Terrorist Asset-Freezing etc. Bill [HL]

Baroness Noakes Excerpts

Wednesday 6th October 2010 Lords Chamber

[Baroness Hamwee]

My Lords, I congratulate the noble Lord, Lord Pannick, on his energy in tabling Amendment 3 relatively quickly. When I opened all the papers after a break in the summer, I thought that I had better check to see whether any amendments had been tabled, having written “belief” as the first thing in my notes. I found that the noble Lord had got there before me. I am delighted that he did and delighted that the Government have taken the point. It was one of the major points concerning my noble friend Lady Falkner and me, but not the only one. Some of the points that have already been made, particularly by the noble and learned Lord, Lord Lloyd of Berwick, we will come to in later groups of amendments. I, too, welcome what the Government have done so far.

I shall start with a technical point. I hope that the Government and the House will accept that noble Lords may wish to look at amendments to these government amendments at the next stage. I have tripped over this in the past when I have been told that I had accepted a government amendment in Committee. There is plenty that is worth further debate now that we have had more of a chance to consider them. The critique by the noble Lord, Lord Pannick, of Amendments 29 and 31 goes to that point.

On a general note, the Minister referred to the counterterrorism review. One point that he did not cover when addressing whether asset freezing should fall within the review is the different regimes for asset freezing. The differences between the regimes continue to be troubling.

There is a difficulty in how one splits between this group and the third group one's points on whether the decision should be an executive decision or a judicial decision. I recognise the need for speed. The courts are capable of speed and, as has been said, could deal with an ex parte application by the Treasury in order to take what one might call precautionary interim steps in order not to find that the prospective designated person has outwitted them. Our amendments show that I was prepared to contemplate an initial designation by the Executive, subject to an application to the court, which is our third group, but I remain concerned about whether this should be an executive matter or a judicial matter. In this speech, I shall not cover reasonable suspicion for the 30 days as I hope my noble friend will refer to that in a moment.

If I use the term “draconian” for the asset-freezing regime, I will be told that that applied to a previous regime and that the licensing that the Treasury now implements is more benevolent, but I do use the term because I still see asset freezing as very close to control orders. The noble and learned Lord, Lord Brown, said that in one of the cases that we have referred to. He said:

“In certain respects, indeed, they could be thought to be even more paralysing”.

However you analyse the differences, asset freezing is very close to the restrictive end of the spectrum, with an impact not only on the designated person but, as we will come to in more detail later, on that person’s family. Standing back from the technical words, we can think about living in a family where the main breadwinner is not able to function and the impact that that has on the way the whole family operates, the stigma attaching to it and the relationships with the outside world. If I were the spouse of a designated person, I would not want to go shopping in a supermarket feeling that everybody in my community was looking at me. If I were the child of a designated person, I would be really worried about going to school. The prospects for bullying and so on are enormous. That is not to say that we should not protect the public, but we have to bear that other side in mind. The existence of designated persons under an asset-freezing regime is an existence rather than perhaps full life.

It comes down to whether we think the prime responsibility should be that of the Executive or of the courts. For the reasons that I have given, I continue to believe that the impact should be a judicial responsibility. Is it appropriate? Recognising the objective, is it even proportionate for the Treasury to be both the accuser and the judge?

[Baroness Noakes]

My Lords, I was not able to take part at Second Reading, which I regretted as, when I sat in the seat now occupied by the noble Lord, Lord Davies of Oldham, I covered the terrorist asset emergency legislation earlier in the year. I have of course had an opportunity to read that very good Second Reading debate. Despite the fact that I have now moved to this side of the House, had I taken part in the debate I would have regretted that the Government had not moved on from the formulation of asset freezing bequeathed by the previous Government and my tone would have been probably somewhat critical of my Front Bench. So it is a great delight to me to find that the Government have tabled the amendments in this group. They show that the Government have listened to some of the concerns from the civil liberties groups and from noble Lords and noble and learned Lords. In particular, I believe that the belief formulation is superior to the suspicion formulation, and the interim designation solution is a practical response to the issues that have been raised.

The noble Baroness, Lady Hamwee, raised an important point on amendments to amendments. My noble friend will be aware that if we accept these amendments in practice without agreement, there can be no further amendments. But the Government tabled these amendments particularly late—even later than normal for a Government to table amendments. Conjoined with the fact that when they were tabled we were still in recess, and for many of us it was difficult to access things, I hope that my noble friend will accept that it is reasonable for your Lordships’ House to discuss the substance and the detail of the points that come up in relation to the amendments, which I am reasonably confident your Lordships' House will accept this afternoon. It would not be right to stand on the formality that, having accepted the amendments, we can no longer discuss them in the later stages of this Bill.

