Northern Ireland Protocol Bill

Lord Pannick Excerpts

Committee stage
Monday 31st October 2022 Lords Chamber

But what I would say is that, if you are going to give the Assembly a say on these matters, then respect the Belfast agreement. Why change it? Give it a cross-community vote. What is the problem with that? I humbly say that, when it came to the protocol itself, all of those safeguards were of course jettisoned, and we need therefore to go back to the rationale for this Bill. Whether it is through the Bill or new negotiations, we have got to get to a situation where we have a position which both unionists and nationalists can support in Northern Ireland.

[Lord Pannick (CB)]

My Lords, I am not going to comment on the politics of Northern Ireland—I am a mere lawyer—but the noble Lord, Lord Campbell, raised a particular point on Article 16, and the answer given by the noble Lord, Lord Dodds, as I understood him, was that there were discussions about that, and statements were made at various times by various politicians. But the fact of the matter is that Article 16 is part of the protocol; it cannot be ignored.

What it says is that it provides a procedure for dealing with

“serious economic, societal or environmental difficulties that are liable to persist, or to diversion of trade”.

It is a very broad concept; it provides a means by which such disputes can be resolved and, as I have said before in debates on this Bill, I simply do not understand how the test of “necessity” in international law can be satisfied when the Government have available, and are not using, a provision that is expressly provided in the protocol. You simply cannot resile from an international agreement because of problems when the protocol itself, the international agreement, provides a means of addressing them; it is as simple as that.

There is one other legal point. The noble Lord, Lord Browne, deserves an answer. He rightly emphasised that Articles 1 and 2 of the protocol preserve the Belfast agreement in various respects, upholding and emphasising it. As I understood it, his argument is that the Bill is consistent with international law because the protocol, in his view, undermines the Belfast agreement. However, if I may respectfully say so, there is an insuperable difficulty with that argument: this country signed the protocol on the basis of the view that the protocol was consistent with the Belfast agreement in the context of the difficult problems posed by Brexit.

Having signed the agreement, with respect, it is trite as a matter of international law that the United Kingdom cannot unilaterally resile from the protocol because, under political pressure, it now wishes to take a different view. Therefore, this Bill, as I have suggested before, is quite simply inconsistent with international law.

[Lord Frost (Con)]

My Lords, I appreciate that I am a relative newcomer to this House, but I had understood that in Committee discussion is supposed to focus on the amendments before us. What I have heard today is very much a rerun of the discussion we heard in this place last week, with repeated invocations of issues of principle around this Bill and the protocol, which are extremely important but might not be resolved in this debate simply by repeating the points over and over.

I have been trying to follow the detail of this on my electronic device, with my documents in front of me—I know the technique may not be familiar to everybody in this House, but I am trying my best. I was not intending to speak but, as some points of principle have been raised, I feel it is right to put certain circumstances on record.

I will make three brief points. First, I feel we are having a highly abstract discussion about a very concrete and real situation. Noble Lords all know what is happening in Northern Ireland at the moment and what has happened over the last year and in recent months: the constant, gradual deterioration of the real political situation in Northern Ireland, the undermining of the institutions of the Good Friday agreement, and the degradation of some of the habits of co-operation and working together that we have seen over the years. This is a real situation, which must be dealt with. This Bill is a way of dealing with it and the Government—rightly, in my view—believe it is the best way of doing so.

We have to engage with that. We have to take real-life action to deal with the problems that exist on the ground in Northern Ireland. Important though discussions of international law and a reinvocation of why we signed this agreement may be, they do not deal with the real situation on the ground now. The Government are the Government of this country, and they are right to put forward proposals that deal with this situation. The best way to deal with it would be to expedite this Bill, not to delay, defer or withdraw it. The best contributor to stability in Northern Ireland would be to get this on the statute book and enable people to know what they are dealing with.

Secondly—

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[Lord Cormack (Con)]

In effect, we have heard this evening a reiteration of Dunning’s Motion in the reign of George III:

“The influence of the Crown has increased, is increasing, and ought to be diminished.”


We are seeing in the Bill not only an abrogation of international law and our obligations, which is what primarily concerns me, but in the process, by the design of the Bill, an accretion of power to Ministers and the Executive—an unbalancing of the relationship between Parliament and the Executive.

The Executive are answerable to Parliament in our constitution. Here, great chunks are being given to the power of the Executive. We owe an enormous debt to the noble Earl, Lord Kinnoull, and his committee, and other committees in this House, which have pointed this out calmly—to use a word I used earlier—but very forcefully. We are embarking on a road towards executive superiority such as is incompatible with our constitution, which is moving away in the 21st century from what our forefathers fought for in the past. We cannot emphasise that too greatly.

The person who could make this speech far better than I and whose name is on the amendments spoken to eloquently by the noble Lord, Lord Purvis of Tweed, is the noble and learned Lord, Lord Judge. Time and again, in a variety of Bills and contexts, he has pointed out to your Lordships’ House how the accumulation of Henry VIII powers in the hands of Ministers, without proper accountability to the House, is the road towards executive domination such as is incompatible with our constitution, as I said a few moments ago.

In wholeheartedly supporting these amendments, I urge my noble friend, when he comes to reply from the Front Bench, to address this issue and address it directly. I have great admiration for my noble friend Lord Caine. I certainly have great admiration for his knowledge of, and concern for, Northern Ireland, to which he has dedicated a large part of his life; but is he really happy to be put in a position, or see any of his ministerial colleagues put in a position, where they can override Parliament effectively by diktat?

