Bank Bonuses

Julian Huppert Excerpts

Tuesday 11th January 2011 Commons Chamber

[Dr Julian Huppert (Cambridge) (LD)]

What progress has the Chancellor made in discussions about implementing a Tobin or Robin Hood tax either with other countries or alone?

[Mr Osborne]

The financial transaction tax is something that the international community is looking at and it is on the agenda for the G20 discussions. Almost everyone who looks at the idea accepts that it would have to be done internationally or else business would probably disappear overnight. It is on the international agenda and we are engaging in that discussion.

Terrorist Asset-Freezing etc. Bill [Lords]

Julian Huppert Excerpts

Tuesday 14th December 2010 Commons Chamber

[Dr Julian Huppert (Cambridge) (LD)]

I beg to move amendment 2, page 2, line 1, after ‘believe’, insert

‘on the balance of probabilities’.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

With this it will be convenient to discuss the following:

Amendment 3, page 2, line 27, clause 3, at end insert—

‘(aa) explain, as fully as possible consistent with the public interest in non-disclosure, the reasons why they are satisfied that the conditions in section 2(1) are satisfied.’.

Amendment 5, page 13, line 41, clause 28, at end add—

‘(5) In section 67(3) of the Counter-Terrorism Act 2008 (Rules of court about disclosure)—

(a) in paragraph (c) after “that”, insert “subject to paragraph (ca) below”; and

(b) after paragraph (c) insert—

“(ca) that in relation to a final designation, the material disclosed by the Treasury on which they rely is sufficient to enable each designated person to give effective instructions to a person appointed as a special advocate to represent that party’s interests;”.’.

Amendment 11, page 29, line 28, schedule 1, at end insert—

(fa) leave out rule 79.2.’.

[Dr Huppert]

I am delighted to move amendment 2, and to speak to amendments 3, 5 and 11, which are also in my name. They reflect recommendations from the Joint Committee on Human Rights, and Members might wish to see its more detailed report if they have not done so already. The amendments are all about ensuring proportionality and a fair hearing.

We should clearly be able to restrict funds that help terrorists in their activities, but people who are accused of such activities should not automatically lose their regular status in this country. We have a great principle in this country whereby a person is innocent until proven guilty; it is a great British tradition and one that we should support. We should also accept, however, that errors are made in legal processes, by the court and by Governments, and that is why we should have principles of fair hearing and high thresholds before we take state action.

Amendment 2 is about errors and the thresholds that we require. How can we be sure that the courts or the Treasury are making the right decision? How much error is acceptable? Various thresholds are already used for various decisions. We have the threshold of beyond reasonable doubt, which roughly equates to our saying that we do not accept even a 1% error—to the extent that we can attach numbers to it. Then, we have the civil standard, or the balance of probabilities, whereby we want to be sure that we are probably right. We want at least a 50:50 chance—in other words, with the balance of probabilities, we say that we want to be wrong less than half the time; we want to be probably sure that we are right.

If we go any lower with a threshold, we take steps—we punish people—when we say that we believe that they were probably not involved in the given situation. That is the consequence of a threshold below the balance of probabilities. None of us wants that, and none of us wants to take steps against people when we think that they were probably not involved in the first place.

I accept the principle of a lower threshold for interim designations. It is more akin to arrest, which takes place at a much lower threshold, but that is not the same as the permanent designation. I strongly urge the Government to reconsider their proposal. They should consider taking such steps against people only when the Treasury believes that they were probably involved, rather than on the basis of anything lower.

Amendment 3 is a simple requirement. A fair hearing must mean knowing the accusations—the reasons why the Treasury believes that somebody has been involved in funding terrorist activities. The amendment includes an important safeguard for public interest in non-disclosure, so damaging information would not come out, only that which we could afford to release. Again, I should have thought that we all agree with such a position.