Having said that I support the amendments in this group, I have one question for my noble friend. It will be interesting to see how these interim designations are used in practice and whether they are converted to final designations. Under Clause 24, there is to be a regular Treasury report on the use of the powers in the Bill. Will my noble friend assure me that that report will cover the extent to which interim designations are converted into final designations? We would want to have some assurance that the power that is being used in relation to interim designations was sufficiently robust and did not fall significantly short of the standard that we would regard as acceptable for draconian actions to be taken in respect of people’s assets.

Finally, picking up on what my noble friend said about the Home Office review, I think he led the House to believe at Second Reading that that review would be available before we returned. He referred specifically to the Commons Summer Recess ending before we returned. It is a considerable disappointment that we do not appear to have that review available for our Committee stage. Is it possible that we will have that Home Office review before finalising the remaining stages of this Bill? It would be disappointing if the Bill left this House without sight of that review. In particular, although my noble friend referred to the fact that it concludes that there are enough significant differences between the control order regime and the asset-freezing regime, many of us remain to be convinced of the translation of that into legal effect. We would value looking at the arguments and analysis that led to that conclusion.

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[Lord Sassoon]

My Lords, I shall come to the Kadi case although I should note that it does not directly relate to this particular regime. There is a judgment to be made as to what actions are ones for the Executive and what are not. We believe that this measure—it is the way this regime has worked over the years—should be operated by Ministers with the appropriate protections. The word “draconian” has to be used and understood in a particular way. The measure is intended to be draconian in the sense of making a material impact on the ability of terrorists to finance their activities but is not intended to be draconian in the sense that we also have very significant safeguards in the regime through the licensing which allows proper expenditures to be made. Therefore, I do not recognise the word “draconian” in that sense as we ensure, under individual or general licences, that money can be released for the appropriate uses, whether that is to pay legal bills or family expenses and so on.

The noble Lord, Lord Pannick, made some very helpful remarks. As we are also discussing his amendment, I reiterate his endorsement of the broad shape of the regime that we propose in the government amendments. He made three specific points in relation to what we are proposing in Clause 29 and asked detailed questions about whether it should be the same evidence or substantially the same evidence. As I think he recognises, these are fine points which I will take away and consider. On the noble Lord’s point about appropriate notification, I should have thought that if certain people had been notified at the outset, at stage two it would be appropriate to notify the same people, so I am not sure that that needs to be stiffened up. Indeed, I am not immediately persuaded as to what difference the use of the same evidence or substantially the same would make in practice, but I will have a look at that.

My noble friend Lady Noakes talked about the procedural points that I have addressed in the Home Office review. My noble friend asked whether the review will detail the number of interim and final freezes and how many interim freezes had become final freezes. I have little doubt that that will be covered in the review. I am not sure that the implication should necessarily be drawn that if a number of interim orders are made, but they actually fall away, that in any sense suggests that they were improperly made or that the evidence was not properly based. I can quite see circumstances in which interim orders have to be made but, for a number of reasons, could fall away. I take my noble friend’s point about—

[Baroness Noakes]

I probably did not express myself particularly well when I put the point to my noble friend. I was not talking about the work of the independent reviewer, but of the requirement in Clause 24 on the Treasury to make a report. I hear the Minister trying to say that nothing can necessarily be inferred from the relationship between interim and final designations. I am really seeking to make sure that that information will be made available in the public domain, and the report by the Treasury under Clause 24 seems to be the obvious route, not the work of the independent reviewer.

[Lord Sassoon]

I thank my noble friend and entirely take her point that it would be a matter for the Treasury report. I am grateful to her for clarifying that she agrees with me that one could not take a simple implication from a read-across of the number of interim reports that might—we will see whether they do—fall away.

My noble friend Lady Falkner of Margravine asked why there should be a period of 30 days as opposed to any other number of days. There is, as she put it, no particular magic in designating a period of 30 days. One could mount an argument for 14 days or 45 days. Thirty sits in the middle, and it seems a reasonable period. Quite a number of cases have come across my desk and that period seems to strike a reasonable balance. However, there is no magic about it.

