Small Business, Enterprise and Employment Bill
Lord Lloyd of Berwick Excerpts(9 years, 8 months ago)
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Lord Cunningham of Felling (Lab)
My Lords, I support the intervention of the noble Lord, Lord Butler, who seems to have got to the nub of this issue: the amendment is not about abolishing anything; it is about abolishing exploitation at the lower end of this employment policy. I could not disagree more with what the noble Lord, Lord Stoneham, said, which seemed to be a hagiography of the system. He seemed not to recognise that vulnerable people are regularly and deliberately exploited by it. I believe that the amendment in the name of my noble friend Lady Hollis is aimed at correcting that exploitation and nothing more. It is not about abolishing the system, as the noble Lord, Lord Stoneham, seemed to imply—I apologise if I have misinterpreted his comments. The noble Lord, Lord Butler, has got this absolutely right. That is why I urge the House to support my noble friend’s amendment.
Lord Lloyd of Berwick (CB)
My Lords, I, too, support the amendment and I do not share the difficulties which it is obvious are felt by the noble Lords, Lord Stoneham and Lord Deben. If those difficulties have any force, they were surely answered by my noble friend Lord Butler.
I support the amendment on the simple grounds of fairness. It is not confined to zero-hours contracts, but one imagines that those will be the most frequently affected. The facts in relation to them have been clearly set out by the two noble Baronesses who introduced the amendment. If an employee on a zero-hours contract is given notice by his employer that there will be work for him the following morning, and if he turns up having incurred expense and finds that his shift has been cancelled, it seems only as a simple matter of fairness—I think that that was how it was put—or of justice that some compensation should be payable.
I suggest to your Lordships that that is how we would all behave in our private lives. If I had a gardener, which I do not, and they turned up hoping for work and found then that the weather was against them or that the ground was too hard, of course I would offer them any expenses that they might have incurred in coming for work which in the event was not available. If that is the way in which we would behave in our private lives, is it not sensible that that is how we should require employers generally to treat their employees? I can see none of the difficulty seen by the noble Lord, Lord Deben, in terms of employment drying up as a result. This is a simple matter of fairness to avoid exploitation—a word which was also used. That reason seems to me to be enough to persuade the Government to accept the amendment.
Baroness Harding of Winscombe (Con)
My Lords, I oppose the amendment, which I appreciate might make me rather unpopular in this House today. First, I declare an interest: I run a large public company, TalkTalk. We do not in TalkTalk use any zero-hours contracts today, but I have worked for a number of organisations which do, one of which is very much in my thoughts today—Cheltenham racecourse, where I imagine some noble Lords are today. Many people in the entertainment industry will work on zero-hours contracts.
The noble Baroness, Lady Hollis, spoke powerfully and emotively about the evils of zero-hours contracts, and I am sure that there are individual instances that would deeply shock us all in all forms of employment across this country, but I want to put some facts into the debate. The CIPD did a study in 2013, asking people on zero-hours contracts whether they enjoyed their job and whether they felt they were being well treated. The results were quite interesting, compared to the comments we have heard in the debate so far. Those on zero-hours contracts were just as satisfied as people in more standard contracts—60% said they were satisfied, versus 59% in more standard contracts. They said that they had a better quality of work-life balance—65% versus 58%. They believed that they were less likely to be unfairly treated by their employer—27% playing 29%. So we have to be careful not to make assumptions about people who are making choices to lead flexible working lives in a way that we might not. Those are the facts, as opposed to my personal opinions.
Thames Garden Bridge
Lord Lloyd of Berwick Excerpts(10 years, 10 months ago)
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Lord Lloyd of Berwick
To ask Her Majesty’s Government what considerations led them to provide a £30 million contribution towards the cost of the Garden Bridge across the Thames.
Lord Lloyd of Berwick (CB)
My Lords, I beg leave to ask the Question standing in my name on the Order Paper and declare an interest as a resident of the Inner Temple.
The Commercial Secretary to the Treasury (Lord Deighton) (Con)
My Lords, the Treasury will provide £30 million to support the Garden Bridge. This recognises the benefit that the new transport connections will bring to the UK by stimulating development on both sides of the river while reinforcing London’s position as a global visitor destination and creative hub. However, the support will be provided only once the Government have received a business case produced in line with standard guidance to demonstrate that the investment represents value for money for the taxpayer.
Lord Lloyd of Berwick
My Lords, I am grateful for that Answer and would ask simply three supplementary questions—
Lord Lloyd of Berwick
—of which I have given prior notice to the noble Lord, so he will not be taken by surprise. First, does he agree that there is no real need for another crossing on this part of the Thames, seeing that there are already two pedestrian bridges within half a mile of the proposed bridge, on either side, not to mention Waterloo Bridge and Blackfriars Bridge? Secondly, supposing that there is a need for another crossing, why not have a simple bridge, such as the Millennium Bridge between St Paul’s and Tate Modern, at a fraction of the £150 million cost? Why waste £30 million of public money on creating the so-called Garden Bridge? Thirdly—
Lord Lloyd of Berwick
—is the noble Lord aware that there are gardens all along the Embankment, from the Inner Temple garden to Westminster, where trees are growing perfectly well? Why try to plant trees on a bridge, where they will be exposed to all the elements, will be a hazard to river craft once they are fully grown and will, in my view at any rate, look completely ridiculous?
Lord Deighton
In keeping with the spirit of the House, I will try to give one answer to those three important questions. The key to the Garden Bridge is that it will be two things for the price of one; it will be a garden and a bridge, and will combine the benefits of both.
Consumer Insurance (Disclosure and Representations) Bill [HL]
Lord Lloyd of Berwick Excerpts(12 years, 11 months ago)
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Lord Lloyd of Berwick
My Lords, I am very glad to hear that the noble Lord, Lord Eatwell, is not objecting to the amendment. Whether it is something new or exactly the same in a different form does not matter so much, but I am glad that the amendment proposed will not be opposed by the noble Lord.
