European Organization for Astronomical Research in the Southern Hemisphere (Immunities and Privileges) (Amendment) Order 2018

Debate between Lord Ahmad of Wimbledon and Lord McNally

Wednesday 9th May 2018 Grand Committee

[The Minister of State, Foreign and Commonwealth Office (Lord Ahmad of Wimbledon) (Con)]

My Lords, I am sure that I speak for myself and the noble Lord, Lord Collins—perhaps more for him than for myself. I am sure that he saw a captive audience at the back of the room; he was very impressed by the fact that we would have someone looking in. That was quickly diminished because, as noble Lords can see, the captive audience is made up of my officials.

I welcome the noble Lord, Lord McNally, and my noble friend Lady O’Cathain to the debate. It is good to hear that this issue has interest in it. The order is interesting. As the noble Lord, Lord Collins, will no doubt remember, the order was laid before the House on 29 March. It amends the European Space Agency (Immunities and Privileges) Order 1978 and the European Organization for Astronomical Research in the Southern Hemisphere (Immunities and Privileges) Order 2009. I am sure that those orders are well-known to my noble friend Lady Goldie.

I start with the importance of the space sector. The European Space Agency and the European Organisation for Astronomical Research—also known as the European Southern Observatory, or ESO—are both important to the UK. We contribute more than £20 million annually to the ESO budget, for a share of just over 16%. We also contribute more than £300 million to the European Space Agency, making the UK the fourth-largest contributor. We are one of only six countries to host a European Space Agency, at the European Centre for Satellite Applications and Telecommunications in Harwell, Oxfordshire. This centre is a vital part of our strategy to develop the UK space sector—an area I know well from my time as a Minister at the Department for Transport. This is an important sector for the development of the UK economy in the future. The centre provides a focal point to showcase UK capability and partnerships. Working in partnership with the ESA, we are planning to develop an extension to our Oxfordshire campus which will house a meeting and exhibition space and a new conference centre. This will provide benefits not only to the space sector but to all sectors involved in the use of satellites, which currently contribute £250 billion to the UK economy. The space sector offers significant research and economic opportunities for the United Kingdom. British academics and businesses working in the sector are recognised internationally as leaders in the field and are in a strong position to take advantage of those opportunities.

I turn to the details of the order as it relates to each organisation. I turn first to the European Space Agency, established by a convention in 1975. The United Kingdom acceded to the convention and joined the agency the same year—although we had been collaborating with other European countries in this field for some decades before that. In 2013 we welcomed the European Centre for Space Applications and Telecommunications to Harwell in Oxfordshire. This order amends the European Space Agency (Immunities and Privileges) Order 1978, which afforded privileges and immunities to agency staff and high ranking officers. The revision confirms the immunities and privileges to which staff are entitled and the number of high-ranking officers that the UK will recognise.

Specifically, it confers the status of high-ranking officer on the head of the Harwell centre, and also provides for the ESA director-general and a maximum of seven further members of staff working at the centre to be considered high-ranking officers. This means that they are entitled to certain privileges and immunities, including exemptions from social security contributions. They are not, however, entitled to immunity from suit or legal process, except for actions carried out during their official functions or inviolability of residence. These high-ranking officers play a significant part in shaping ESA policy, and are world leaders in their field. The presence of high-ranking officers at the space centre in Harwell strengthens our capability and credibility and is crucial for the growth of the UK space sector and for attracting inward investment.

I want to reassure noble Lords that the privileges and immunities afforded to officers of the agency are limited to those that are required for them to conduct official activities. They are in line with those offered to officers of other international organisations of which the UK is a member.

If I could perhaps pre-empt questions before they are asked: leaving the European Union will have no direct impact on the UK’s membership of the European Space Agency. The ability for UK staff to work effectively for the organisation before and after the UK’s departure from the European Union is controlled by our adherence to legislation that accurately reflects the convention and its protocol and the privileges and immunities it affords to staff.