[Lord Pannick (CB)]

I completely agree with the noble Lord, particularly in relation to his tribute to the noble and learned Lord, Lord Judge. In his absence—as his junior as it were—I draw this Committee’s attention to the quite extraordinary report of your Lordships’ Delegated Powers and Regulatory and Reform Committee to which reference has been made before, particularly at Second Reading, but it bears repetition. Its seventh report of this Session says at paragraph 4 that this is

“a skeleton bill that confers on Ministers a licence to legislate in the widest possible terms.”

It continues:

“The Bill represents as stark a transfer of power from Parliament to the Executive as we have seen throughout the Brexit process. The Bill is unprecedented in its cavalier treatment of Parliament”.


That is quite an extraordinary criticism of this legislation. It is made not by novices but by highly experienced and respected Members of your Lordships’ House across party lines. I find it deeply regrettable that the Government should think it appropriate to continue with a Bill that has attracted such cross-party criticism.

[Lord Lilley (Con)]

My Lords, I came into Parliament nearly 40 years ago and was told first of all that you should never ask a question to which you do not already know the answer. Now that I have been here so long, I feel that I can take the risk of asking some questions to which I do not know the answer, about a very important aspect of the Bill that has just been raised by the noble Lord, Lord Pannick.

There are two criticisms of the Bill, the first being that it is allegedly against international law. I do not believe that and have not really heard any answers to the points raised by the noble Lord, Lord Bew. What happens when you have two conflicting international obligations? The second criticism is that it relies, very largely and to an almost unprecedented degree, on Henry VIII clauses. Historically, I am very reluctant to rely extensively on Henry VIII clauses, and I was rather shocked by the committee report to which the noble Lord, Lord Pannick, has just referred.

The questions that I want to ask, and to which I do not know the answer, are: first, what is the alternative in the context in which we are to have open-ended Henry VIII clauses; and secondly, why did the Government not adopt that alternative? I assume that the alternative to the Henry VIII clauses is to spell out in detail, in primary legislation, what you intend to do, but the context in which we are doing it is that we are simultaneously legislating and negotiating.

The noble Lord, Lord Purvis, said that we cannot do that. It seems to me perfectly compatible with the doctrine of necessity to do that. We have to do something, we need the power to do something, we have taken the legal power to do something, but we would like that something to be negotiated if possible. So we are simultaneously negotiating and legislating. If we spell out in primary legislation, in detail, the outcome that we want to get, in the context of a negotiation that involves give and take, we either have to spell out the maximum we want—what we want to take without any give—or the minimum we are prepared to accept: what we are prepared to give without any prospect of taking.

In this unusual situation of having to have the legal powers to act while we are negotiating and hoping for a negotiated solution, I am not sure what alternative there is to what the Government have done. I would be grateful to hear what noble Lords would do who share my reluctance to rely on Henry VIII clauses. Effectively, we are saying we are recreating the royal prerogative in the negotiation, giving the Government a free hand, while giving them the power to take legislative action if those negotiations do not achieve a satisfactory result.

Russia (Sanctions) (EU Exit) (Amendment) Regulations 2022

Lord Pannick Excerpts

Thursday 24th February 2022 Lords Chamber

So I say to the Minister: I will back the sanctions. I am sorry that we have come to this point. I am sorry that the Russian state does not realise that common sense, decency and good practice should lead it to pursue what it sees as its legitimate expectations, but we do not, through a path of peaceful negotiation. What has been done is no longer acceptable in international politics, and we should make that very clear. All I ask is that the Minister co-ordinates with his European colleagues and we have a united European view, in so far as we can, on this matter.

[Lord Pannick (CB)]

I will make a short contribution. In this very interesting debate, mention has been made of Russians who have obtained funds by corruption and who come to this country and buy property or otherwise invest. Is the Minister confident that these regulations confer power to act against such persons? As he said, the only change that is made by these regulations is to give power to take action against those who have obtained

“a benefit from or supporting the Government of Russia”.

As the Minister rightly said, that concept is narrowly defined in new Regulation 6(4). The fact that you have obtained vast wealth by corruption in Russia, and you have come here and bought property or engaged in other economic activity, is not necessarily sufficient to bring you within the scope of these regulations, as I read them, but I would be delighted if the Minister tells me that I am wrong.

[Viscount Stansgate (Lab)]

My Lords, I welcome the Minister’s statement, and will be brief. I am also very grateful to the Government and the usual channels for enabling us to have a debate tomorrow. However, it is true that the regulations we are discussing today—which I think the whole House supports—are out of date. Indeed, I do not know when my noble friend drafted his amendment, but my guess is that everything has been overtaken by the events we woke up to find this morning.

What is going on is not just war of a kind that many of my generation never thought we would see, but also a battle of ideas and information. This morning, I watched Russia Today. I am not in favour of banning it, because it is interesting and important to know what the other side—as it were—is saying about this conflict. To give it credit, I saw a report from Berlin which listed the overwhelming criticism by European leaders on what is happening. However, I am sure that the Foreign Office and the Government are monitoring what the Russian people are being told. I put it to the Minister that we should do more to influence public opinion, because sanctions, if they are to work, are not going to work just on the people at whom they are aimed. The world is a rather more sophisticated and international place than it used to be. There will be people in Russia who are eager to understand more about what we are saying has happened and for us to use our power of information to counter the disinformation that they are being fed.