During the Bill’s passage, the Government have said that, effectively, the amendment’s intention will be achieved but they do not want to see it in legislation. I am always concerned, however, about the principle that we should not write things into legislation but trust in the benevolence of Governments—this or any future Government. If the Minister will not accept the amendment, will he clearly commit to disclose such reasons subject to the public interest requirement, as the amendment says—even if that takes place in a non-legislative way?

Amendments 5 and 11 deal with the hearing itself. Section 67(3)(c) of the Counter-Terrorism Act 2008 puts a heavy weight on the principle of non-disclosure. Although that is an important principle, we must counter it with the principle of a fair hearing. Currently, the balance goes far too far in the direction of non-disclosure.

In the case of AF, it was held that similar rules are not appropriate to control orders, so I find it hard to see why the courts will not in time hold the same principle on terrorist asset freezing. There are more details on that reasoning in the Joint Committee’s report. The courts have yet to take such a decision, but surely as a principle it would be better not to go through costly legal action, but to save time by making the changes now.

There is a review of the use of sensitive material in judicial proceedings, and I welcome the fact that there will be a consistent approach. If the Minister will not agree to including such safeguards in the Bill, will he commit to the Bill being updated when the review is complete in order to reflect that consistent approach and to introduce a better system throughout those areas? I shall listen carefully to the Minister’s comments on all those suggestions, and I hope he takes on board what has been said.

[Mr David Hanson (Delyn) (Lab)]

I am grateful to the hon. Member for Cambridge (Dr Huppert) for introducing the amendments, which represent important issues that the Joint Committee on Human Rights considered. However, the Opposition believe that the test of reasonable belief is appropriate to the circumstances covered by the Bill. Indeed, I said so in Committee.

The tests for the asset-freezing regime are strict. In clause 2(1)(a)(i) to (iii), the Treasury has to consider real issues about the involvement of individuals in terrorist activity before such powers can be invoked. Those considerations are:

“(i) that the person is or has been involved in terrorist activity,

(ii) that the person is owned or controlled directly or indirectly by a person within sub-paragraph (i), or

(iii) that the person is acting on behalf of or at the direction of a person within sub-paragraph (i)”.

If we changed from reasonable belief to a situation in which the Treasury had to satisfy the balance of probabilities, as the amendment proposes, we would water down the ability of the Treasury and, therefore, the Government to take early action on the use of resources to finance terrorist activity in relation to the items detailed in clause 2. The asset-freezing regime must be preventive to be effective. One must be able to use it at an early stage to disrupt and prevent terrorist acts, and a threshold of a balance of probabilities would not enable the Government to act when action is needed.

The balance of probabilities test is applied by the courts in the context of civil proceedings and requires one party to demonstrate to the court that it is more likely than not that a particular fact is true. If that test were applied to asset freezing, it would require the Treasury and, indeed, the Minister to be satisfied and able to demonstrate to a court that a person is more likely than not to be, or to have been, involved in terrorism. That is too high a burden at the moment, because the burden of proof would rest with the Treasury.

If the Treasury brings forward proposals under this legislation in due course, I rest assured that it will have had solid grounds, from the intelligence and information provided to it, for doing so. If the picture were unclear, and an equally plausible argument could be made for an individual not being involved in terrorism, the Treasury would not be able to impose an asset freeze. That might put the constituents of Cambridge and, in my case, north Wales, or any constituent in the country, at risk of terrorist attack.

[Dr Huppert]

I am sure that the right hon. Gentleman knows of the existing power for an interim designation. It has a much lower threshold, so in emergency cases, such as those that he mentions, there would be no problem and we would be safe. I am delighted that he cares about the people of Cambridge so much, but the amendments are about longer-term designations.

[Mr Hanson]

Indeed, but I speak as somebody who in the previous Parliament was the Minister responsible for terrorist issues and policing. Those are serious matters, and the Government need to take action on them. There is always a balance to be struck between the civil liberties of individuals and the civil liberty of ordinary people to live their lives in peace without the threat of terrorist activity. On balance, my judgement is that we need to support the Government’s proposals in the Bill, which initially had its genesis in the previous Government, so that all measures are taken to ensure that the asset freeze can take place and action can be taken accordingly.

