Terrorist Asset-Freezing etc. Bill [HL]

Lord Davies of Stamford Excerpts

Wednesday 6th October 2010 Lords Chamber

[Lord Sassoon]

I do not believe that the rules about what evidence can be brought before the court are in any way changed by what we are proposing from the conventions that apply. It relates in some way to the point that the noble and learned Lord made about the nature of the evidence that should be there before an order is made. The noble and learned Lord, Lord Lloyd of Berwick, quoted one Supreme Court justice; I could quote others but perhaps I should not detain the Committee. I might have referred to that at Second Reading. The noble and learned Lord, Lord Rodger, has in some of his remarks expressed a different view about the nature of the supporting evidence in order to support very much a preventive approach to this regime.

[Lord Davies of Stamford]

Following the point just made by the noble and learned Lord, Lord Lloyd, if the Bill were to place the responsibility on the Treasury not to designate but to seek an ex parte decision by a judge to designate, would that hearing not be held in camera? In those circumstances, would it not be possible to provide, for example, evidence from the security services, such as SIS and GCHQ, without any danger to national security?

[Lord Sassoon]

The issue here, as the Government see it, is to get a workable regime that is able to respond flexibly and appropriately and can be a preventive regime. The balance we have struck between a limited period when the evidence can be used to support a ministerial decision on the basis of reasonable suspicion, followed by the reasonable belief with the appeal to the court, is the right one. There are different ways of doing it which would entail various ways of the court looking at it. I come back to the fundamental point—my noble friend Lord Carlile of Berriew has absolutely gone to the heart of this. While we could debate alternative ways of doing it, in striking the balance it is appropriate to have a ministerial decision, with the person designated able to challenge it through an appeal process in the court.

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[Lord Davies of Stamford]

The Minister is answering me by saying that the balance is in favour of the Treasury route because it is a more appropriate route, which is slightly circular. Can I establish what exactly it is that the Government feel is in the route’s favour? What are the decisive criteria in favour of taking the route that they suggest? Is it a matter of time? Is the noble Lord suggesting that it is a matter of time because Ministers could take decisions more quickly than a judge could grant an ex parte injunction or designation? If not time, what other specific considerations does the noble Lord have in mind?

[Lord Sassoon]

Ultimately it is the responsibility of the Executive to make these orders. They have the operational information at their disposal. Yes, the orders can be made very quickly. Fundamentally this is an appropriate action power of the Executive, with checks through the courts. That is the way it has operated to date, with the important exception that we are strengthening both the test that Ministers have to apply and the ability to challenge decisions through the courts. I take to heart the words of the noble Lord, Lord Myners, as a Minister who was involved in implementing the regime. He graciously said that the new construct provides a better approach than the one in the previous legislation. I take that very much to heart from a former Minister who is used to making these difficult judgments, which have to be made.

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Debate on whether Clause 2, as amended, should stand part of the Bill.

[Lord Davies of Stamford]

My Lords, I will make two points. The first relates to the issue that we have been debating, about which I am far from satisfied; that is, the merits of having a process under which it is the Treasury—and therefore Treasury Ministers on the advice of Treasury officials—which designates someone for the purpose of the Bill, and not a judge sitting in chambers acting on an ex parte request or application. The noble Lord, Lord Sassoon, has been extremely conscientious in answering all the points that were put to him this afternoon and I make no personal complaint about that at all. However, I repeat the point that I put to him as I was not satisfied with the response. He still has not revealed what actual practical, substantive advantage there is in having a Minister rather than a judge take responsibility for this initial, crucial act of designation. This is an enormously important matter. If there were strong pragmatic reasons relating to national security and the defence of the lives of individuals, I would be the first to say why we have to take certain action which is unpleasant and unattractive in terms of our civil liberties and why we sometimes have to strike a balance. However, those merits have not been argued and that substantive point has not been put forward and I am still completely in ignorance as to why the Minister has gone down this route rather than another.

We can always speculate and say that Ministers are always inclined to give themselves extra powers whenever they can, that that is a natural instinct of government and that I am being naive in not recognising it. That is a possibility but I tried to help the Minister by suggesting that it might be a question of time. Sometimes time is of the essence in these terrorist cases. Information might come from some source or other which has to be acted on very quickly, say in half an hour, and there is not time to apply to a judge. I offered the Minister that argument if he wanted to pick it up, but he decided not to do so. Perhaps he will now pick it up in responding to me. If he will not do so, may I ask him to deliver another convincing argument—a practical, substantive argument—not just a circular evasion such as saying that it would be appropriate, a right balance or something of that kind? We need to know that, for reasons of principle and practice. I have always been brought up to believe that in a free society any decision expropriating, encumbering, seizing or freezing the property of an individual could properly be made only by the judiciary, not by executive action. I think that is a principle to which we are all attached in this country and in any free society worthy of the name. It can be overridden only for very strong reasons. Therefore, we need to hear those strong reasons.