Nazanin Zaghari-Ratcliffe

Lord Pannick Excerpts

Monday 15th November 2021 Lords Chamber

[Noble Lords]

Oh!

[Lord Pannick (CB)]

I am very surprised at the Minister’s answers in relation to the £400 million. Does he accept that an international arbitration tribunal—an independent tribunal—has ruled that this country owes £400 million to the state of Iran? Does he accept that? Does he also accept that it is vital that this country complies with its international obligations to meet international arbitration tribunal reports? Does he also accept that to pay that sum without further delay would be to meet our obligations, and not to pay a ransom?

[Lord Goldsmith of Richmond Park (Con)]

My Lords, no one disputes that there is a historic debt, one which was owed to pre-revolutionary Iran. There is no dispute or debate about that. However, here I am answering a Question about Nazanin, yet the majority of questions relate to that money. The combination of that issue with the issue that we are dealing with—an appallingly tragic human case—is exactly what we should be avoiding. Otherwise, this does become a hostage situation and any payment of any money becomes payment for a hostage. That is not in our international current, medium or long-term interests.

Environment Bill

Lord Pannick Excerpts

Report stage
Wednesday 8th September 2021 Lords Chamber

[Lord Whitty (Lab)]

My Lords, I just want to intervene briefly to stress the importance of Amendment 24 and the associated amendment relating to Northern Ireland.

I recognise that the Minister himself and the Government’s own amendments in part reflect the concern about the independence of the OEP. I welcome in broad terms the letter I received from the Minister although I have to say that yesterday was probably not the best day to receive a letter whose first reassurance was that it was all going to be all right because it is in the Conservative Party manifesto.

However, these reassurances do not go anywhere near as far as the amendment of the noble Lord, Lord Krebs. If the Government do not accept these amendments, there is a much bigger story than one about appointments and guidance. In many ways, the Bill is a great Bill and I thoroughly support the bulk of it. However, if we do not accept the amendment from the noble Lord, Lord Krebs, or if the Minister does not agree to bring forward something very like it at Third Reading, then the credibility of the Bill—all its 145 clauses and 25 schedules—is at stake. Ultimately the effectiveness of all the good parts of the Bill depends on us having an office for environmental protection that is objective and independent and a system of environmental regulation and enforcement that is itself effective and independent.

As the noble Baroness, Lady McIntosh, said, post-Brexit we were promised a system of environmental regulation that would be at least as effective as the past EU regime when we had the Commission checking on the actions of member states and our public bodies. If the office for environmental protection—the body overseeing what is arguably the most important job of the Government: the long-term future of our environment —is not seen as independent, it will not be respected. It will be challenged and much of the good work that is behind this Bill stands to fail.

As I have said, the amendment from the noble Lord, Lord Krebs, is not just about procedural niceties in making appointments. It is about the credibility and effectiveness of everything we are working on in the Bill and in this House. I beg the House to support the amendments from the noble Lord, Lord Krebs, and my noble friend Lady Ritchie.

[Lord Pannick (CB)]

My Lords, I share the view around the House that the noble Lord, Lord Krebs, and the noble Baroness, Lady Ritchie, have made a compelling case for their amendments on a fundamental issue. It would be of enormous assistance if the Minister when he comes to reply would identify which part of Amendment 24 he objects to. Is it really the Government’s case that the OEP should not have

“complete discretion in the carrying out of its functions”?

Is that the Government’s case? I would be surprised and very disappointed if it were. If the Government accept that the OEP should have complete discretion, surely a matter of this importance should be in the Bill.

[The Earl of Caithness (Con)]

My Lords, no Minister likes an authority such as the OEP, because the Minister is undoubtedly convinced that his policy is absolutely right. However, when one stops being a Minister and looks back, one realises the importance of bodies such as the OEP.

I think my concern was summed up beautifully by the noble Lord, Lord Krebs, when he said that this is the one thing we have to get right. We were promised a totally independent body, equivalent to that which operated when we were in the EU. I accept that the Government should not be fined for not doing the right thing, but the OEP not only is—but has to be seen to be—totally independent. The Bill as drafted at the moment does not cover that. I hope that my noble friend will not be intransigent and stand out against this amendment but will go back for one more go with the other people in the department and the Secretary of State, understanding the enormous support there is in this House for the amendment of the noble Lord, Lord Krebs. It would be so much better if the Government solved this problem rather than having a Division. My noble friend was very good to me on my amendment on soil and has made a promise; I hope that he will be able to do the same thing again.

Hong Kong Courts: British Judges

Lord Pannick Excerpts

Monday 22nd March 2021 Lords Chamber

[Lord Ahmad of Wimbledon (Con) [V]]

My noble friend is right to draw attention to this worrying development whereby the Mandatory Provident Fund Schemes Authority will no longer accept BNO passports. It is yet further evidence of the challenges which continue to be experienced in Hong Kong. The Government have acted by providing new immigration routes to BNO holders to the UK. We have suspended the extradition treaty with Hong Kong and put in place an arms embargo. We continue to call out, as we did on 13 March through my right honourable friend the Foreign Secretary, breaches of the joint declaration.