I now turn to the European Organisation for Astronomical Research in the Southern Hemisphere. The Committee may recall that some of the provisions of the order that relate to that organisation were debated in this House early last year. That earlier version of the draft order exempted only high-ranking officers of ESO from social security contributions. Having reconsidered the position, my department came to the view that we can properly exempt all members of staff from these contributions. We regret that this issue was not addressed fully during the debate on this order on 30 March last year. Rather than continuing with the 2017 draft order and amending it in short order, we have decided it would be better to lay this further amending draft order and to include in it the new provisions in relation to the ESA, which were not contained in the 2017 draft order. I beg to move.

[Lord McNally]

My Lords, I address the orders, which I welcome and see as perfectly sensible for international organisations. I have two particular points. Yesterday, we debated in the House how Parliament will deal with the tsunami of SIs that are coming our way as a result of Brexit. As the Minister has just done in his conclusion, I draw attention to the fact that these orders contain three apologies for errors in previous orders and two corrections. This is a fairly simple, straightforward endorsement of the workings of multinational organisations in our country and abroad. There were five mistakes in one SI. With the best intentions in the world, we have to look at the real problems we will have in dealing with statutory instruments and the need for accuracy and effectiveness.

I can see a little scepticism in the room about me talking about the space industry. That is one of the great things about being in the House of Lords. I served as one of the main spokespeople for the party on the Space Industry Bill. We greatly enjoyed taking it through, but I immediately started getting letters that began with, “As an expert on the space industry”. I am not an expert but I should declare that my son, James, is a space engineer working in Munich for a Franco-German company.

My views are all my own and they impinge on the way in which the Minister introduced these orders, with reference to the space industry. I agree with the Minister that the prospects of the space industry are among the most exciting that face us. I am very proud that, under the coalition Government, the noble Lord, Lord Willetts, and Vince Cable did a lot to reinvigorate the space industry. I am reading Ken Clarke’s memoirs at the moment. He talks about the 1980s, when he was in the DTI, and how he and most of his colleagues had little interest in the space industry as a growth industry for the future.

Now, it is the exact opposite. There is tremendous excitement and a great deal of potential there. The Government have done a lot of good things since 2015 to carry the industry forward. I understand that the legislation covering the European space industry and other international commitments relating to space has nothing to do with our membership of the European Union. As I said, my son works in a Franco-German company; he works with Poles, Italians, Germans and the French as well as Brits. It stretches credulity not to imagine that an organisation such as that, which depends so much on international co-operation, will find it more difficult outside the EU to partner.

Space ports are a good example. When Europe looks for its space port, I wonder whether the Scottish, Welsh or Cornish bidder will have a better chance than the Portuguese when Europe makes its decision. It is the same with Galileo: we have already seen the removal of one of the Galileo preparatory units from Portsmouth back to mainland Europe. We have to face the fact that what is a very exciting industry will have some question marks over it, because of the decision on our membership of the EU. I once saw a very interesting documentary about what is going on down in Chile—although the ESO headquarters are in Munich, not where my son works, its main work is of course down in Chile. The documentary showed that it is exciting and right at the cutting edge of space exploration.

My only words to cloud this optimism is that I remember very clearly where I was 50 years ago, when man landed on the moon. Those of us who were alive then could not imagine that, 50 years later, we would have made so little progress in space exploration. On the other hand, my father, who was born in 1899, used to talk about how, as a boy growing up in Liverpool, he remembered seeing the first aeroplanes flying and what happened to flight in the 20th century. What I learned from the Space Industry Bill is that the space industry is probably where they were in the early 20th century and that it could make similar amazing progress. Along with that, the progress regarding satellite technology, deep space probes, the mining of asteroids and so on are on the agenda of our scientists and could make a massive difference to the century ahead.

I support the passage of the regulations, but I just give those two gypsy warnings about the difficulty of dealing with the SI tsunami that we face and the problems of making our space industry viable outside EU partnerships. Again, some of us are old enough to remember Blue Streak and other adventures into space and that going it alone did not work.