While on my feet, perhaps I could say a word about the Law Commission and the part that it has played in bringing us to this point. The report was originally published in 2009. It followed three years of intensive research and a great deal of evidence-taking, as one can see from the report. The commission then succeeded in reconciling the many divergent interests and produced, as a result, a draft Bill, which is the Bill before us with only a few alterations. It is unquestionably the most important reform of the law of insurance since the Marine Insurance Act 1906. The draftsman of that Act was Sir Alfred Chalmers, who is always referred to in this part of the law as the “legendary Chalmers” because he was a brilliant draftsman. It seems to me that this Bill is a worthy successor to the Chalmers Act of 1906. We owe a great debt of gratitude to the Law Commission and, in particular, to David Hertzell, who was in charge of the report. I hope that we may have many more Bills from that stable and I gather that there is already one in the offing, but as it relates to some rather obscure matters of trust law I assume that we shall not have the pleasure of the noble Lord, Lord Sassoon, taking it through the House.
Lord Goodhart
My Lords, I would like to mention one matter as the noble Lord, Lord Eatwell, has referred to the amendments that I put forward in Committee. As I said then, there was basically a pedantic reason for what I did. I thought what I did was slightly better but, quite frankly, it was not a serious problem at all. As they were not automatically accepted in Committee, there is no point in raising the matter again now. I am quite happy that it no longer appears.
Consumer Insurance (Disclosure and Representations) Bill [HL]
Lord Lloyd of Berwick Excerpts(13 years, 5 months ago)
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Lord Sassoon
My Lords, a Second Reading Committee considered the Bill in the Moses Room on Monday 13 June, and I therefore beg to move this Motion formally.
Lord Lloyd of Berwick
My Lords, I regret very much having missed the Second Reading debate on Monday—somehow it escaped my notice. It was a most interesting debate and I should like to have taken part. All I will say now is that this Bill was very well chosen for the new Law Commission Bill procedure and I hope that there are others like it in the pipeline. I support the Motion.
Terrorist Asset-Freezing etc. Bill [HL]
Lord Lloyd of Berwick Excerpts(14 years ago)
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Lord Lloyd of Berwick
“( ) For the avoidance of doubt, “person” in subsection (1)(a)(i) means–
(a) United Kingdom nationals as defined in section 33(2);(b) A body incorporated or constituted under the law of any part of the United Kingdom;(c) Persons or entities within the territorial jurisdiction of the United Kingdom.”
Lord Lloyd of Berwick
My Lords, the purpose of Amendment 1 is to clear up an ambiguity that emerged only during Report on the Bill. The amendment thus falls within the type of amendment that is normally allowed on Third Reading.
The question is whether Clause 2, which gives Treasury Ministers the power to designate a person and freeze his assets, has extra-territorial effect. On Report, the noble Lord, Lord Sassoon, argued that Clause 2 has such effect; indeed, that was a crucial step in his argument generally, as it was in the argument of the noble Lord, Lord Bach. The noble and learned Lord, Lord Wallace of Tankerness, made the same point in Committee when he told us that the Treasury had designated many individuals outside the jurisdiction in the past. I do not know whether they were British subjects, but the fact that something has happened does not necessarily mean that it was lawful. My argument was that Clause 2 does not have extra-territorial effect, so “person” in Clause 2 means a British subject or foreigners within the territorial jurisdiction. Whether I am right or wrong about that, I had hoped that we could have cleared up the point before the Bill went to the Commons. I had hoped the Treasury might table an amendment to say what its understanding of Clause 2 is. After a longish discussion on Friday morning, the Treasury failed to do that so I felt obliged to table this amendment late on Friday afternoon.
What does “person” in Clause 2 mean? The noble Lord argues that it includes foreigners outside the jurisdiction. Of course, Parliament can legislate to cover foreigners outside the jurisdiction; there is no question about that. However, the presumption is that Parliament does not intend to do so unless very clear words are used. That presumption has been around for a very long time, as I hope to show. It is stated in section 130 of Bennion’s Statutory Interpretation. The presumption has also been applied in so many cases that it is difficult to know which to pick, so let me choose one case—about the meaning of the word “debtor” in the Bankruptcy Act of 1869—that I think illustrates the point.
The case concerns two Chilean subjects who carried on business in Liverpool. They had assets here within the jurisdiction and they incurred debts within the jurisdiction but they were not resident here. An English creditor wished to start bankruptcy proceedings against the Chileans. It was argued that the general word “debtor” in the 1869 Act should be given a wide meaning so that it included debtors all over the world, just as it has been argued that “person” in Clause 2 covers persons everywhere. That argument was, however, decisively rejected by the Court of Appeal. It was held that “debtor” covered only British nationals or foreigners within the jurisdiction, which of course the Chileans were not. That case—I refer to ex parte Blain, decided in 1879, volume 12, Chancery Division, at page 522—has been followed on innumerable occasions ever since. There is no doubt that the presumption to which I refer exists and is applied as a matter of course.
What is the reason for the presumption? The answer was given by Lord Justice James in the same case when he said that it rests on the broad general principle of comity, the comity which should exist between independent states. Applying that to the facts here, I ask whether, if the French authorities were to designate a British subject resident in England and freeze his assets because they believed him to be a terrorist, we would regard that as a friendly act. Clearly, we would not. The same must also apply the other way round. If the noble Lord, Lord Sassoon, is right and Clause 2 has the extra-territorial effect that he suggests, the Treasury could designate a French subject, freeze his assets here in London and require him to come to London in order to appeal against the designation under Clause 26. If a Treasury Minister did that, how would it play in France? It may be argued that in the real world we would never dream of designating a French subject. That might be right—I hope it is—but it is the power to designate contained in Clause 2, if the noble Lord’s construction is right, that is repugnant to comity. There is no doubt that the presumption exists and it is based on a sound principle of international law.