As for the experience of other countries, I shall look to see what other experience there is. However, I can say that New Zealand, specifically, has an interim designation which can be made for 30 days on the basis of suspicion and a final designation which requires reasonable belief. New Zealand was mentioned in a question from the noble and learned Lord, Lord Davidson of Glen Clova. Regrettably, I met New Zealand’s Deputy Prime Minister yesterday—if the meeting was tomorrow, I could ask him the question. However, the review here operates in a different way, and we also have the regular review which Treasury Ministers have to make. Our regime is different from New Zealand’s, and we have a separate safeguard, the regular review, which is also subject to appeal to the court.

The noble and learned Lord made a couple of points about resource pressures and additional costs. I have no reason to believe that there will be significant additional costs or resource pressures. Perhaps linked to that, the noble Lord, Lord Myners, asked about fishing trips. He said that it was a churlish point, but I would not say so. It is important to question whether there will be fishing trips. I have absolutely no reason to believe that the new regime as proposed will lead to fishing trips. A series of serious tests have to be applied and that includes protection of the public. This is linked to the resources point. Resources will not be significantly increased, because nothing in the proposals will allow Ministers to go off on fishing trips.

Perhaps the last point left hanging concerns the Kadi case. The first thing to say is that the case does not impinge directly on the legislation that we are looking at. The latest judgment annuls the EU regulation and the listing under it dating back to 2001 as it applies to Kadi, but there is a suspension of the judgment for two months and 10 days to allow time for an appeal to be made to the Court of Justice. If an appeal is lodged, it is likely to take 18 to 24 months. I expect that the Foreign and Commonwealth Office will press the Commission to appeal the decision; so the case has a long time to run. Of course, if the judgment were upheld, it would set our EU obligations squarely against our UN obligations, which would present a difficulty: but it is not a difficulty that impinges directly on the Bill.

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[Lord Pannick]

My Lords, I, too, welcome government Amendment 57 on the right of appeal. This seems to be a strong safeguard, which renders insubstantial the concern that the original decision is taken by the Executive. That of course is subject to two matters on which I would ask for reassurance from the Minister. First, would the Government expect provision to be made for an urgent appeal against the decision to make an interim designation? The new clause allows a right of appeal against the interim designation, but there is little point in providing such an appeal unless it is heard speedily, given that the interim designation will last for only 30 days.

Secondly, the appeal will be decided by the judge, as I understand it, only on the basis of evidence which is disclosed to the subject of the order. Will the Minister reassure me that nothing in the amendments allows the judge on an appeal to have regard to evidence which is not disclosed to the individual—the problem in control order cases which led to the decision of the Appellate Committee in the case of AF?

[Baroness Noakes]

My Lords, the Government’s move away from the judicial review basis to a more natural appeals process for designations in their Amendment 57 is welcome. It shows that the Government have been listening to concerns about civil liberties in this Bill.

However, I have continuing concerns about Clause 22, and for that reason I shall speak in support in particular of Amendment 62 in the name of the noble Baroness, Lady Hamwee. Before I do so, I have a question for the Minister in connection with government Amendment 57, which sets up the new appeal process for designations. Am I correct that there is no provision for any appeal against the decision taken in the High Court or the Court of Session? Does it mean that the appeal process, so far as the designated person is concerned, ends there? I am not sure whether I mind one way or another, but I would be grateful to know what the Government’s position is on that.

I turn to the remaining decisions that will be dealt with under the terms of Clause 22. I accept that designations may appear to be the most important of the decisions the Executive will take in relation to the matters covered by the Bill, but decisions about licences are also vital for people who are designated. The licence regime will allow living expenses for those individuals, or possibly for the expenses they incur in order to carry on their business or trade. I spent most of the last 10 years on the Benches opposite arguing, in various circumstances, why people should not have to rely on judicial review when they get enmeshed in one Act or another. I argued strongly that judicial review is an unsatisfactory process for the citizen. That is because while the courts may well be expanding a little at the moment, typically they have involved themselves in or interfered with decisions of the Executive only where they are perverse in one way or another—perhaps because no normal decision-maker could have made the decision, the decision-maker took account of irrelevant facts or failed to take account of facts that were clearly relevant. Any civil servant worth his salt knows how to protect his Ministers from a judicial review challenge. Such a challenge is much more about form than substance, so I have never seen judicial review as something that gives the citizen much protection. If the person affected by a designation cannot convince the court that the decision was perverse in one way or another, there will no remedy at all.

The noble Baroness, Lady Hamwee, has alluded to the question of whether the court can vary the terms of a licence. If they fail to establish a perverse decision at judicial review, there will be no remedy, and if they could establish that a decision was perverse, which would probably be unlikely, there is then a question of whether any remedy is available at that stage or whether the matter has to go back to the Treasury for a further determination.