[Lord Pannick (CB)]

My Lords, I last appeared in the Court of Final Appeal in Hong Kong two weeks ago. It was a remote appearance. It was 2 am, but the court seemed to me to be as independent as it has been since 1997. Will the Minister recognise that the judges in Hong Kong are doing everything in their capacity to maintain their independence and that they and the independent Bar in Hong Kong are very keen that the judges of this jurisdiction continue to support them and do not abandon them?

[Lord Ahmad of Wimbledon (Con) [V]]

My Lords, the noble Lord speaks with great insight on this matter, and I agree with him. That is why it is right that the Supreme Court makes a decision, but it is also right that it does so while consulting Her Majesty’s Government. We pride ourselves on the strength of the independence of the judiciary. I hope that the authorities in Hong Kong do the same.

Hong Kong

Lord Pannick Excerpts

Tuesday 2nd June 2020 Lords Chamber

[The Senior Deputy Speaker]

Lord Owen? The noble Lord, Lord Owen, is not there, so I will go to the noble Lord, Lord Pannick, and return to the noble Lord, Lord Owen, when he gets a connection.

[Lord Pannick (CB)]

Does the Minister agree that Hong Kong has the important asset of an independent judiciary, which is admired throughout the world, and that the judges of Hong Kong will inevitably be asked to decide whether the new laws, if implemented by Beijing, are part of Hong Kong law or whether they conflict with the Basic Law of Hong Kong, as many lawyers have suggested? I declare an interest as a regular advocate in the Hong Kong courts on constitutional matters.

[Lord Ahmad of Wimbledon]

I agree with the noble Lord that that is important. The independence of the judiciary in Hong Kong is well recognised. In due course, if China proceeds along these lines, I am sure that the judiciary will give its opinion, but we have deep reservations. If China proceeds with this, it will undermine “one country, two systems”, which is enshrined in Hong Kong’s Basic Law.

Hong Kong: Pro-democracy Activists

Lord Pannick Excerpts

Wednesday 10th April 2019 Lords Chamber

[Lord Ahmad of Wimbledon]

I agree with the noble Baroness that we all remember Lord Ashdown for a variety of reasons and this is one of those occasions. On the specific issue that she and the noble Lord raised about extradition, yes, we are acutely aware of the proposed change to legislation. We are fully considering the implications of that and how it may impact UK citizens and, in particular, as the noble Baroness said, people operating within the business community. In that regard, the British consul-general in Hong Kong has spoken to senior figures in the Hong Kong Administration to seek clarity on what the proposals will mean, particularly for UK citizens, and we continue to make a case to them. It remains the United Kingdom’s view that for Hong Kong’s future success it is essential that Hong Kong enjoys—and is seen to enjoy—the current autonomy under the agreement that was signed not only by the United Kingdom but by the Chinese Government.

[Lord Pannick (CB)]

My Lords, in the light of those questions, will the Minister emphasise that those who have been convicted have the right of appeal; that the basic law protects the independence of the judiciary; and that, in practice, the Hong Kong judiciary is as independent as any judiciary in the world? I declare an interest as a frequent advocate in the Hong Kong courts both for and against the Government of Hong Kong.

[Lord Ahmad of Wimbledon]

My Lords, the noble Lord speaks with immense expertise and experience in this regard. I can assure him on all three of those statements in terms of the autonomy and independence of the judiciary. Since this agreement has been in place over the past 30 years, there has been only one occasion, in 2016, when we had formally to call out a lack of adherence to the principles of the treaty. He asked about the right of appeal. The people who have been convicted are currently out on bail. Sentencing is due on 24 April and they will have 28 days thereafter to lodge a formal appeal.

Sanctions and Anti-Money Laundering Bill [HL]

Lord Pannick Excerpts

Ping Pong (Hansard): House of Lords
Monday 21st May 2018 Lords Chamber

[Lord Hain (Lab)]

My Lords, I, too, welcome government Amendment 1 and its associated amendments and applaud the Minister for the way he has spoken forthrightly on the human rights agenda and stewarded the Bill, which is a case study in how a Government and a Minister should and can respond to amendments from the Opposition, the Liberal Democrats and Cross-Benchers.

At the same time, I crave the indulgence of the Minister, the Whip sitting next to him and your Lordships’ House in returning to a subject which I have raised before—which, I am authoritatively told, has had some impact on the welcome change in the leadership of South Africa. This week marks South African President Cyril Ramaphosa’s first 100 days in office. I will be brief, but the official state money laundering and corruption virus he inherited from President Zuma is significantly more virulent and pervasive than even Ramaphosa could have anticipated, made immeasurably worse by the complicity of UK-based global corporates.

Take Hogan Lovells, the international law firm headquartered here in London and in Washington, its role starkly exposed in documents recently released to the parliamentary finance committee in South Africa. In your Lordships’ House, Report on the Bill on 15 January, I first criticised its role for whitewashing corruption by Tom Moyane, chief of the South African Revenue Service, now suspended by the new President. According to these documents, Hogan Lovells kept silent even when its findings related to money laundering and corruption by Moyane’s former deputy, Jonas Makwakwa, and even after Moyane misled the South African Parliament. Through its despicable, fee-grabbing complicity, Hogan Lovells spared these two notorious perpetrators of state capture in South Africa from accountability for their complicity in, and cover up of, serious criminal behaviour, including money laundering and corruption.