[Lord Collins of Highbury (Lab)]

My Lords, I know it is late in the day, so I will try not to bang on too much. I must admit, I did not expect to be making this speech again; as one of my brothers in the trade union movement used to say, it is déjà vu all over again. I do not know whether the Minister has had the opportunity to read the Lords Hansard from the last time we had this order but, if he has not, I will remind him of some of the contributions that I made. One mistake I made the last time we debated this order is that I managed to speak without saying the words, “the European Organisation for Astronomical Research in the Southern Hemisphere”. I realised this because, when I was searching for my last contribution using the Hansard search facility, it did not bring up my contribution, as I had managed to not say those words. So, for the record, I have said them now, so that just in case we have to return to this subject again, I know I will be able to find it.

I appreciate the contribution made by the noble Lord, Lord McNally, and I share his sentiments completely, and those of the Minister, about the importance of this. It is, strictly speaking, a sort of HR issue. This is about how we are going to treat employees of this organisation in accordance with an international treaty. I do not object to that—it is quite proper and should be done.

The concern I have is that this relates to a convention from 1962, according to the noble Baroness, Lady Goldie. We may be talking about other issues, but the protocol that we agreed to in the 2009 order—which took effect in 2012—and which we were talking about last March, was discovered to be defective in June 2014. There was a considerable period of time when this error went unnoticed but we now have to return to the subject. Last time we discussed it there were 40 employees: 38 in Chile and two in Germany. What is the score now? How many people are we talking about? What has been the impact of this error? Have people suffered a detriment? What is the cost to those individuals? If there has been a cost or a detriment to these individuals, what is the Foreign Office doing to address that? Will there be some form of retrospection?

When the Minister, Sir Alan Duncan, wrote to me, he acknowledged the parliamentary time that had been taken up and he regretted that it had been wasted. I accept that errors and mistakes happen, but this order has had a rather unfortunate journey, and I think we need an explanation. We need an assurance that things will be put right, and that the error has not resulted in people suffering a detriment. It may be that over this period of time, people have gone into and out of employment, which may complicate matters even more. I do not want to put too many onerous questions to the Minister. We have had a busy day already and are at the final hurdle but I hope that he will be able to answer me. The noble Baroness, Lady Goldie, was unable to answer me last time but I am hoping that the Minister will be able to on this occasion.

Sanctions and Anti-Money Laundering Bill [HL]

Debate between Lord Ahmad of Wimbledon and Lord McNally

Wednesday 17th January 2018 Lords Chamber

[Lord Ahmad of Wimbledon]

My Lords, I thank all noble Lords who have taken part in this debate. Let me say at the outset that between Committee and Report we have considered many matters raised by noble Lords. I listened very carefully to the points made by the noble and learned Lord, Lord Judge, and others, although I felt at one point, after hearing the contributions of my noble friend Lord Hailsham and the noble Lord, Lord McNally, that I should be handing over the Bill file to my noble friend Lord Young. I notice that he has escaped before I could avail myself of that opportunity.

[Lord McNally]

When the Whips desert you, you are in real trouble.

[Lord Ahmad of Wimbledon]

I am sure, though, that the noble Lord will agree that I have a very formidable Whip to my left. I am delighted to be joined by my noble friend Lady Goldie, who I can assure noble Lords is very well equipped in the robust defence of the position and policy. However, I am sure noble Lords will understand that I cannot accept this amendment but I will offer some comments in this regard.

First, the power in the Bill is not unusual. It is worth noting, indeed, that the Delegated Powers and Regulatory Reform Committee, in its report on the Bill, made no comment on the inclusion of this delegated power. However, I recognise that the House has concerns, reiterated today, about the breadth of the regulation-making powers conferred by the Bill and I hope I can provide some reassurance that this particular consequential power is both appropriate and necessary. Importantly, the power can be used only to make savings provisions or other provisions that are consequential, supplemental, incidental or transitional to the sanctions or money laundering regulations. I assure noble Lords that it does not confer the power to make any changes to legislation that are independent of the sanctions and money laundering powers. It provides a tool to make changes to ensure that the statute book works but it does not give the Government the ability to change swathes of legislation without regard to that specific purpose.

