraordinary historical value, and I genuinely appreciate its importance for so many people in his constituency and beyond. The connection that he made with George Washington will no doubt excite interest from beyond our shores. The historical connection with the abolition of slavery is a remarkable story. One can only imagine the tragic consequences that led to the siting of the grave he mentioned, and the importance of that in leading to the whole debate that ended up in this place and saw one of the scourges of the history of this country and of the world consigned to the history books.

I fully appreciate that coastal flooding and erosion are issues of significant concern for my hon. Friend’s constituents and for other coastal communities living in vulnerable areas. On a recent visit to another part of the coast, I saw at first hand the difficulties that coastal change causes for communities.

Before I turn to the detailed points that my hon. Friend made regarding Sunderland point, I would like to outline what was agreed for funding in the spending review and to explain the Government’s general approach to managing flood and coastal erosion risk. The Government are committed to protecting people and property from flooding and coastal erosion where it is sustainable and affordable to do so. I appreciate my hon. Friend’s point about money, and I will talk about that specifically in a moment. In the recent spending review, flood and coastal erosion risk management was identified as a priority area for DEFRA. My Department has made it clear that we will protect front-line services such as forecasting and warning services and incident response, and prioritise the maintenance of existing defences. Times are tough, and it will be difficult to kick off new defence projects over the next couple of years, but as a result of the investment that we are making, we expect to deliver better protection from flooding and erosion to 145,000 households by March 2015. Annual budgets are yet to be finalised, and my hon. Friend will therefore appreciate that it is not possible to discuss individual projects. However, for the benefit of the House I should add that defences already under construction will be completed under existing arrangements.

It is important that we are honest with communities about what can and cannot be done. As I have said to the EFRA Committee, a generation of politicians across several Governments have given assurances about coastal defences that it has not been possible to live up to. The idea that we could “hold the line” on the whole of our coastline in perpetuity, and defend every house, was a notion that was wrong from the outset, but that does not mean that we cannot successfully work with local communities in areas such as the one that my hon. Friend describes. However, although it is not possible to protect all areas, there is more that we can do through innovative approaches. A number of communities are already taking the lead in identifying alternative sources of funding for defences or trialling ways of “rolling back” homes and maintaining local amenities where erosion is taking place.

Let me turn to the specific case of Sunderland point. As my hon. Friend points out, Sunderland village is located on a headland and is frequently cut off from the mainland by the high tide. Properties in the village have flooded on six occasions in the past 20 years. Sunderland point is an uninhabited area at the tip of this headland. As a result of coastal erosion, it has retreated by 75 metres since 1848. I appreciate that this has been an issue of significant concern for the residents of Sunderland village, who fear that the erosion of the point may increase the risk of flooding to their homes. That is a point of concern to a wider population who recognise the amenity and the historical value of this site.

The Environment Agency has investigated the issue and has concluded that erosion of the point is not increasing the flood risk to Sunderland village. I appreciate that that conclusion will concern my hon. Friend. I am aware, however, that flooding continues to pose a threat to the village. As he intimated, there is not a sufficiently strong case for national funding of flood defences for Sunderland village because there are not the benefits to justify the costs. However, the village did benefit from a DEFRA grant scheme in 2008, through which the Environment Agency and the local authority provided property level flood protection measures to 30 houses that are at risk.

As my hon. Friend said, people in the local community have done precisely what we want them to do, which is to come forward with innovative local solutions that can secure a coastline that they feel is important to deal with the risk that they face and to protect a much-loved environment. We have to unblock a blockage within government, at whatever level that is, as regards whether, in protecting a site of special scientific interest, we may be causing other damage that neither I nor my hon. Friend are aware of. That is the conversation that I will be having in response to the very sensible points that he makes. I will talk to Natural England as a matter of urgency to get to the bottom of this issue, because I recognise its importance locally.

It is clear that flooding and coastal erosion are very serious issues for this community and many other communities along that part of the coastline. We know that the effects of climate change will only increase the pressure on such communities. Funding is clearly the key issue but, as my hon. Friend pointed out, taxpayer funding is not an issue in this case. That is a very important matter that I will take forward. We in DEFRA are consulting on a new approach to funding that will be more transparent and give local areas a bigger say in what action is taken to protect them in return for more local contributions. The Government will continue to focus on those at greatest risk and on people in the most deprived areas of this country.

I thank my hon. Friend for the opportunity to debate these issues today. I give him the firm assurance that I will take up the points that he raises and, if necessary, get him together with the officials whom he believes are holding up the situation. I want to ensure that all agencies of government are working together and that we are not only doing everything we can to protect sites of special scientific interest in important historical locations such as the one he describes but working to reassure local communities that everything that can be done is being done to support their obvious and expected intentions in wanting to protect their homes from flooding and coastal erosion.