Lord Wallace of Tankerness
My Lords, I am grateful to the noble and learned Lord, Lord Lloyd of Berwick, for introducing this debate. I am also grateful to other noble Lords for their contributions. I am particularly grateful to the noble Lord, Lord Davies, and my noble friend Lady Hamwee for indicating that, subject to what I may say, they are generally satisfied with the position which the Government have adopted.
This amendment goes back to the debate we had on Report about the scope of Clause 2 and whether it should allow the Treasury to designate non-UK persons who are outside the United Kingdom. We are grateful to the noble and learned Lord for having written to my noble friend Lord Sassoon, following our debate on Report, to explain his concerns with the clause as drafted, and for having taken the opportunity to discuss the matter in some detail with officials before he tabled his amendment. I readily recognise that this amendment stems from the noble and learned Lord’s very strong belief, which he clearly expressed in moving his amendment, that it is the right and responsibility of each country to make laws that affect their nationals and those within their jurisdiction. Generally, we would not dissent from this principle but, if the House will permit me, I will explain why we cannot accept the noble and learned Lord’s amendment.
The noble and learned Lord referred to United Nations Security Council Resolution 1373, which requires that states shall,
“Prohibit their nationals or any persons … within their territories from making any funds, financial assets or economic resources or financial or other related services available, directly or indirectly, for the benefit of persons who commit or attempt to commit or facilitate or participate in the commission of terrorist acts”.
I think it is clear that a key aim of Resolution 1373 is to prevent acts of terrorism anywhere in the world. To that end, the definition of terrorism in this Bill is borrowed from the Terrorism Act 2000 and is used in other legislation. The definition makes it clear that terrorist activity anywhere in the world against persons or Governments falls within the scope of the legislation.
It is also clear that Resolution 1373 puts an obligation to prevent terrorist finance not only on the state where particular terrorists and terrorist groups reside but on the states from which the funding of those terrorists may originate. If, for example, a foreign terrorist holds assets within the United Kingdom or relies on funding coming from the United Kingdom, it is not only right but essential that the United Kingdom should be able to freeze those assets and prevent funds being transferred for terrorist purposes. That is what the language of United Nations Security Council Resolution 1373, which I have just quoted, clearly requires.
Relying purely on the country where the terrorist resides to take action has two fundamental drawbacks. First, that country cannot control funds or other assets that may be available for use overseas by the terrorist. This is why the Security Council resolution is worded as it is. Secondly, we know, as was acknowledged in our short debate, that terrorists are often based in countries where the authorities cannot or will not take action: for example, in failed states or in states where the authorities turn a blind eye to terrorism.
Clause 2 therefore provides the Treasury with a power to identify those whom we consider to be terrorists, based on activities that could take place anywhere in the world. The effect of the designation is twofold. First, any funds and economic resources within the United Kingdom of such persons are required to be frozen. It will be a criminal offence for anyone in the United Kingdom to deal with such assets without licence from the Treasury.
Secondly, persons in the United Kingdom will be prevented from providing any funds or economic resources to designated persons. I shall try to make it clear; the fact that some persons designated by the Treasury are ordinarily not in the United Kingdom does not give extra-territorial effect to the provisions. The effect of listing such a person is to freeze only their United Kingdom assets and prevent persons within the United Kingdom or United Kingdom citizens abroad assisting them. It has no further effect.
The noble and learned Lord, Lord Lloyd, asked what would happen if we were to designate a terrorist who was in France. He suggested that it might lead to a breakdown of international comity. That we are taking these measures in pursuance of a United Nations Security Council resolution indicates where the balance of international comity may lie; it is in United Nations member states taking the resolution and implementing it. We have not so far designated a French national. However, if we were to do so, I would certainly expect close co-operation between United Kingdom and French authorities in such a matter. The French might indicate to the United Kingdom that a French national was a terrorist of concern to them, whose assets they wanted to freeze. Working with French counterparts, the United Kingdom’s law enforcement agencies would identify whether that suspected terrorist held assets in the United Kingdom that the French Government then wished to be frozen. The French would provide United Kingdom authorities with the relevant evidence to support a UK designation, showing that there was at least a reasonable suspicion that person X was involved in terrorism and that a UK asset freeze was necessary for protecting the public from the risk of terrorism.
Finally, a Treasury Minister will consider the case and, if the legal test that is set out in this Bill is met, will designate person X, with the Treasury taking the necessary steps to inform the financial sector and to freeze person X’s assets within the United Kingdom. We accept that other countries may use domestic asset-freezing powers to designate United Kingdom nationals, but again we would expect this to be done in co-operation with United Kingdom authorities.
The power in Clause 2 relates to designated persons, including non-UK nationals; it is not a radical departure. Sanctions legislation is by its very nature often targeted at persons outwith the United Kingdom, but the prohibitions bite only on those in the United Kingdom or when United Kingdom nationals are elsewhere. An example is the prescription regime under the Terrorism Act 2000 and this legislation. There is a list of prescribed groups, almost all of which operate outside the United Kingdom, but the effect of proscription is to prohibit persons in the United Kingdom from membership of such groups or from providing material support to such groups. As with our Bill and sanctions legislation generally, the target is outwith the United Kingdom but the prohibitions apply solely in relation to persons in the United Kingdom or UK citizens operating abroad. That accords with the fundamental jurisdictional principle that the country should normally legislate to criminalise only acts committed within its territory or by its citizens abroad. Here the acts that are being criminalised are the provision of finance for the purposes of terrorism.
I understand the noble and learned Lord to be concerned about interfering with the sovereignty of other states. I hope that he can see from an indication of how we might act in the event of getting intelligence or representations from France that this measure would not offend another state but would promote co-operation. At the risk of repeating myself, the effect of a designation is to freeze only those assets of a designated foreign national that are within the United Kingdom, and we believe that that is the sensible way in which to proceed.