At the same time, Hogan Lovells has been undermining the criminal justice system in a series of other cases, as proven by the fearless Forensics for Justice NGO investigator, Paul O’Sullivan. Effectively, Hogan Lovells was acting as former President Zuma’s legal fudger-in-chief.

Brave investigative journalist Pauli van Wyk has exposed lies by the senior partner of Hogan Lovells in South Africa, Mr Lavery Modise. In the Daily Maverick, she pointed out:

“Despite having the benefit of the report by Price Waterhouse Coopers (who actually conducted the investigation), Modise and his team ultimately charged Makwakwa with everything he could explain, and with exactly nothing that he previously struggled to explain, or simply refuse to account for”.


Indeed, the more serious allegations in the PwC report were carefully filtered out of Hogan Lovells’s report, and the firm did not point out that Moyane was preventing critical evidence from being given to PwC.

Hogan Lovells’s most specious piece of lawyer sophistry was to claim that it could look only at the employer-employee issue involved and not at any criminal issue, giving the excuse that the employee, Makwakwa, could otherwise implicate himself. Surely all good employers, and indeed employees, should report on any criminality at their workplace, and surely even more so in the vital state revenue agency when the crime relates to money laundering and tax evasion. Effectively, Hogan Lovells turned a blind eye to the looting of the tax agency. It took a fat fee and ignored the truth. Most astonishing to me is that Hogan Lovells still refuses to acknowledge, let alone apologise for, its complicity, thereby actively supporting those still trying to undermine President Ramaphosa’s reform programme.

The behaviour of Hogan Lovells in South Africa is a classic example of a British-based company obfuscating its behaviour, using the complexities afforded by the law, including client confidentiality, to conceal the crimes of money laundering and corruption. Hogan Lovells fits exactly the behaviour exposed by investigator Pauli van Wyk when she concluded:

“The tale of State Capture ... co-exists in a mutually parasitic relationship where the public purse is the feeding ground and corporates are the enablers and agents of whitewash”.


British based corporates such as Hogan Lovells should be supporting, not thwarting, President Ramaphosa’s anti-money laundering agenda.

The Solicitors Regulatory Authority has now declared that Hogan Lovells South Africa is a “connected party” to its UK firm and I therefore request—I hope that I will have the Minister’s support—that the SRA withdraws recognition from Hogan Lovells UK and suspends its UK senior partners from practising here for its scandalous activities in South Africa. I also ask British Ministers to ensure that Hogan Lovells UK receives no more UK public sector contracts until it at least apologises for its shameful and shameless South African role. Additionally I can report that, after I raised this matter at Second Reading in November, the Financial Conduct Authority has recently informed me that it is engaging with the whistleblower who has supplied evidence that I believe should see HSBC prosecuted for conspiracy for facilitating money laundering.

I conclude: unless Ministers ensure that there are penalties for UK-based corporates like Hogan Lovells, HSBC, the Bank of Baroda, Standard Chartered, Bell Pottinger, KPMG, McKinsey—and who knows how many others?—for their complicity in protecting criminals engaged in money laundering in the South African case, I am afraid this legislation will not be worth a candle.

[Lord Pannick (CB)]

The Minister was asked about safeguards. Can he confirm that the safeguards in the Bill, which we debated at great length in its various stages to ensure fairness to those listed, will apply in exactly the same way to those persons accused of human rights violations as they apply to all those listed for other reasons under the Bill?

[Lord Collins of Highbury (Lab)]

My Lords, I will be very brief. The noble Lord, Lord Anderson, asked the questions that I considered appropriate. I will not delay the House, but will repeat what the noble Lord, Lord Pannick, said in terms of an amendment we jointly agreed to, ensuring that fair process is considered in relation to this aspect of the Bill.

I very much join other noble Lords in welcoming the Government’s change of heart. There was opposition from the Government on these principles, and we had a successful amendment on human rights being the centre of foreign policy.

I welcome completely the noble Lord’s commitment. My honourable friend Helen Goodman also took the rather unusual step of signing the Government’s Magnitsky amendments, despite the fact that, in Committee, the Government had opposed her own amendments. I welcome very much the new consensus and hope that it is a sign that we can move forward with greater clarity in terms of foreign policy and human rights.

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[Baroness Northover]

My Lords, as the Minister will know, and as the noble Lord, Lord Collins, expressed, the Delegated Powers Committee was very concerned about Amendments 11 and 12. I must say that I found it astonishing to read that yet again, at this late stage of the Bill, the same issues are coming up that we had at the beginning, and to hear the Delegated Powers Committee noting,

“the Department’s failure to explain the width of the powers being granted, and why it is not possible to limit the powers … and to specify on the face of the Bill the persons who are to exercise the powers”.

I hear what the Minister says. I note that the Delegated Powers Committee is reluctantly saying that, if the Lords accepts the way that these amendments have come forward, the powers should be subject to the affirmative procedure in both cases. I wonder what the noble Lord, Lord Pannick, makes of the amendments.

[Lord Pannick]

I am very disappointed—at other noble Lords are—at the approach of the Government. All these points were fully debated at Second Reading, in Committee and on Report, and the constant theme across the House was that it was vital to constrain the powers that Ministers were giving themselves in relation to the Bill. The Minister was very receptive to those concerns and accepted a number of amendments, and it is therefore very disappointing that at this very late stage we see again the same vice. So I share the disappointment and regret that, given the stage we are at, it is too late to do anything about it. But I hope that the Minister will take back to his department our concern and the promise—it is not a threat—that, if similar powers are put before us in another Bill, no doubt noble Lords will have more to say about it.