Question put and agreed to.

20:09

House adjourned.

Written Ministerial Statements

Monday 15th November 2010 Written Statements

Monday 15 November 2010

Counter-Terrorist Asset-Freezing Regime

Monday 15th November 2010 Written Statements

[The Financial Secretary to the Treasury (Mr Mark Hoban)]

The Government are committed to reporting quarterly on the operation of the UK’s terrorist asset-freezing regime. We believe this is essential to ensure transparency and accountability of the regime. The Terrorist Asset-Freezing etc. Bill will enshrine in law the commitment to report quarterly to Parliament.

This report covers the period July to September 2010.¹

Asset-freezing designations

In the quarter July to September 2010, the Treasury gave no new directions under the UK’s domestic terrorist asset-freezing regime.

During this quarter, the EU added seven people to EC Regulation 881/2002, implementing the UN al-Qaeda and Taliban asset-freezing regime established under UNSCR 1267.

As of 30 September 2010, a total of 205 accounts containing just under £290,000² of suspected terrorist funds were frozen in the UK.

Reviews under the Terrorism Orders

The Treasury keeps domestic asset-freezing cases under review and completed 34 reviews in this quarter. From these 34 reviews 13 persons had their designations revoked.

The Terrorism Order 2009 contains a provision that designations made under the previous Terrorism Orders 2001 and 2006 expired on 31 August 2010 and that beyond 31 August freezes can only be made or renewed under the 2009 Order. All persons subject to domestic terrorist asset-freezes in the UK are now subject to the 2009 Order and benefit from the additional safeguards set out in that order compared with the previous orders.

Licensing

Maintaining an effective licensing system is important to ensure the overall proportionality and fairness of the asset-freezing regime, whether the individuals concerned are subject to an asset-freeze in accordance with a UN or EC listing, or domestic terrorism legislation. A licensing framework is put in place for each individual on a case-by-case basis. The key objective of the licensing system is to strike an appropriate balance between minimising the risk of diversion of funds to terrorism and meeting the human rights of affected individuals and their families. Licences contain appropriate controls to protect against the risk of the diversion of funds for terrorist finance.

Eighteen licences were issued this quarter in relation to 15 persons subject to an asset-freeze under the al-Qaeda and Taliban and domestic terrorism regimes.

Of these 18 licences, 11 revoked and replaced earlier licences. There were no variations to licences this quarter.

Proceedings

In the quarter July to September 2010, no proceedings were taken for breaches of the prohibitions of the Terrorism Orders or the al-Qaeda and Taliban (Asset-Freezing) Regulations.

Developments

The Terrorist Asset-Freezing etc. Bill: The Bill has completed its passage through the House of Lords and Second Reading in the House of Commons takes place on 15 November 2010.

Kadi v. Commission: Yassin Abdullah Kadi was listed under EC Regulation 881/2002. This regulation gives effect to the UN al-Qaeda and Taliban asset-freezing regime (UNSCR1267) in the EU. Mr Kadi challenged his listing under this regulation, arguing that it breached his fundamental rights under European law.

On 30 September the European General Court upheld Mr Kadi’s challenge, annulling the EC regulation, in so far as it applied to Mr Kadi. The judgment will take effect on 10 December unless an appeal is lodged, in which case it will be stayed until the appeal has been decided.

The Kadi case concerns how EU member states implement their obligations to freeze the assets of sanctioned individuals under the UN al-Qaeda and Taliban regime. It does not concern the UK’s domestic terrorist asset-freezing regime.

¹ The detail that can be provided to the House on a quarterly basis is subject to the need to avoid the identification, directly or indirectly, of personal or operationally sensitive information.

² This figure reflects account balances at time of freezing and includes approximately $58,000 of suspected terrorist funds frozen in the UK. This has been converted using exchange rates as of 15/10/10. Future fluctuations in the exchange rate may impact on the contribution this sum makes to future totals of suspected terrorist funds frozen.

London 2012 Community Sport Legacy

Monday 15th November 2010 Written Statements

[The Minister for Sport and the Olympics (Hugh Robertson)]

Following my statement of 20 July, Official Report, columns 8-9WS, on the coalition Government’s priorities for sport, I am today announcing the community sport and mass participation Olympic legacy programme. Places People Play.

Places People Play will be delivered by Sport England, in partnership with the British Olympic Association (BOA), the British Paralympic Association (BPA) and the London Organising Committee of the Olympic and Paralympic Games (LOCOG.) It is a £135 million lottery funded initiative that will help build and upgrade sports facilities, protect playing fields and create sporting opportunities and challenges to encourage people up and down the country to get into sport—whether that be as a participant, leader or volunteer. This investment has been made available through the Government’s lottery reforms that have resulted in more lottery money going to sport.