Clause 1(b) refers to persons listed in Council Regulation 2580/2001. This regulation is the means by which the European Union implements Resolution 1373; it does so by requiring member states to identify persons against whom the state has taken action, for example by way of a domestic asset freeze. Persons put forward and included on the list are then subject to financial sanctions throughout the EU. The reference to “persons” here cannot be confined to those within the UK and the same term cannot have different meanings in the same clause. The EU regime emphasises, I think, the essential territoriality of an individual member state’s actions, and the need for each member state to take action against assets in their country and to prevent those in the country from providing material support to terrorists.
The noble and learned Lord referred to Clause 33, which provides for cases in which UK nationals and UK incorporated bodies commit an offence outside the UK. This is not an unusual extension of the application of a statute, and I do not think—nor did he suggest—that it is in any way controversial. The purpose is straightforward—to prohibit UK nationals and companies from committing acts abroad that would be offences under the Bill if committed here.
The noble Lord, Lord Pannick, asked whether we should be able to designate overseas persons only if they hold assets in the United Kingdom. I have answered that. The asset-freezing regime not only freezes assets but prevents persons in the United Kingdom making payments to a designated person. That is why we need to be able to designate overseas persons, even if they do not hold funds in the UK, so that we can prevent people in the United Kingdom or UK persons overseas providing designated persons with funds.
In summary, we believe that Clause 2 does not limit the Treasury to designating only persons who are in the UK, and nor should it. While we have listened carefully to the noble Lord’s arguments today, on Report and in the exchanges that he has had with my noble friend, we are satisfied that the wording of Clause 2 as it stands is sufficiently clear in this regard. It does not make the provision extra-territorial. Clause 2 merely identifies those persons involved in terrorism whose assets persons in the UK cannot deal with and whom persons in the UK cannot assist by providing funds or economic resources.
For this reason, the Government cannot support the amendment, and I urge the noble and learned Lord to withdraw it.
Lord Lloyd of Berwick
My Lords, I am extremely grateful for that full response. The problem remains, I fear, the meaning of the word “person” in Clause 2. Somehow underlying the Minister’s reply is the idea that a Treasury Minister has a power to designate assets, but of course the power can designate only persons. The Minister dealt with that clearly in relation to the example of us suspecting a French terrorist; indeed, he gave the same answer as I did. The way that it is meant to work is as follows: if we suspect someone in France of being a terrorist, we approach the French authorities and ask them in the spirit of co-operation—as the Minister rightly says, that underlies all this—to look at this, and the French will agree. If they come back and say, “Yes, we think you’re right”, they will designate the terrorist in France. There is nothing wrong with that. That is what Regulation 1373 envisages. What it does not envisage is us, without consulting the French, simply designating a Frenchman resident in France. All the cases show that a general word such as “person” in this clause, whatever may have been the Government’s intention, does not mean—I respectfully suggest—what they think that it means.
I will look closely at what the Minister has said and, more important, I hope that others will look closely at what the Minister has said and what I have said. I hope that in due course they will reach what I believe to be the correct result, which would require only a small amendment to Clause 2. That having been said, I beg leave to withdraw the amendment.
Terrorist Asset-Freezing etc. Bill [HL]
Lord Lloyd of Berwick Excerpts(14 years ago)
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Lord Lloyd of Berwick
Lord Lloyd of Berwick
My Lords, I intend to address the amendments that relate to the final order, and I therefore wish to degroup the amendments that relate to the intermediate order.
It seems that the Bill has attracted little public attention, except from our own Constitution Committee, which was very critical of the Bill, and from bodies such as Liberty and Justice, which are even more critical. Liberty and Justice state in their briefing paper that they have four major concerns. The purpose of my amendments is to meet at least some of those concerns.
The purpose of the Bill is to give effect to Security Council Resolution 1373, following the decision of the Supreme Court in the case of Ahmed, which quashed the orders made by the Treasury. The Bill was first drafted by the previous Administration, but that does not matter, because the starting point of its drafting should surely have been the decision of the Supreme Court in the Ahmed case and the light that it throws on the meaning and effect of Resolution 1373.
Reading the Bill in July, my immediate impression was that Ahmed had been very largely ignored. The Bill simply puts on a statutory basis, as was required, the provisions of the Terrorism Order 2006, but ignores the very serious criticisms that the Supreme Court made of the order. To make that good in Committee, I referred to a paragraph in the judgment of the president of the Supreme Court, the noble and learned Lord, Lord Phillips. Afterwards, I wrote to the noble Lord, Lord Sassoon, to explain the difficulties that I had with the Bill, and he was courteous enough to reply. I make no apology for repeating the words of the noble and learned Lord, Lord Phillips, because they are central to what is wrong with the Bill. Having referred to paragraph 1(c) of the critical resolution, he continued:
“Paragraph 1(c) requires the freezing of the assets of those who commit the acts that the Resolution has required should be criminalised and their agents. Thus what the resolution requires is the freezing of the assets of criminals. The natural way of giving effect to this requirement would be by freezing the assets of those convicted of or charged with the offences in question. This would permit the freezing of assets pending trial on criminal charge, but would make the long term freezing of assets dependent upon conviction of the relevant criminal offence to the criminal standard of proof”.
I emphasise those words and the sentence that follows:
“The Resolution nowhere requires, expressly or by implication, the freezing of the assets of those who are merely suspected of the criminal offences in question”.
I turn now to what the noble Lord, Lord Sassoon, said in the debate in Committee on 6 October. He said:
“The Government do not support moving to a higher legal threshold than reasonable belief, for example by imposing asset freezing only on those who have been convicted of a terrorist offence. Such a move would undermine the preventive nature of the regime”.
I will come back to that. The noble Lord said that such a move would also,
“be incompatible with international best practice and the aims of the United Nations Security Council resolution”.—[Official Report, 6/10/10; col. 122.]
With great respect, that is simply not correct. To make the commission of a terrorist offence the threshold of a freezing order could not be incompatible with the aims of the resolution, since, as I have just read out, that is what paragraph 1(c) specifically requires. States are required to freeze without delay the assets of persons who commit or attempt to commit terrorist acts—nothing less, nothing more. There is no mention anywhere in the resolution of those suspected of committing terrorist acts.