[Lord Ahmad of Wimbledon]

My Lords, I thank noble Lords for their comments on this amendment and, of course, I have noted what all noble Lords said and the concerns they expressed. Let me assure them once again—I mention in particular the noble Baroness, who mentioned Amendments 11 and 12—that I will address specifically the powers of the Minister, and give the assurance once again that a detailed response will be provided to the Delegated Powers Committee. I am seeking to ensure that this response will be provided before the Recess.

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[Lord Ahmad of Wimbledon]

My Lords, we now come to the important issue of criminal offences. This group of amendments would allow powers in the Bill to be used to create criminal offences and penalties in regulations for both sanctions and money laundering breaches, subject to new safeguards.

I say at the outset that I recognise that your Lordships’ House had serious concerns about the inclusion of these powers, and the noble and learned Lord, Lord Judge, in particular, remains very concerned. I assure all noble Lords that once the Bill left your Lordships’ House we continued to listen to those concerns and have sought to address them. That is why these amendments also include an important new procedural safeguard of a requirement to report to Parliament, meaning that the Government have to inform Parliament specifically about the use of the powers to create criminal offences in secondary legislation. This is intended to enable Parliament to be better informed about the use of these powers and to be able to properly hold the Minister to account.

I shall go through each of the amendments in more detail. Amendments 9 and 21 restore the ability to provide for criminal offences and penalties in sanctions and money laundering regulations. In tabling these amendments, I acknowledge your Lordships’ recognition of the importance of rigorous anti-money laundering and sanctions regimes. In order to ensure the robustness of future sanctions and anti-money laundering regulations, corresponding powers to create criminal offences for breaches of those future regimes are necessary so as to preserve the ability of future Governments to impose effective and dissuasive sanctions for breaches of regulations.

I recognise that some in your Lordships’ House had concerns about the scope of these powers when the Bill was first introduced. These amendments address those concerns through additional safeguards, which must be met before the powers can be used. When I come to Amendments 31, 32 and 34, I shall elaborate upon the safeguards, which the Government have discussed with noble Lords since the Bill’s passage through this House.

The amendments restore our ability to enforce sanctions. As noble Lords are aware, sanctions are used to prevent serious threats to national and international peace and security. It is therefore right that breach of them is a criminal offence, and it is also right that penalties should be set at a level that acts as a proper deterrent for these serious crimes. The Bill gives us the ability to set penalties at up to 10 years’ imprisonment, but that does not mean that we will set them at the maximum in every case.

In respect of trade sanctions, offences for breaches of prohibitions made under the Export Control Act 2002 all have maximum penalties of 10 years’ imprisonment. That does not apply to the trade sanction prohibitions created under the European Communities Act 1972, which are capped at two years’ imprisonment, despite the breaches being just as serious a matter. This Bill will enable us to remedy that disparity by harmonising maximum penalties for breaches of all trade sanctions at 10 years.

Currently, breaches of financial sanctions can be punished by up to seven years’ imprisonment, and we plan to continue to set penalties at this level for financial sanctions. We also plan for breaches of other sanctions, such as transport sanctions, to have penalties set to match this level. There will also be offences, such as the failure to provide information when required to do so by law, that require lesser penalties, such as up to two years’ imprisonment, and we do not plan to increase penalties in those areas either.

I have set out in previous debates how the enforceability of new regulations would be seriously weakened without the power to create criminal offences, and how it is not unusual for requirements in delegated legislation to be enforced using criminal penalties. I now turn to the procedural safeguards we have introduced, which I hope will constitute sufficient reassurance to noble Lords who have expressed concerns.

Amendments 10, 25 and 32 introduce the important safeguard of requiring the Government to lay a report before Parliament whenever criminal offences are created or amended in sanctions regulations made under Clause 1 or in anti-money laundering regulations made under Clause 43. The amendments require the report to be laid at the same time as the regulations are laid or when the draft statutory instrument containing the relevant regulations is laid, depending on which parliamentary procedure is used. The report will facilitate effective parliamentary scrutiny of future use of criminal offences in sanctions regulations and goes further than the status quo in enabling Parliament to scrutinise the creation of criminal offences through sanctions or money laundering regulations.

The amendment specifies what elements should be included in these reports. Specifically, this will include: first, the details of the offences that have been created and the requirements to which they refer; secondly, the good reasons why a breach of these requirements should be enforced via criminal offences; thirdly, the maximum prison terms for any offences created which are punishable by imprisonment; and, fourthly, the reasons why those maximum terms have been set at the level they have. I trust noble Lords will agree that these reports will provide increased transparency as to the reasons for creating future criminal offences, and so give both Houses of Parliament a new and solid basis for holding the Government to account on the use of these powers when debating regulations made under the Bill. Nevertheless, the Government remain very aware that creating criminal offences and setting penalties in regulations is a serious matter and not one to be undertaken lightly. We hope that these amendments address that.

I would also like to take this opportunity to assure your Lordships’ House that the requirement contained in Amendment 25—for a Minister, when for whatever reason a report is not laid on time, to make a statement about that failure to the House—does not in any way circumvent the obligation to make the statement. It is an additional requirement, meant to create a further obligation to Parliament that if, for example, there has been some administrative error in publishing a statement, Ministers must provide an explanation to Parliament for that failure.