I understand the concerns of the hon. Member for Cambridge; they are valid and should be explored. However, in clause 26 there is a right of appeal for designation both at an interim and final stage. If an individual feels aggrieved, he can undertake to exercise that right of appeal. However, very few people will do so if the Bill becomes law, because the Treasury will have taken steps to ensure that those individuals are rightly in the frame, for the reasons that the asset regime has been introduced, and I trust the Treasury to take those actions; that is not something we say all the time but, on this occasion, I have done so.

I hope that the hon. Gentleman feels that he has raised the issues of concern. I am sure that the Minister will give, almost word for word, the exact response that I would give. I am happy to talk about the amendments in more detail, but my message to the hon. Member for Cambridge is clear: in the event of him pushing the matter to a vote, he will find not just the Financial Secretary against him, but the shadow Minister.

--- Later in debate ---

Let me return to my point about the Green Paper. It would also be wrong to adopt a piecemeal approach to this important issue. The issue of special advocates and the use of intelligence material clearly cuts across a number of areas. If we try to address these important issues ad hoc in individual pieces of legislation, we risk ending up with different requirements in different pieces of legislation.

[Dr Huppert]

Notwithstanding the answer that the Minister gave to the shadow Minister, if the result of the Green Paper process suggests that we should update the legislation in this respect, will he agree to do so?

[Mr Hoban]

In the context of this amendment, which seeks to affect the court rules, the court rules would be reinterpreted in the light of any action taken forward as a consequence of the Green Paper.

The Green Paper will ensure that such a coherent and consistent approach is taken to the use of sensitive material in judicial proceedings. Its timing should allow for judgment to be handed down in the lead case in relation to whether the judgment in the case of AF and others applies more widely than to stringent control orders—that is, in the employment tribunal case of Tariq. That case will be heard by the Supreme Court in January, and we expect a judgment in the spring.

As I said, it would be wrong to pre-empt the Green Paper. I hope that having heard my arguments, the hon. Gentleman will welcome and support the approach that we are taking and withdraw his amendment.

[Dr Huppert]

I thank the Minister for his comments and for the assurances and commitments that he was able to give. I continue to disagree with him about the standard that should be required, and I still find it concerning that we are not moving towards a balance of probabilities. However, I will not press the matter to a vote. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 31

Independent review of operation of Part 1

[Mr Hanson]

I beg to move amendment 1, page 15, line 25, leave out ‘a person’ and insert ‘the Independent Reviewer of Terrorist Legislation, as appointed under section 36 of the Terrorism Act 2006.’.

[Mr Hanson]

We had a good debate on this issue in Committee. It is my contention that if we are to create a post to review the operation of this Bill once it achieves Royal Assent, it makes eminently logical sense for the person who is appointed by the Treasury to review the legislation to be the same person as the one appointed by the Home Office under section 36 of the Terrorism Act 2006 to review terrorist legislation and its impact from the Home Office perspective. As the House will know, Lord Carlile is currently appointed to that position. He is independent of government; he has an office outside the Home Office as well as a secure office in the Home Office; and he provides an independent review of a range of issues, including control orders and other legislation under the 2006 Act. Clause 31 of this Bill allows for an individual to be appointed by the Treasury. In Committee, I tested the Minister on whether he had discussed with the Home Secretary the possibility of appointing the same person under clause 31 to review part 1 of this potential Act as is currently appointed by the Home Office to review legislation under the 2006 Act.

Whatever our agreements in Committee, there is also, I hope, an agreement that we do not want to see duplication of these roles. The role of reviewing whether a designation has been made fairly and is being operated fairly is the same as that of reviewing whether an individual’s control order has been judged and operated fairly. I accept that there are differences, as alluded to by the Minister in Committee, but in broad terms an individual appointed under clause 31 to review part 1 of this potential Act will be dealing with similar issues and similar evidence—sometimes evidence supplied by agencies within government—and undertaking similar assessments of the effectiveness and fairness of the operation of the legislation.