If it is then said that in the passage that I have read the noble and learned Lord, Lord Phillips, was, as it were, on a frolic of his own, then what about the noble and learned Lord, Lord Mance, at page 451 of the judgment? At paragraph 225, he said:
“The relevant wording of Security Council Resolution 1373 … is directed at the prevention and suppression and the criminalisation and prosecution of actual terrorist acts; at the freezing of funds or other financial assets or economic resources of persons ‘who commit”—
again, the same words—
“or attempt to commit, terrorist acts or participate in or facilitate the commission of terrorist acts’”.
A little later, he went on to say that the wording of paragraph 1(c),
“does not suggest that the Security Council had in mind ‘reasonable suspicion’ as a sufficient basis for an indefinite freeze”—
what we here call a final order. I would add that nor is there any suggestion that the Security Council had in mind “reasonable belief”, as opposed to “reasonable suspicion”.
At paragraph 197 of the judgment, the noble and learned Lord said that reasonable suspicion,
“goes well beyond the strict requirements of Resolution 1373”.
The noble and learned Lord, Lord Brown, said exactly the same at page 196. I need not refer to his language because it replicates that of the noble and learned Lords, Lord Mance and Lord Phillips.
The only justice to have expressed a contrary view was the noble and learned Lord, Lord Rodger, at paragraph 170, but none of the other six judges agreed with him. Therefore, in my submission there is no doubt at all about what the Supreme Court decided. That is put very well in the rather lengthy head note, of which I should perhaps refer to a very small part. It said that the appeals would be allowed because Resolution 1373 was not phrased in terms of reasonable suspicion, so by introducing such a test the terrorism order went beyond what was necessary or expedient to comply with the relevant requirements of the resolution and that accordingly the terrorism order was ultra vires the powers conferred. Therefore, again, there is no doubt about what the court decided. However, when this Bill was being drafted, those responsible for the drafting must have read the speech of the noble and learned Lord, Lord Rodger, but overlooked the speeches of the three noble and learned Lords to whom I have referred and what, on any view, was the actual decision of the court. I hope that, when he comes to reply to this amendment, the noble Lord, Lord Sassoon, will accept that my amendments are not in any way incompatible with Resolution 1373—indeed, quite the opposite. They give meaning and effect to the resolution in precisely the way that the Supreme Court indicated.
As a result of the Second Reading debate, and in particular the speech of my noble friend Lord Pannick, the Government now accept that “reasonable suspicion” is not good enough and instead they have substituted “reasonable belief”. The noble Lord, Lord Rodger, said that it is very difficult to say how much difference there actually is in practice between those two. I think he describes suspicion as being “only a little less stringent than belief”, or words to that effect. Whatever the precise difference between those two, surely it is clear that exactly the same argument, which has led the Government to accept that suspicion is not good enough, must also apply to what they have now substituted; namely, belief.
It is true that belief will catch fewer innocent people than suspicion, which I assume to be the reason for the change, but I doubt whether it will make much difference. The point remains the same: that belief, like suspicion, casts the net too wide; it is far wider than the resolution requires, so that more innocent people will inevitably be caught. That is why it is so important to keep to the words of the resolution and not to change the essential nature and target of the resolution. I put it to your Lordships that that means the final order must be confined to those who have been arrested and charged with a terrorist offence and that is what will be achieved by my amendments, if they are accepted. I beg to move.
Lord Bach
My Lords, to my surprise, I shall be speaking early in these proceedings but I enter the fray at a rather late stage of the Bill because my noble and learned friend Lord Davidson of Glen Cova cannot be here today. However, on this Bill I am not to be allowed gently to put my toe in the water. The House is dealing with important amendments tabled by the noble and learned Lord, Lord Lloyd of Berwick, to whom I want to pay tribute. He has a deserved reputation for knowledge and expertise, particularly in this area, going back many years. I have also had the experience of debating with the noble and learned Lord on a number of occasions when sitting on the other side of the Chamber. Although he is always a model of courtesy, good manners and, of course, persuasion, I have no doubt that those who have succeeded me will find his arguments as difficult to deal with as I did. However, I say with the greatest respect, that does not always mean he is right.
Today, we on this side believe that the noble and learned Lord is wrong in limiting final determinations only to those cases where a person has been charged with a criminal offence under Clause 2(2). Why do we think that? In essence, we think that such a step would be impractical and would not work in the real world. Reading through the Committee stage debates, I was impressed by the arguments employed by the noble and learned Lord, Lord Wallace of Tankerness, in dealing with this issue. It seems to us that his arguments are powerful. On 6 October, he said:
“Unlike control orders, asset freezing is not only used against people in the United Kingdom who cannot be prosecuted or deported. In fact, only around 10 per cent of asset-freezing cases involve people who are in the UK or hold funds here and are not being prosecuted for terrorist offences”.
The noble and learned Lord went on to say:
“The noble and learned Lord, Lord Lloyd of Berwick, indicated that he thought that those who were subject to designation should also be prosecuted. I asked how many people who have been subject to asset freezes have been prosecuted”.—[Official Report, 6/10/10; col. 150.]
He was advised that 21 individuals in the UK had been convicted for terrorism offences, and that six people within the UK have not been prosecuted. He went on to say that he had asked his officials how many persons outside the UK had been subject to designation for asset freezing, and that the answer was 36, of which 22 were entities and 14 were individuals. He said that it would just not be possible to prosecute them. That is, in essence, what the noble and learned Lord said at the Committee stage of these proceedings.
The trouble is that if one had to charge before making a final designation order, many of those whose assets one would want to make an order against might not be in the jurisdiction, might not be likely to be in this jurisdiction, or might have skipped the jurisdiction as fast as they possibly could. Why should they escape the making of a valuable order if it would assist in the fight against terrorism? That is why we think that in the real world, where a considerable number of the people who one would want to make an asset order against are abroad and not within the jurisdiction, there should be power to make such an order, because if there were not, there would be a serious lacuna in the law.