This programme will help to deliver Lord Coe’s commitment to a lasting sports legacy to the London 2012 Olympic and Paralympic games. Over the coming months Sport England will engage with the national governing bodies of sport and other key delivery partners to ensure that this commitment is realised.

Justice and Home Affairs (Post-Council Statement)

Monday 15th November 2010 Written Statements

[The Parliamentary Under-Secretary of State for the Home Department (James Brokenshire)]

My right hon. Friend the Lord Chancellor and Secretary of State for Justice, Kenny MacAskill the Scottish Secretary for Justice, and I attended the Justice and Home Affairs Council on 8 and 9 November in Brussels.

The Council began with Mixed Committee with Norway, Iceland, Liechtenstein and Switzerland (non-EU Schengen States). The Commission provided an update on the progress of the second generation of the Schengen Information System II (SIS II). Since there were no major developments reported, it was suggested it may not be necessary to discuss SIS II at every Council as was the present standing commitment.

Next the Council noted progress towards an amending regulation on Frontex, the EU external borders agency. The new regulation is intended to increase the capacity of Frontex to strengthen the security and surveillance of the external Schengen borders, to develop relationships with third countries, and to better assist member states to return those with no right to remain in the EU. The UK is not directly affected as the amending regulation relates to those elements of the Schengen Acquis in which we do not participate. However, the Government support the extension of Frontex’s remit to allow it to handle the personal data of those suspected of involvement in criminality at the border. We believe that being able to gather and share these data with other agencies, such as Europol, is vital to Frontex’s contribution to the fight against human trafficking and smuggling. The Commission confirmed that it had dropped its opposition to Frontex handling personal data, but emphasised that the purpose should be limited, with necessary safeguards on data protection and the respect of human rights.

The Commission updated the Council on the draft regulation establishing a network of immigration liaison officers, with a view to reaching agreement between Council and Parliament before the end of the Belgian presidency. The amended regulation is intended to strengthen the EU’s capacity to address illegal migration, and seeks to achieve greater benefit from Immigration Liaison Officer (ILO) networks for Frontex and the Commission. The UK supported the proposal’s aim to strengthen partnership working on illegal immigration, but objected to the failure of the text to reflect the application of the UK and Irish opt-in protocol. The UK had a right to opt-in to measures pursuant to this part of the treaty and highlighted that a recital should be inserted to reflect the Government’s decision to opt-in. The UK would not be able to support agreement until that amendment was made.

Next the Council discussed the sixth report from the Commission on the maintenance of visa requirements with third countries. Commissioner Malmstrom said progress was being made on the lack of Czech-Canada reciprocity. The Council then adopted an amendment to the Common Visa List to grant Albania and Bosnia-Herzegovina nationals access to the Schengen area without an EU visa, subject to a strengthened monitoring mechanism to allow for a rapid suspension in the event of a sudden inflow. Ministers from Albania and Bosnia-Herzegovina joined the Council for this item to welcome the decision. The UK will not be affected by changes to the regulation on the Common Visa as it builds on elements of the Schengen Acquis in which we do not participate.

Following Mixed Committee, the presidency gave a progress report on those dossiers being prioritised by the Belgian presidency under the Common European Asylum System noting that the Council was close to agreement on the Dublin and Eurodac regulations, although several delegations intervened to argue for the inclusion in the latter of law enforcement access. The UK acknowledged the presidency’s determined efforts to reach agreement on these measures, but thought the EU’s emphasis should be on practical co-operation. The UK highlighted that support for Greece was vital, that the Greek action plan was a real step forward, but there was an urgent need to act with strong leadership by the Commission. The UK stated that in the right circumstances we could send asylum caseworkers to support Greece, but there had to be a proper funding source at EU level. The UK highlighted that Dublin should be supported, not suspended. Rather than legislation that would increase the rights of all asylum seekers (whether or not their claims were valid), member states should provide faster protection for those in need, while protecting EU asylum systems from abuse.

Over lunch Interior Ministers discussed solidarity in the field of immigration and asylum and, at the request of Germany, the aviation security incident, involving cargo freight originating in Yemen. The UK updated on the current threat and its response to date. The UK also raised the importance of an EU PNR directive that included intra-EU flights.

The French Minister also informed the Council of the establishment of a “Mediterranean Office for Youth” in 2011; an intergovernmental initiative to improve mobility for young people through, for example, work experience opportunities.

After lunch Council conclusions on the creation and implementation of an EU policy cycle on organised crime (Project Harmony) were adopted. The mechanism should allow an intelligence-led approach to prioritising and tackling agreed threats from serious organised crime.