Specific questions have been raised in this respect and, rather than detain the House, I shall offer those reassurances at this point. The noble and learned Lord, Lord Judge, and my noble friend Lord Hailsham both raised the issue of the substance. I believe the phrase, which is not the most legal of terms I have heard from the noble and learned Lord, was “nothing to bite on”. I will look up the constitutional books in that respect, but of course I understand the substance of his point. Let me assure the noble and learned Lord that the regulations in the Bill can be made only for the purpose set out in the Bill and impose sanctions of the type set out in the Bill. This clause permits only amendments consequential on the types of sanctions imposed for these particular purposes.

The noble and learned Lord also made a general point about Henry VIII powers. I assure him that they are there to serve a real purpose: to enable Ministers to make the necessary updates to the statute book that arise solely as a result of the sanctions and money laundering regimes.

My noble friend Lord Hailsham raised the list of uses of this power. I assure him that this can be used only to make amendments that arise as a consequence of the imposition of sanctions or rules against money laundering and not to make free-standing changes; for example, to change rules of evidence in an unrelated case. Finally, the noble Lord, Lord Pannick, rightly raised the issue of the courts and scrutiny, and how courts will police the use of these powers. I can say on behalf of the Government that we welcome and respect the scrutiny of the courts: they act, indeed, as a check on Ministers, as a useful safeguard which I hope will also reassure noble Lords. I hope that the assurances I have given have added clarity in the context of the powers in the Bill and shown that they are appropriately limited to what is deemed necessary. On the basis of this explanation I hope that the noble and learned Lord will feel able to withdraw his amendment.

Sanctions and Anti-Money Laundering Bill [HL]

Debate between Lord Ahmad of Wimbledon and Lord McNally

Committee: 4th sitting (Hansard): House of Lords
Tuesday 12th December 2017 Lords Chamber

[Lord McNally]

My Lords, these exchanges show some of the dilemma of dealing with this issue. I ask a fairly simple question when I look at these things. Why should a financial services organisation decide to base itself on some microdot in the Caribbean to provide its services? Once you ask that question, you begin to wonder whether it is to avoid the kind of rigour and inspection that they get in more well-established centres. As I said in my earlier intervention, I worked for three years with the Crown dependencies, ably aided by the Minister, in his then capacity as a Whip. I made two points. One, which I mentioned earlier, was my advice to them to make sure they answered the various questions put to them with full candour and transparency. I pay tribute to the Justice Committee under the chairmanship of my noble friend, who put forward a range of suggestions. Another point was that the British Government should get their act in better order. Sometimes, the job was to make sure that, when getting this dealt with, Whitehall departments were sufficiently accessible and aware of the particular status of the Crown dependencies.

During those three years of experience, I was impressed by the qualities of the Civil Service and the representatives of the Crown dependencies in dealing with these issues. That does not take away the fact that they, and we, have to face the fact that, as the noble Lord, Lord Collins, said, it is our reputation that is at stake. I had nothing to do with the overseas territories, but there is a qualitative difference which needs to be looked at between their standards of supervision of financial services and those of the Crown dependencies. I take the point made by the noble Lord, Lord Anderson, about the Isle of Man and Jersey. I hope they are both addressing what it is that has landed them on that list. That is something for their processes, because this is damaging to them, although there may be other jurisdictions within the EU which could not bear too close examination.