I hope that the Minister will reflect further on the Government’s position in Clause 22 and look again at whether the safeguards for those who are designated are adequate in those circumstances that go beyond the actual designation. It is good that we have moved to designations and it would be good if we could move a little further.

[The Archbishop of York]

My Lords, earlier I supported interim versus final designation, as the Government have proposed in their amendments. At the previous stage I also raised this question: when someone’s assets have been seized, how are they expected to bring forward appeals when they may not have any access to money to hire lawyers? We have been told that the final designation should be made by the Treasury and not by the High Court, which I would have preferred. There is wider resistance to this proposal, and I find the amendment persuasive. It provides that a designation,

“shall expire after 30 days unless confirmed by the High Court”.

That would help the person whose assets have actually been seized because they need to know what is going to be done. The appeal process comes much later, in the new clause to be inserted before Clause 22. Although it is helpful, again I do not think that it will cure the problem that I raised earlier in this Committee.

I feel that the Government have got to respond to this. What happens after 30 days? Does it continue? The person’s assets have gone and they perhaps cannot have access to lawyers, but it has been said that they could appeal under the new clause introduced before Clause 22 by government Amendment 57. However, that is a little too late because after 30 days, if it did lapse, only the court should say, “Yes, we are going to continue to make it as a final designation”.

In the absence of all of that, I would be very worried about our judicial processes. Although I believe the interim order is quite reasonable, as is changing to reasonable belief, but why should it be confirmed after 30 days unless a High Court confirms it? If not, the appeal, to me, comes too late in the process.

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[Baroness Noakes]

I have one question in connection with Amendment 51 in the name of the noble Lord, Lord Davies of Oldham, which seeks to insert “grant” into Clause 13. He suggested that the Bill did not contain any power for the Treasury to grant a licence. Could he say whether there is any other way of reading Clause 13, other than as saying that the Treasury may be able to grant a licence?

[Lord Sassoon]

Let us deal with that point. I am advised that Clause 13 gives all the power that is necessary to grant a licence. I am grateful to the noble Lord, Lord Davies of Oldham, for trying to help the Government by making sure that the power is in the Bill. However, I am assured, and my noble friend Lady Noakes confirms this, that Clause 13 grants that power.

I will address Amendments 7 and 10 more generally. There are some important issues here. Although the noble Baroness, Lady Falkner, did not spend long speaking to her amendment, she made an important point. These two amendments would clearly require the Treasury, when deciding whether to designate a person, to consider the UK’s international obligations to prevent terrorism. The Treasury would also be required to consider the humanitarian needs of persons affected by designations, including which licences should be granted immediately after the designated person is notified. The key international obligation is United Nations Security Council Resolution 1373, which requires all UN member states to freeze the assets of terrorists and prevent their nationals and persons within their jurisdictions making funds, resources or financial services available to them. However, it is left to individual member states to decide to whom the measures should be applied. The Government recognise that a decision to designate someone has a significant impact on their human rights. It is for this reason that designations can be imposed only where they are necessary to protect the public from a risk of terrorism.

It may be helpful if I explain the process that the Treasury goes through when designating someone. Decisions as to persons who should be subjected to terrorist asset freezes are informed by law enforcement and intelligence agencies, which prepare statements of case setting out the material that gives rise to a reasonable suspicion or belief that the person is or has been involved in terrorist activity, and why the freeze is necessary for public protection. When submitting their recommendations, law enforcement and intelligence agencies also provide a risk assessment framework to inform immediate licensing decisions by the Treasury, and ensure that designated persons are not deprived of access to funds immediately after designation and before the longer-term licensing needs of the person can be addressed. That is also informed by the risk assessment framework. Treasury officials and lawyers then scrutinise the statements of case and make recommendations to the Minister on how to proceed. Where a designation is envisaged, this will include recommendations on immediate licensing needs, in accordance with basic principles of good governance, to ensure that a designated person’s basic needs can be met.

It is important that the asset freeze is applied in a proportionate manner—managing the risk of funds being used for terrorism while ensuring that the human rights of the designated person are protected and that third parties are not adversely affected by the freeze. For this reason, several general licences have been issued—for example, to authorise legal aid to be made available for designated persons and to enable them to take out insurance. We have also made clear in Clause 12(3) that the payment of social security benefits to spouses is not caught by the prohibitions, even when they are made in respect of the designated person. Designated persons can also contact the asset-freezing unit to seek additional licences and to make additional representations in relation to their designation or licensing arrangements at any time.