Lord Lloyd of Berwick
My Lords, before the noble Lord sits down, I hope that he will deal with that point a little more fully as it is quite important. Is he arguing that Clause 1 has extraterritorial effect? If so, that is not stated in the Bill. Indeed, the Bill specifically provides that the offences provision in Chapter 2 is to have extraterritorial effect, but there is nothing in the Bill to suggest that we can serve persons abroad. It applies only to our own nationals and to people within this country in the ordinary way.
Lord Bach
I have to admit that I do not know the answer to the noble and learned Lord’s question. However, I am concerned about the position of a UK citizen who goes abroad and who therefore cannot be interviewed and perhaps afterwards charged with an offence, and who because of that fact cannot have an order made against his assets. As I understand it, having read the letter from the noble Lord, Lord Sassoon, in response to the Joint Committee on Human Rights, that actually happens in real life.
Lord Lloyd of Berwick
I will not take up the noble Lord’s time further, but I shall obviously need to deal with that matter with the Minister who no doubt has given consideration to this important point.
Lord Elystan-Morgan
My Lords, I support the arguments and the amendment tabled by my noble and learned friend Lord Lloyd—not that he needs my feeble assistance in this matter. It seems to me that there are two flaws in the provision before us. Those flaws still remain, even with the amendment suggested by the Government.
The first stage might be called the “trigger” stage: the point at which the authorities have some jurisdiction in this matter. In the original Bill, it was at a point when there was reasonable suspicion, but in the amendment it is when there is reasonable belief. As the noble and learned Lord, Lord Lloyd, has said, those are two separate categories, but they are very close to each other.
Perhaps I may trouble the House a moment or two with this illustration. Let us think of Section 22 of the Theft Act and the provision dealing with the receiving of stolen goods knowing or believing them to be stolen. A judge will tell the jury very simply that even if the defendant is shown to be in possession of suspicion, that counts for nothing at all: there has to be actual knowledge or belief. But the same judge will normally say to the jury that of course there is a point where suspicion becomes so strong and convincing as to amount virtually to belief. I make that point as an illustration of the fact that the two estates practically merge at that point. That flaw remains even if the amendment were to be carried.
The other point is what might be called the boundary point. There are two stages: first, that you trigger the mechanism by way of a belief; secondly, that it must be belief as to some state of affairs. That, it seems to me, can be one of two things. It can either be a belief that a criminal act is in the course of being committed or has been committed; or that there is involvement within the accepted degrees of criminality in that act relevant to the provision. If one is concentrating on what is or is not a criminal act, that is a fairly simple matter to decide. Is the person you suspect or believe to be involved a person who would be a principal in the first or second degree, an aider and an abetter, et cetera, or is he beyond that pale?
If you draw the line at the point of criminality, it is perfectly simple, because you have a defined boundary. You can say, “That is the ne plus ultra of the law's authority in this matter”. If you extend that pale, where are you? Where is the boundary? I remember the very strong argument of the noble Lord, Lord Carlile of Berriew, some weeks ago in this matter. There may very well be a case for extending the boundary beyond that of actual criminality, but there has to be a boundary. That is my point about Clause 2. If you leave the boundary of actual criminality and assume any other boundary, with the greatest respect, you have to define it very closely.
The Commercial Secretary to the Treasury (Lord Sassoon)
My Lords, if noble Lords will permit me, I will speak to this entire group of amendments, although there has not been any significant discussion on some of them. It is perhaps worth summarising what these amendments would do. They would limit final designations to those charged with a terrorist offence of a description within Clause 2(2). They would require any final designation to cease if the charges are dropped or the person is acquitted and require the Treasury to apply to the court to make an interim designation.
Amendments 1 and 3 relate to the Treasury’s power to make a final designation. They require the Treasury to make final designations against only those people who have been charged with a criminal offence falling within the description of terrorist activity in Clause 2(2) for the purposes of the Bill.
Amendments 4, 5 and 6 require a final designation automatically to expire when a person charged is acquitted or charges are dropped before the ordinary one-year expiry. This goes to the heart of what this regime is intended to be about. Although I echo the words of the noble Lord, Lord Bach, in recognising the contribution of the noble and learned Lord, Lord Lloyd of Berwick, and the great wisdom he brings to this, I think he does not go to the complete heart of the rationale of UNSCR 1373, which is indeed preventive. It requires states to take steps to prevent terrorist acts. I should quote further from the resolution. Its paragraph 1(c) states that one of the means of achieving this requires states to:
“Freeze without delay funds and other financial assets or economic resources of persons who commit, or attempt to commit, terrorist acts or participate in or facilitate the commission of terrorist acts”.
The rationale of paragraph 1(c) is to prevent funds, financial assets and other economic resources being used or diverted for terrorist purposes, and the Government absolutely believe that it would not accord with the preventive rationale of the UN resolution if a final designation could be made only in respect of those charged or convicted of terrorism-related offences.
If that were the threshold, the Treasury would not be able to freeze the assets of those in respect of whom there was evidence that was insufficient to bring such a charge, but sufficient to give rise to a reasonable belief on the Treasury’s part that the person represented a terrorist risk—for example, where an interim designation has been made in respect of a person on the basis of a reasonable suspicion and insufficient evidence has come to light during the 30-day period of that interim freeze that would allow charges to be brought, but the Treasury has nevertheless come to a reasonable belief that the person is or has been involved in terrorism and considers it necessary for public protection that the final designation be made. If the Treasury were not able to make a final designation in those circumstances, that would give rise to a risk of terrorism that the requirements of the UN resolution are meant to prevent.
I remind the House that in making these designations, it is necessary that the dual test is met. The other half of the test, which has not been mentioned this afternoon, is a public protection leg. It is the Government’s continued firm belief that a reasonable belief threshold for a final designation would allow the Government to implement effectively the requirements of the resolution.