This is in our national interest. It is not us playing the neo-colonial or trying to order them about. We are defending our national interest when jurisdictions are seen as British Overseas Territories. When I had to learn that very peculiar lesson, the first thing I was told was that we joined them; they did not join us. The difference in constitutional relationship is because they were part of the Duchy of Normandy that conquered us. Nevertheless, the Channel Islands and the Isle of Man have to understand that their meeting the highest standards is going to be a legitimate interest of the British Parliament and British Government, in defence of Britain’s reputation.

[Lord Ahmad of Wimbledon]

I thank all noble Lords who have taken part in this important debate. As we have heard, the UK is responsible for the foreign affairs and security of both the Crown dependencies and overseas territories. That is the constitutional position. Our long-standing practice is that we do not generally legislate for these jurisdictions without their consent. This point was well made, in the context of the Crown dependencies, by the noble Lord, Lord Beith. Sanctions are tools of foreign policy, or are used to protect our national security. It is clear that the overseas territories and Crown dependencies must follow the UK Government’s foreign policy, including the sanctions we apply. I assure noble Lords that the Foreign Office has discussed this with the overseas territories and Crown dependencies and they also accept this central point of principle.

There are currently two ways in which sanctions are implemented by the overseas territories and Crown dependencies. The UK legislates directly for the majority of these jurisdictions through Orders in Council. Other jurisdictions legislate for themselves, but follow precisely the sanctions implemented in the UK. This model is well established and respects the rights of these jurisdictions.

The Bill is drafted in a way that reflects this reality. It is consistent with the current implementation model for UN and EU sanctions as well as measures under the Terrorist Asset-Freezing etc. Act 2010. It allows those jurisdictions that wish to follow UK sanctions through their own legislation to continue to do so. It also allows the UK to legislate directly for certain overseas territories as appropriate.

With regard to anti-money laundering laws, all the Crown dependencies, and each of the overseas territories with a significant financial centre, subscribe to the international standards for anti-money laundering and counterterrorist financing set by the Financial Action Task Force. They are assessed in their own right for compliance with these standards and have responsibility for implementing them within their own domestic frameworks.

The Government, of course, retain an interest in ensuring that the Crown dependencies and overseas territories have robust anti-money laundering regimes. As noble Lords are aware, and as I stated in a previous debate—this point was raised with the overseas territories at the recent joint ministerial council—we are already working very closely with those jurisdictions which do not already have national company beneficial ownership registers on establishing such registers or similarly effective mechanisms, and ensuring that information held on these can be shared in near real time with UK law enforcement authorities.

I remind noble Lords that we legislated earlier this year, through the Criminal Finances Act, to establish a statutory review of how these arrangements have been implemented. This will take place before 1 July 2019 and will inform any further debate about the effectiveness of measures relating to beneficial ownership in place in individual Crown dependencies or overseas territories. We should also recall that full implementation of these arrangements will put these jurisdictions ahead of the international standards in this area, and ahead of the approach taken by many G20 countries and individual states of the United States.

This demonstrates the benefits of the co-operative relationship that we have established with the Crown dependencies and overseas territories in combating money laundering and terrorist financing. These jurisdictions are self-governing and take their compliance with the FATF standards very seriously. The anti-money laundering regimes of each of the Crown dependencies have been evaluated since 2015, with overseas territories, including the Cayman Islands and the British Virgin Islands, both scheduled to be evaluated in the coming year. The commitment of these jurisdictions to international standards in this area is the best way to ensure that they continue to have robust anti-money laundering and counterterrorist financing regimes. As I said in the previous debate in Committee, this is a point we have once again emphasised in all our communications, and it was emphasised by my right honourable friend the Prime Minister in her recent meeting with the overseas territories. These are long-standing arrangements.

The noble Baroness and the noble Lord, Lord Collins, talked about progress and moving forward. We are moving forward positively and I have already talked about the results. In this regard, I do not believe that these amendments are needed. I am sure noble Lords would not wish to jeopardise the achievements that we have seen thus far, which have come from direct co-operation and working with these jurisdictions, and the progress that has already been made. With that, I ask the noble Lord to withdraw his amendment.