The presidency then sought a firm political steer on the way forward for implementation of the Prum Council decisions. The UK stated that it would not meet the August 2011 deadline for implementation. The UK acknowledged the offer of EU funding and suggested the deadline should be reconsidered. The UK could not support harmonisation of post-hit operational business rules. The presidency called on all member states to fulfil their commitments and make use of the support available.

Under AOB the Commission presented their initiative for a regulation on the marketing and use of explosives. The regulation proposes to limit access by the general public to specific chemicals that can be used to manufacture home-made explosives by restricting their use and possession above set concentration thresholds. There was no discussion.

The Hungarians called on the presidency and Commission to focus on the Eastern Partnership and on delivering a migration dialogue with the Russian Federation during discussions on the Prague process-building migration partnerships. The process is intended to implement strengthened practical and operational co-operation with main countries of transit and origin based on the global approach to migration—specifically the Eastern migration route, which includes Czech Republic, Hungary, Poland, Romania and Slovakia.

On the Justice day the Commission presented its proposal for a directive on attacks against IT systems which would replace the existing framework decision, which was part of a broader package of measures to combat cybercrime. The presidency looked forward to negotiations under the Hungarian presidency. The Government are considering whether the UK should opt in to this proposal.

There was an orientation debate on the European Investigation Order (EIO) which deals with cross-border requests for evidence in criminal proceedings. The UK supported the proposal but highlighted that some issues needed further debate at working-group level, in particular grounds of refusal. We needed to look further at cost, proportionality and dual criminality, in particular in relation to coercive matters. Proportionality must be a consideration in both the issuing and executing state. The presidency concluded that it would report on progress in December after further negotiations.

The presidency then provided an information point on the directive on the right to information in criminal proceedings. This is the second measure in the road map for strengthening criminal procedural rights and it aims to set common minimum standards and improve the rights of suspects and accused persons by ensuring that they receive information about their rights. The presidency stated that while progress has been made on this directive, it was essential to take account of the common law systems. The Commission reiterated this and encouraged member states to support the presidency in finding a solution that worked for all. The presidency will seek a general approach on this directive at the JHA Council on December 2-3.

The Commission presented the mid-term review of the Drugs Action Plan and stressed the seriousness of the drug abuse problem in Europe and the need for implementation of the plan. It accepted that it was not the right moment to expect higher investment in drug prevention and treatment programmes but it was also not the moment to cut investment. The European Monitoring Centre for Drugs and Drug Addiction (EMCDDA) presented its annual report which was published on the 10 November.

Over lunch Justice Ministers received a presentation from the presidency on whether EU action was required to enhance cross-border co-operation in border regions: this was intended to give guidance to the EU Prosecutors Forum at the end of November.

Pension Protection System (Administration Levies)

Monday 15th November 2010 Written Statements

[The Minister of State, Department for Work and Pensions (Steve Webb)]

I am pleased to announce that for 2011-12 the rates for both the PPF administration levy and the general levy will remain at the same levels set for 2010-11.

Some of the administrative resource costs of the Pensions Regulator (tPR), the Pension Protection Fund (PPF), the Pensions Advisory Service (TPAS) and the Pensions Ombudsman (PO) are recovered through levies raised on pension schemes. The rates for these levies are set in regulations.

Levy rates in year are set to avoid frequent changes and do not directly reflect forecast future costs but also take into account accumulated deficits or surpluses in expected levy collection. In holding rates stable, the Government are seeking to avoid additional cost pressures on pension schemes. The rates have remained unchanged since 2008; this stability will be welcomed by levy payers, pension scheme trustees, members and sponsoring employers.

State Pension Credit Research Study

Monday 15th November 2010 Written Statements

[The Minister of State, Department for Work and Pensions (Steve Webb)]

Starting from today, the Government are running a study exercise to look at ways of making better use of the data they hold about individuals, both from DWP administrative records and those of Her Majesty’s Revenue and Customs in order to help improve take-up of pension credit.

This study has been designed to meet the following objectives:

Provide information about how people might feel about a system which makes more use of personal information that the Government already hold to pay people pension credit without the need for a claim.

Evaluate ways of using the data available to the Government to improve take-up under the current pension credit regime.

Deliver evidence about how in the long term a reshaping of the benefit or acquisition of better data might enable the Government to streamline radically the process for awarding pension credit.

This study will involve making awards of estimated pension credit to a randomly selected group of some 2,000 pensioners who, based on the personal information held, appear to be entitled to pension credit but not claiming it. These payments of benefit will be made for 12 weeks without those selected first needing to have made a claim. The first payments will be made in December and conclude in March 2011.

At the end of the study there will be a thorough evaluation, with initial findings expected from summer 2011.