Lord Lloyd of Berwick
Does the noble Lord accept that reasonable belief goes beyond what Resolution 1373 requires? That is the critical question. It is also the question, which, as I have explained, has been decided by the Supreme Court.
Lord Sassoon
My Lords, the interpretation of UNSCR 1373 can be construed partly on a recommendation of the resolution itself and partly on the interpretation which the Financial Action Task Force has made. It is clear from its guidance that asset freezes should not be limited only to cases where people have been charged or convicted. If we were to accept this amendment, which the Government do not intend to do, it would certainly put the UK outside what is considered by all leading countries through the FATF guidance to be best practice in implementing Resolution 1373. What we are proposing is consistent with the approach taken by other authorities, such as in Canada and New Zealand, of which the noble and learned Lord, Lord Brown, approved in the case of Ahmed.
I agree with the interpretation of the noble Lord, Lord Bach, of the situation. Asset freezing is implemented against individuals and groups in the UK and overseas. At the moment, 22 entities and 14 individuals overseas are the subject of asset freezing. Nothing in Clause 1 limits this. Asset freezing certainly is not limited to people in the UK. People anywhere in the world can be designated, but the prohibitions apply only within UK jurisdictions; that is, to assets that are either held in the UK or by UK persons such as banks overseas. I hope that that clarifies the question of territorial scope.
Lord Lloyd of Berwick
Is the Minister saying, in effect, that Clause 1 has extra-territorial effect? If so, what is his authority for saying that in the light of the fact that the Bill makes specific provision for extra-territorial effect for offences under Clause 11 but no such provision in relation to Clause 1?
Lord Sassoon
Under Clause 1, people anywhere in the world can be designated. To repeat myself again, the prohibitions, on the other hand, apply only within UK jurisdictions; that is, to assets either held in the UK or held by UK persons such as banks overseas. That is about as clear as I can be on the Government’s understanding of the scope of Clause 1. The people overseas who are subject to asset freezes are operating in environments where it is not possible to charge or to convict them clearly of terrorist offences, but where it is necessary in order to disrupt their actual or potential—
Lord Sassoon
My Lords, I am grateful to the noble Lord, Lord Davies of Oldham. I hope that the majority of us are clear about the intended scope of Clause 1, so I shall move on to deal with some of the other aspects. However, it is quite clear that the scope of Clause 1 is as intended and required by our obligations under UN Resolution 1373, which is the relevant resolution.
It is worth noting that while the majority of asset-freezing cases in the UK are against those who are charged or convicted of terrorist offences, at the moment there are six cases where it has been necessary, in order to protect the public from terrorism, to act upon the intelligence picture which, for reasons of national security or admissibility of evidence, cannot be used as the basis for criminal charges. However, that does not, of course, mean that those people do not continue to pose a serious risk to national security. Therefore, to limit final designations only to those subject to a criminal charge would exclude such groups and individuals as I have described. This would fatally undermine the preventive and disruptive nature of the asset-freezing regime as well as impact significantly on its operational effectiveness.
Nevertheless, the Government recognise that the Bill as it was introduced raised civil liberties concerns, and it was to address those that we amended the Bill so that a higher final designation threshold of reasonable belief, rather than the previous reasonable suspicion threshold, is being introduced. However, again I stress that there is a twin test, as the test of necessity for public protection also needs to be met. I do not think that the noble and learned Lord, Lord Lloyd of Berwick, drew attention to that.
The noble and learned Lord referred to a final order as giving an indefinite freeze. However, it is important to recognise that freezing orders have to be relooked at whenever the evidence changes or after 12 months. While “final order” is the term in the Bill, we should remember that a final order or a final designation will expire after 12 months unless it is renewed. We have also provided that the legal challenge to any designation should be by way of appeal. The Government continue to believe that the Bill strikes the right balance between safeguarding a person’s rights and protecting the public.
Amendments 9 and 11 require the Treasury to apply to the court to make an interim designation.
Lord Lloyd of Berwick
I have not addressed those amendments yet. I believe they have been degrouped and appear in the next group. I specifically asked before I addressed the House that those amendments, which relate to an entirely separate subject matter—namely, the interim order, not the final order—should be degrouped. If the Minister did not hear that, he can answer what I have to say in due course.
Lord Sassoon
My Lords, the last grouping I have seen from the Printed Paper Office suggested that everything was grouped together. Perhaps I should break off here and ask the noble and learned Lord whether he is prepared to withdraw Amendment 1 and not to move Amendments 3 to 6.
Lord Sassoon
I am not aware of anything in the resolution that prevents legislation going further. The Bill does what is required to properly implement Resolution 1373 but, if it did go further, that would not be precluded by the terms of the resolution.
Lord Lloyd of Berwick
My Lords, the Minister has not fully dealt with the point that what is now proposed goes well beyond what is required by Resolution 1373. He argued that that resolution was intended to be preventive and that what is now proposed is preventive. The resolution states, in paragraph 1(a), that it is intended to be preventive, but it then goes on to say how it is to be preventive by requiring all member countries affected by the resolution to pass legislation to freeze the assets of those who have been charged or convicted of a terrorist offence. That is clear from the language of the resolution. Simply to say that the resolution is intended to be preventive and that the Bill is preventive is not an answer to that point.
The only real answer that has been given was that given by the noble Lord, Lord Bach, when he repeated what was said by the noble and learned Lord, Lord Wallace of Tankerness, in Committee. In particular, he said:
“I also asked how many persons outwith the UK have been subject to designation for asset freezing; the answer is 36, of which 22 are entities and 14 are individuals”.—[Official Report, 6/10/10; col. 150.]
How can that be so under the terrorist orders unless they were intended to be extra-territorial?