Amendment 31 is consequential to new paragraph 20A inserted by Amendment 32. The envisaged paragraph 20A(1) of Schedule 2 clarifies the scope of potential offences created for the purposes of the enforcement of requirements imposed by or under regulations under Clause 43.

Amendment 32 also makes the power to create criminal offences in money laundering regulations subject to the requirement for a report to Parliament along the same lines as the amendments for Part 1 of the Bill. This amendment clarifies that the scope of the power for creating future offences is restricted to offences for the purposes of enforcing future anti-money laundering regulations. It is both necessary and, importantly, proportionate.

Amendment 34 ensures that references made to regulations made under Clause 43, with respect to paragraph 15 of Schedule 2, and requirements imposed by regulations made under Clause 43, with respect to paragraph 20A of Schedule 2, also include reference to or requirements imposed by the Money Laundering Regulations 2017. This amendment ensures that new money laundering offences can be created by amending the Money Laundering Regulations 2017. It will therefore enable the Government to create new offences in order to respond, for example, to emerging risks identified by the national risk assessment of money laundering and terrorist financing, which was published in October of last year, or in response to the ongoing review by the Financial Action Task Force of the UK’s anti-money laundering and counterterrorist finance regime. I beg to move.

[Lord Pannick]

My Lords, in the early stages of this Bill, my noble and learned friend Lord Judge, who is not in his place, expressed the concerns that many of us felt about Ministers being given a power to create new criminal offences and, indeed, to specify maximum sentences. I am very pleased that the Government have recognised a need for safeguards in this context. This is an exceptional circumstance, and I very much hope that the Government will not see this as a precedent to be used in other contexts.

[Baroness Northover]

My Lords, the potential creation of new criminal offences by Ministers was of course the subject of major debate in the Lords, and the Government were defeated. It is the Government’s compromise that we are considering here. I know that the Government and the noble and learned Lord, Lord Judge, spent a great deal of time on this, as did my noble friend Lady Bowles. Noble Lords did not quite get to where they would have liked, but I know that they thought progress had been made. We are therefore content to accept the position that we have reached. However, the noble Lord, Lord Pannick, makes an important point about this not being a precedent.

Sanctions and Anti-Money Laundering Bill [HL]

Lord Pannick Excerpts

3rd reading (Hansard): House of Lords
Wednesday 24th January 2018 Lords Chamber

[Baroness Northover (LD)]

My Lords, when the Minister introduced the Bill at Second Reading, he described it as “technical”. It was, of course, about issues on which we all agree: enabling us to have a sanctions regime and to counter money laundering. No sooner were those words out of his mouth than he and all of us registered how important the Bill was in constitutional terms. It is indeed a forerunner of the massive legislation coming our way in the European Union (Withdrawal) Bill, and much else besides.

I therefore thank the Minister for his mental and political flexibility in realising the significance of the way in which this Bill has been drawn up, but above all for being so ready to engage. I thank him today for his latest statement that he will address the inconsistencies on criminal offences immediately in the Commons. My thanks, too, to the Bill team for its equal readiness to engage with us, even responding to emails on Sundays—I think that was Jonny and Louise—when it was clearly beyond the call of duty.

Issues in the Bill included the usual kind of areas where we sought improvements. We failed to take forward the amendment tabled by the noble Baroness, Lady Stern, but I am sure we will return to that. In other areas we have made progress, either in the Bill or through promises that the Minister made in regard to actions that the Government will take; for example, in relation to NGOs working in fragile states and those who may or may not bank them.

However, of most importance were the constitutional issues. Here we are absolutely indebted to the noble and learned Lord, Lord Judge, and the noble Lord, Lord Pannick, for the clarity of their thinking and their determined engagement. I also think that we owe a huge debt to my noble friends Lady Bowles and Lady Kramer—I thank the Minister for that acknowledgement—for spotting quite how much needed to be addressed on the anti-money laundering side of Bill, and setting about reconstructing it. The best result is indeed when the Government bring forward amendments in response to such concerns.

I am extremely grateful to those in my group who have engaged on this Bill. I can hardly describe myself as leading them—they are far too experienced and knowledgeable to need leading. My special thanks go to my noble friends Lord McNally and Lady Sheehan as well as to my noble friends Lady Kramer and Lady Bowles for the extraordinary amount of work they put in. I also thank the noble Lord, Lord Collins, who has been his usual wonderful self throughout this Bill, and his colleagues, the noble and learned Lord, Lord Davidson, and the noble Lord, Lord Lennie. The Bill signals much beyond what it aims to cover, and we have worked collectively around the House, including with the Government. I thank the Minister for ensuring that that work was in the end so productive. He is now temporarily liberated from the Bill—the Bill team, of course, is not—until it returns to us in due course, hopefully in a very sound fashion.

[Lord Pannick (CB)]

My Lords, I add my thanks to the Minister and the Bill team for what the Minister accurately described as the collaborative co-engagement on the Bill. It has been quite remarkable and exceptional, and I am very grateful to him. My only regret is that, personally, I prefer a good argument—it may be my professional training—but I realise we are not here for my personal gratification. I very much look forward—perhaps the Minister may communicate this to his colleagues on the Front Bench—to the same collaborative engagement, co-operation and desire to accommodate concerns when we consider any other Bill that may come before this House in the weeks ahead.