The current reviewer, Lord Carlile, will finish his tenure in that role very shortly. Mr David Anderson QC will be the new independent reviewer of terrorism legislation from, I think, 1 January next year. He has expertise in the European Union, in public law and in human rights. He is a Queen’s counsel of more than 10 years’ standing, and he is a recorder and a visiting professor at King’s college London. The skills that are required to review control orders under the 2006 Act are, in my view, the same as those required to review the provisions in this Bill. I am making this proposal because there could be synergy between the two posts.

I am equally interested—I know that the Minister will have a wry smile at this—in the costings and the operation of the parallel regimes in the event of the Minister appointing somebody different to review the provisions of this Bill when enacted. The Home Office supplies the reviewer with administrative facilities, office support and research support as needed. He has an independent private office in central London as well as secure rooms in the Home Office that he uses to deal with information to help him in his task. I question the need to establish a parallel regime with a separate person being appointed through a separate recruitment procedure and having separate offices inside and outside the Treasury, given that very often, and potentially even more so in this current age, the individual may be reviewing activities that impact on the same small group of people who are seeking to do harm to our citizens in the United Kingdom as a whole.

I would welcome an update from the Minister on my suggestion and on whether he has had an opportunity to talk to the Home Secretary about this matter. Has the Minister had an opportunity to consider whether the person who will be appointed under clause 31 should be the same person who is appointed by the Government to review Home Office legislation under the 2006 Act?

My amendment has been unduly twinned with the rest of the amendments in the group, which were tabled by the hon. Member for Cambridge (Dr Huppert). They relate to the method for appointing the reviewer—whether they are appointed as under my proposal or as under the Bill. The hon. Gentleman has again drawn on the report of the Joint Committee on Human Rights in proposing that the House of Commons should ultimately be the appointing body for the independent reviewer.

Unusually, I think that I will find myself agreeing with the Minister. Whatever my views on a range of issues, I cannot accept amendment 6, because the post of the independent reviewer must ultimately be a Government appointment. It reports to and supplies information to Ministers, and it is ultimately funded by the Government to provide that information. It is crucial, however, that the post is independent of Ministers. It reports to them, provides them with information and is funded by them, but it ultimately acts independently of them. It advises them and can cause difficult issues for them, because of its independence. If the post was appointed and supported by a resolution of both Houses of Parliament, it would be in a very different position from an independent reviewer of legislation.

Lord Carlile was independent. Never once did he ask me for information that he could not access appropriately. Never once was he compromised by Ministers, of whatever hue, in relation to his jurisdiction and duties. He has provided a fair assessment of the operation of the legislation to date.

I hope that the Minister reflects positively on amendment 1. I suspect that he will not support amendments 6 to 10, which were tabled by the hon. Member for Cambridge, because the independence of the post is crucial. If we tie it to the Minister or to the House of Commons, we will betray that independence and do a disservice to the role. If the Minister cannot give me good news on amendment 1, I hope that he can encourage me generally on the appointment. I look forward, also, to hearing the hon. Member for Cambridge speak to his amendments.

[Dr Huppert]

I will speak briefly to amendments 6 to 10, which come from the Joint Committee on Human Rights, on which I am privileged to serve. I agree with the right hon. Member for Delyn (Mr Hanson) that the key issue is the independence of the reviewer. The amendments seek to strengthen that independence, by ensuring that the reviewer is a creature not of Government, but of Parliament. Being nominated by Government and approved by Parliament would give the reviewer greater independence.

There is also a question of accountability. Who should hold accountability on behalf of the British public—Parliament or Government? Should the reviewer’s report go directly to Parliament, or should there be the potential for it to be filtered by Government? Although I accept that that does not generally happen, there is the potential for it to happen.