That brings us back to the question whether Clause 1 is extra-territorial. The fact that something has happened is by no means proof that it was justified, as indeed is the case with the whole history of this part of the law, which has had to be corrected by the Supreme Court in its most recent decision. Those figures do not convince me at all. We return to the question whether Clause 1 on this particular point is intended to be extra-territorial. It is clear to my mind that it is not, for the reasons that I have already given—namely, that other provisions in this Bill are said to be extra-territorial and this is not included among those provisions. That merely confirms the ordinary rule that we apply all the time that legislation is not extra-territorial unless it is stated to be so.
There is a further question relating to the figures given by the noble and learned Lord, Lord Wallace of Tankerness. If those persons were outside the jurisdiction, how were they notified? Under Clause 3, it is the obligation of the Treasury to notify a person immediately when the final order or an interim order is made. How can we be sure that that is being done when the person is outside the jurisdiction, wherever he may be? The argument that my amendment would in some way cut down a valuable power that the Treasury now has and would not have if my amendment were passed is simply not, with respect, borne out. I am not willing to withdraw the amendment and will take the opinion of the House.
Lord Lloyd of Berwick
Lord Lloyd of Berwick
My Lords, the purpose of the amendment is to provide for a High Court judge to make the interim designation, not a Treasury Minister. The Minister makes the application for an order, but it is the judge who should make the order. That is the normal course of events when a person’s assets are being frozen, for whatever reason, and it is right, given that the freezing of a person’s assets has all the dire consequences described by the Supreme Court in the case of Ahmed. What is proposed makes the defendant, in effect, a prisoner of the state, as Lord Justice Sedley said in the Court of Appeal and as was repeated in the Supreme Court.
It is normal for asset-freezing orders to be made by judges. That has been the case since long before Resolution 1373. It was the judges, after all, who invented the Mareva injunction in the middle of the 19th century. I may have meant the 20th century—perhaps I was a century out. Such injunctions enabled a plaintiff with a good arguable case to go before the judge and obtain an order or injunction freezing the defendant’s assets, if it seemed likely that those assets would be dissipated before any judgment against him. This happened often—I have granted many such freezing orders—and the system worked. The defendant, for obvious reasons, was not given notice of the application before it was made, otherwise it might have proved fruitless—he would have dissipated the assets before the order was made. When the order was made, he could come before the judge and seek to have the order set aside or varied. That is a well established system, as any judge or lawyer in the House would know. I cannot understand why that procedure should not be applied here.
The Minister was pressed at some length in Committee to give reasons why it should not work in that way. He said that in the end it came down to speed and complexity. However, there is nothing in either of those grounds. As soon as the Minister has grounds for suspicion, he can go before a judge the very next day and get his order. That is what happens as a matter of course in the commercial court, so I see no difficulty on the ground of speed. Of course, the Treasury Minister, when he makes his application, will have to have formulated his grounds, but he would have to have done so in any event, since the defendant, as soon as he has notice that he has been designated and that his assets have been frozen, will certainly go straight to the judge on appeal, as he will now be entitled to do. Since he can do that, and since the Treasury Minister will have to explain at that stage—perhaps the very next day—why the order has been made, clearly the Minister will have to have his tackle in order before the application is made. I suggest that there is nothing in the ground that this cannot be done quickly enough in the ordinary way.
The ground of complexity is equally without foundation. It is absurd to suppose that judges in the Administrative Court cannot understand these things. They have to understand them as soon as the defendant who has had his assets frozen goes to the judge, as he can do the very next day, so why can they not be made to understand them before the order is made by the Minister?
If there is no objection on either of those grounds to the order being made in the usual way, what is the real objection? It seems that this is the way in which it has always been done by the Treasury. Another reason is that the decision is more suited to the Executive and, indeed, is the proper function of the Executive. I regret to say that I cannot agree. Indeed, I hope never again to hear it said that a decision that takes away a man’s right to deal with his property as he thinks fit is more suited to the Executive than the judiciary.
In Committee, I asked the noble Lord, Lord Carlile, whether he could think of any other order of this type that affected the liberty of the subject in this way. He could think only of a control order, which hardly provides a trouble-free precedent for what is proposed in this case. Let us assume that the result of the review being carried out by the Home Office is that we get rid of control orders, as I profoundly hope that we shall. How then can we justify continuing the regime that the noble and learned Lord, Lord Brown, described as “scarcely less restrictive” than control orders and which he said could be “even more paralysing”? I repeat what I said in Committee: I am in favour of interim orders being made on the basis of suspicion. To that extent, the Government are right. However, I am wholly against the orders being made by the Executive rather than by a judge in the ordinary way. I beg to move.
Lord Lloyd of Berwick
My Lords, the Minister gave three reasons why he could not accept the amendment, the first of which was that the measures are meant to be preventive. However, they are also rather more than preventive; they are extremely restrictive of the basic right of any individual to deal with his assets as he thinks fit. He also said that we are not concerned here with human rights. Of course we are; we are concerned with Article 1.
Lord Lloyd of Berwick
Did he not say that? He said that he differentiated this measure from control orders on the ground that we are not concerned here with human rights, but we are, albeit a different provision under the Human Rights Act—Article 1 of Protocol 1, which is that a person’s property cannot be interfered with. We are in exactly the same area as control orders, which is why the judges in the Supreme Court have described asset freezing of this kind by Treasury order as being almost as restrictive as control orders themselves. The noble Lord has not dealt with any of those points. I think that the noble and learned Lord would like to intervene.
Lord Mackay of Clashfern
My Lords, I would like to be sure that I understand. The noble and learned Lord’s Amendments 9 and 11 seem to allow the Treasury to make an application for leave to make an order. They do not provide for the Treasury making, nor suggest that the Treasury makes, the order in the end.
Lord Lloyd of Berwick
My Lords, I entirely agree with the noble and learned Lord. That is the normal way in which it is done—let the Treasury make the order, but only with the leave of the judge. I see no reason why that should not flow. It is an even clearer case than that of Mareva injunctions, where it was the judge who made the order. Either way, that is the way in which we should be dealing with this. I am sorry to say that I fear that it is pointless for me to take this any further, so I reluctantly beg leave to withdraw the amendment.