Terrorist Asset-Freezing etc. Bill [Lords]

Keith Vaz Excerpts

Monday 15th November 2010 Commons Chamber

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

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

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

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

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

[Keith Vaz (Leicester East) (Lab)]

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

[Mr Hoban]

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

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

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

[Keith Vaz]

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

[Mr Hoban]

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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[Mr Hanson]

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

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

[Keith Vaz]

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

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

[Mr Hanson]

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

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

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

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

“in the interests of justice”,

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

“in the interests of justice”

means, what we define as being

“in the interests of national security”

and what

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

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

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

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

“been involved in terrorist activity”.

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

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

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

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

The Commercial Secretary to the Treasury said in another place that

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

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

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

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

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[Keith Vaz (Leicester East) (Lab)]

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

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

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

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

[Keith Vaz]

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

[Mr Llwyd]

No, I meant the Dangerous Dogs Act 19—

[Mr Deputy Speaker (Mr Nigel Evans)]

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

[Keith Vaz]

I give way to the leader of the Welsh nationalists.

[Mr Llwyd]

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

[Keith Vaz]

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

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

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

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

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

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

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

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

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

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[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.

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

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

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

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

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

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

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

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

[Keith Vaz]

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

[Mr Gauke]

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

[Keith Vaz]

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

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

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

[Mr Gauke]

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

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

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

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

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

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

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

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

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

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

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

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

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

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