[Mr Hanson]

I ask the hon. Gentleman to consider that Ministers are accountable to Parliament. I rose because of his use of the word filter. When I was the Minister with responsibility for policing and terrorism, not once did I change a single word of a reviewer’s report to Parliament, even though such reports were produced ultimately by Ministers for this House. I do not expect that any other Minister would do so, because the independent reviewer would make a play of it and the relationship would be devalued tremendously.

[Dr Huppert]

Indeed, I was saying that I did not believe that that had ever happened, and I am grateful for the assurance that it never has. That shows exactly why amendment 6 makes sense. If no Minister would ever filter such reports, there should be no requirement for them to go through Ministers. That creates a potential filter that we hope will never be used. I hope that the Government simply agree with my position, so I will not labour the point. However, I doubt that the Minister will say that he agrees.

I will raise something that I mentioned on Second Reading, which might provide a compromise. As the Minister is aware, there is a recent precedent for Select Committees to approve independent appointments. That happened with the Office for Budget Responsibility and I hope that it will happen with other bodies. Perhaps the Minister will agree that it would be helpful for the reviewer to be confirmed by an appropriate Select Committee in a similar way, to ensure that there is certainty for Parliament as well as Government that the reviewer will perform their role properly and independently.

--- Later in debate ---

[Dr Huppert]

I have spoken on a number of issues already, so I shall be brief. I agree with the general sentiment that we must prevent terrorist activity and the funding that supports it. I would rather that we had seen a court-based system that was fair and safeguarded civil liberties in the ways that I tried to draw out, but I accept that that is not what we have. The system that I would like to see would provide the national security that we need while protecting the civil liberties that we deserve, but I accept that that is not the settled will of the House.

There is still one issue of detail that I would like to explore. Clause 25(1) contains the fascinating phrase:

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

Let me give the Minister a further chance to comment. Could he perhaps reassure me that that phrase is not intended to mean that the Human Rights Act 1998 and common law rights would not apply? That is one possible reading of it. I believe that that is not the intended meaning, so can he assure me that the Human Rights Act and common law will remain sovereign? If he wants to say that, I shall be delighted to let him intervene.

In the meantime, while the Minister reads the clause, let me reflect on what the Bill does. It is interesting to consider the scale of the problem. There was a statement from the Minister on 23 November about how many accounts had been frozen—a total of 205 accounts as of 30 September, containing less than £290,000. Although terrorist activities can be carried out on relatively small sums of money, we should be clear with ourselves and with the public about the amounts that are involved. Of that £290,000, only £140,000 would be covered by the Bill, as it was covered by the predecessor legislation. That is a relatively small amount although it can, of course, have a large effect.

The Bill is not as good as it could be and that is a shame, but it is a lot better than its predecessors. I welcome that fact and the effort that the Government have made to accept amendments in the other place, if not here. I am happy to see it pass its Third Reading.

Question put and agreed to.

Bill accordingly read the Third time and passed, with amendments.

[Mr Gerry Sutcliffe (Bradford South) (Lab)]

On a point of order, Mr Deputy Speaker. The House was due to have the opportunity to discuss the Lords amendment to the Identity Documents Bill, but I understand that Mr Speaker will not allow that to happen because of the lack of a money resolution. Will we have any opportunity to debate what the Lords have said about the fairness of ensuring that those people who bought identity cards can have some compensation?

Terrorist Asset-Freezing etc. Bill [Lords]

Julian Huppert Excerpts

Monday 15th November 2010 Commons Chamber

[Mr Hoban]

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

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

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

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

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

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

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

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

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

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

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

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

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

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

[Dr Julian Huppert (Cambridge) (LD)]

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

[Mr Hoban]

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

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

[Dr Huppert]

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

[Mr Hoban]

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

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

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

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

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

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

or

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

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

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

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

[Dr Huppert]

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

[Mr Hoban]

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

--- Later in debate ---

[Mr Hanson]

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

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

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

[Dr Huppert]

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

[Mr Hanson]

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

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

--- Later in debate ---

[Dr Julian Huppert (Cambridge) (LD)]

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

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

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

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

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

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

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

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

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

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

[Matthew Hancock]

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

[Dr Huppert]

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

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

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

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

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

“commit or attempt to commit terrorist acts”.