[Lord Patten (Con)]

My Lords, your Lordships may need reminding that, before this excellent Bill was introduced, between April and June last year, some 30,000 people and companies were asked for their views. Just 34 responded with any views in writing. Since its introduction, however, the Bill has received the line-by-line scrutiny expected of your Lordships’ House in Committee. Even I had a go, once or twice.

No one could fairly say that it has not been scrutinised thoroughly before it journeys to another place. There certainly have been some tussles but, below the surface, it has received broad all-party support. This is welcome from the Opposition Benches and Cross Benches, of course—just as some of us, a few years back, in opposition, spoke in equally strong support of the eventual Bribery Act 2010, when ably introduced to Parliament by the then Justice Secretary Jack Straw, whose contribution certainly should not be forgotten. I believe the Bribery Act is still the toughest anti-corruption legislation anywhere in the world, raising the bar far above the earlier US Foreign Corrupt Practices Act. Similarly, if passed by another place and then passed by us again, the Sanctions and Anti-Money Laundering Bill will become its absolute twin, as it were, giving us again another globally tough measure to match the Bribery Act, and marching in step with it.

We must remember that bribery, sanctions breaking and money laundering are very often in practice very closely intertwined. One key test of the legislation before your Lordships’ House is its ability to go beyond the big or top players, right down through the supply chains of corruption via intermediaries, and then down through them to minor actors and mere runners—indeed, that cascade of responsibility referred to so aptly by the noble Baroness, Lady Bowles of Berkhamsted. How right she was. The Bill as amended by your Lordships does just that, as globally we work against terrorism and in favour of maintaining and strengthening the integrity of our financial system, as we have since 1989, when the UK as a key player was one of the G7, which first set up the Financial Action Task Force.

Sanctions and Anti-Money Laundering Bill [HL]

Lord Pannick Excerpts

Wednesday 17th January 2018 Lords Chamber

[Lord Pannick (CB)]

My Lords, I simply add to the very powerful statement made by the noble and learned Lord that it is the generality of the power that is so objectionable—its unrestricted nature. If the Minister can bring forward an amendment at Third Reading that confines and restricts this power to some specific purpose, of course the House would consider it. At the moment, the Bill confers a completely unrestricted and unregulated power on Ministers, which is what is so objectionable.

--- Later in debate ---

[Baroness Northover (LD)]

My Lords, my name, too, is on the amendment. I support the noble and learned Lord, Lord Judge, and commend him on his clarity and leadership on this constitutional issue. This is another Henry VIII clause—something that was described very clearly by the noble and learned Lord.

As others have said, there have been two major votes this week on this constitutional issue in the Bill. The first was on Monday and it was won, and there was another today. Today the vote was much bigger and the majority much bigger, so I hope the Minister will flag up to his colleagues that current plans for Henry VIII powers in many pieces of legislation coming our way must be rethought. Surely it is clear that all sides of the House, in every party group and none, will respond as they have today. Much wisdom has been evinced today, both earlier in the proceedings and just now, and I must say that I am very proud of what the House of Lords achieved today.

[Lord Pannick]

The noble Lord, Lord McNally, and the noble Baroness have made a powerful case that this House is signalling clearly to Ministers that it is simply not prepared to accept clauses of this nature. The great fear and regret is that Ministers are putting these clauses into each and every Bill as a matter of course without thinking about whether they are needed or if there is a way of adopting a more narrow and tailored approach.

Perhaps I may add to that by giving Ministers some legal advice. It is not simply this House that is not prepared to accept such clauses. We are arriving at the point where the courts are not prepared to accept them and are showing every sign that they will give them the narrowest possible interpretation because, as a matter of constitutional principle, they are objectionable. I draw to Ministers’ attention the judgment of the Supreme Court with the noble and learned Lord, Lord Neuberger of Abbotsbury, presiding. He gave the judgment last year in the Public Law Project case. The noble and learned Lord quoted with approval what had been said by Lord Donaldson, who was then the Master of the Rolls, in a case in 1989; this is not a new problem. I shall quote from paragraph 27 of the judgment:

“‘Whether subject to the negative or affirmative resolution procedure, [subordinate legislation] is subject to much briefer, if any, examination by Parliament and cannot be amended. The duty of the courts being to give effect to the will of Parliament, it is, in my judgment, legitimate to take account of the fact that a delegation to the Executive of power to modify primary legislation must be an exceptional course and that, if there is any doubt about the scope of the power conferred upon the Executive or upon whether it has been exercised, it should be resolved by a restrictive approach’”.


Ministers should be in no doubt whatever that the courts recognise that clauses such as this are constitutionally objectionable and that they will do everything they can to ensure that any exercise of such a power is subjected to the most rigorous scrutiny in the courts. If Ministers do not accept that and respect it, they will find that exercises of these powers will be struck down by the courts.

I agree entirely with the noble and learned Lord, Lord Judge, that this House is indicating its willingness to look closely at such clauses. Ministers should think very carefully indeed, in relation to further legislation, whether it really is appropriate and necessary to include them in the Bill.

[Lord Lennie]

My Lords, I support what the noble and learned Lord, Lord Judge, and the noble Lord, Lord Pannick, have said. I am not going to comment on whether Messrs Corbyn and McDonnell would be safe hands to put these powers in; noble Lords can make their own minds up about that. In the light of what the noble Lord, Lord Pannick, has said, any Minister should be very wary of using these powers. We support the amendment.