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

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

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

[Keith Vaz]

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

[Dr Huppert]

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

[Matthew Hancock]

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

[Dr Huppert]

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

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

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

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

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

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

“Improper use of public electronic communications network”.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

--- Later in debate ---

[Guy Opperman]

rose—

[Dr Huppert]

rose—

[Kerry McCarthy]

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

[Kerry McCarthy]

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

[Dr Huppert]

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

[Kerry McCarthy]

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

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

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

--- Later in debate ---

[Mr Gauke]

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

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

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

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

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

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

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

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

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

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

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

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

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

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

[Dr Huppert]

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

[Mr Gauke]

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

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

[Dr Huppert]

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

[Mr Gauke]

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

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

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

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

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

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

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

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

[Mr Gauke]

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

[Dr Huppert]

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

[Mr Gauke]

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

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

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

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

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

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

Question put and agreed to.

Bill accordingly read a Second time.



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

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

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

Committal

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

Proceedings in Public Bill Committee

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

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

Consideration and Third Reading

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

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

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

Other proceedings

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

Question agreed to.



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

Queen’s recommendation signified.

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

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

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

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

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

Question agreed to.

Oral Answers to Questions

Julian Huppert Excerpts

Tuesday 12th October 2010 Commons Chamber

[Mr Osborne]

I advise the hon. Lady to look at the market interest rates of Spain and the United Kingdom, which were the same at the time of the general election. In Spain, they have hardly fallen at all, but they are 1% lower in the United Kingdom. That is a real boost to businesses.

[Dr Julian Huppert (Cambridge) (LD)]

Is the Chancellor aware that the Treasury is the only large Department that does not have a chief scientific adviser? Does that say anything about its interest in and understanding of science, and will he appoint a chief scientific adviser?

[Mr Osborne]

I assure my hon. Friend that I have received plenty of advice—public and private—from the nation’s scientists.

Budget Resolutions and Economic Situation

Julian Huppert Excerpts

Thursday 24th June 2010 Commons Chamber

[Ms Eagle]

I agree, and during an earlier part of my speech I listed all those people as being among those who had things to apologise for, as the hon. Gentleman will see if he reads the record.

In the prelude to the Budget, other preposterous myths have been peddled, designed to justify an austerity programme so severe that it is positively, even gleefully, sadistic. I will just mention one of them in passing. The myth says, “It’s all much worse than we thought.” We have heard the Prime Minister, the Deputy Prime Minister and the Chancellor all singing that refrain in recent days. They had prepared the ground, they had the newspapers all going along with it, and they had briefed their Back Benchers, who are even now loyally parroting the line. How irritating for them, then, that the facts have failed to conform to their prearranged narrative, and how positively annoying that the Chancellor’s new forecasting quango—the pejoratively named Office for Budget Responsibility—should so comprehensively give the game away just before the main show. It quickly became clear that, far from all this being much worse than we thought, it was actually better:

“embarrassingly, the economy is just not playing along. Things just keep getting better.”

I was quoting Fraser Nelson—that well known socialist writer—from the Telegraph.

[Dr Julian Huppert (Cambridge) (LD)]

Will the hon. Lady give way?

[Ms Eagle]

The hon. Gentleman has not been here all day, so I will not give way to him.

In the pre-Budget report, Sir Alan Budd was obliged to point out that my right hon. Friend the shadow Chancellor was being too pessimistic—those who know him are not always surprised by that—and that on almost every measure, the public finances are in better, not worse, shape than we expected at the time of the March Budget. Unemployment, Sir Alan revealed, would be 200,000 lower than expected, and tax revenues would be much stronger than forecast. Thus the borrowing forecast was £8.4 billion lower this year than predicted in March, and £22 billion lower by 2014-15.