I also put forward pragmatic points, which are subsidiary and not quite so important, in favour of the judicial route. One is that, however thorough and conscientious the Minister and his officials are in these matters—I am sure that they are—they would be even more alert and thorough in their preparation if they had to go before a judge. Life is like that. The other pragmatic reason has been put in different ways in the House this afternoon. For an individual, a designation order of this kind is obviously a catastrophe. He or she may well stand to lose his or her employment—that point has already been made—but I think of someone who runs a business and suddenly finds that he cannot pay his suppliers or staff or pay back bank loans or something like that while the order is in force. He will certainly face a delay in making contractual payments while he perhaps appeals the designation or applies for a licence. Therefore, an individual may suffer a long-term and serious penalty if he is the innocent victim of an unduly hasty designation. That should make us all pause very strongly. I accept that the Government’s very welcome concession on appeals rather than judicial review means that there would be less time to wait before an appeal takes place. God knows, judicial reviews last a very long time indeed. Nevertheless, as has been pointed out, the waiting time would be a great deal longer than 30 days and would probably last some months. Therefore, it is important that there is an opportunity for a judicial sight of the issue without waiting for the appeal procedure to be triggered.

I shall not pretend to the Government that I am inclined to vote against the clause even if I am not totally satisfied, because I have been entirely undercut by my noble friend the other Lord Davies, who has told me—this was news to me—that the previous Government, of which I was honoured to be a member, accepted the principle that decisions in this area should be made by executive power rather than by judicial decision. My responsibilities in the Government were in very different areas and I did not have the faintest idea at that time that this issue was being debated or decided in that way or any other. As I may be deemed to have collective responsibility for the decision that was taken, although I never said anything about it at the time, it would clearly be rather cynical or opportunistic of me to start making a big issue about it after the event. Nevertheless, I hope that the noble Lord will think that my points deserve a substantive and considered response. I greatly look forward to that.

The other points I want to raise specifically in relation to the text of the Bill are those that I made in general terms on Second Reading about piracy, the hijacking of ships and aircraft and the kidnapping of individuals. As I made clear on Second Reading—no one contradicted me and, indeed, we all know that this is the case—there is a very serious practical problem at present in the Gulf of Aden. We hear about it in the media only when British ships or British nationals are hijacked or abducted. That has happened, although not in recent weeks. However, it is a very common occurrence for ships and their crews to be abducted. I am told by underwriters in the City of London that it is now a regular business for ship owners and their underwriters to pay millions of pounds in ransom money to these particular terrorists, as I call them. That is a very unfortunate situation. Those terrorists or hijackers face no real physical risks at present. They have learnt that the rules of engagement under which NATO and the EU naval forces deploy in the area mean that they will not get fired on if they do not fire in the first place. Therefore, there is very little physical downside from their point of view. There is absolutely no financial downside whatever—that is, of course, the critical point for this debate—as they can quite legally receive and hold these ransom moneys and, indeed, people can legally pay them the ransom moneys. This is an extraordinary situation in which we as taxpayers are paying for these naval forces in the Indian Ocean to try to protect world shipping and the freedom of international trade. We are putting our men and women at risk on Her Majesty’s vessels in that cause, which I believe is a good cause. Yet we are allowing these malefactors who are carrying out these hijackings to receive this money with impunity and enjoy it. This is contributing strongly to the destabilisation of Somalia and is relevant to what I am coming on to in a moment—not least to its appalling consequences for the individuals concerned and the systemic damage to international trade and so on that I have just mentioned. That is because the money received is paying for warlords, the purchase of arms, the bribing of politicians and judges, and the destruction of any stability in that country. It is a very bad story. The western world is simply sitting idly by and watching this money flow to these people.

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[Lord Sassoon]

First, I should say that I am grateful to the most reverend Primate. If we have managed to raise a bit of fog through the combination of a probing amendment and a bit of detail from me, and be reminded that we are meeting part of the test in Magna Carta, we will have spent a worthwhile hour or so. He also answered rather eloquently part of the further challenge from the noble Lord, Lord Davies of Stamford, on whether it should be the responsibility of the Executive or the courts to issue the order. I do not know whether the noble Lord is still looking for an answer. He partly answered the question himself, because I was going to start by reminding him that indeed it was the previous Government who operated the regime in this way. It was the Bill passed by this House which became an Act in February—

[Lord Davies of Stamford]

I quite understand that the noble Lord is trying to tease me in this way and he is welcome to do so, but I am not asking for an ad hominem response to this point; I should like a substantive response, please.

[Lord Sassoon]

I will try briefly to help the Committee. There is a judgment to be taken in many areas where the Executive exercise authority that could be handed over to other people; the courts might be one place to which it could be handed over. However, I fundamentally believe that actions and decisions to prevent the commission of acts of terrorism, as the noble Lord points out, often must be taken under very considerable pressure of time and require fine judgments of operational matters which, as I have attempted to describe, involve the intelligence and law enforcement agencies. The combination of the flow of information, the time required and the complexity of decisions is suited to decision-making by the Executive, subject to the important safeguards of the courts. I do not know what more I can do, other than say to the noble Lord that I absolutely agree that some of the speed and operational considerations that he raises are ones that make these decisions a proper function of the Executive.

I will also say that I do not accept the word “catastrophe” if it relates to somebody who is reasonably suspected or believed to be involved in a way that leads to the freezing of their assets, subject to the safeguards. We have put in place licensing provisions, and I explained at some length how those are operated right from the start of the designation. Of course it is a serious matter to freeze somebody's assets, but when we talk about the balance against protecting the public against terrorist acts, we should be careful about using “catastrophe”, given the nature of the threat on the one hand and the protections that I have described on the other.

I will move on swiftly to the question of piracy, kidnapping and hijackers. Of course the Government take all these matters extremely seriously. In so far as they are linked to terrorism, as defined in the way that the noble Lord has set out, they will come within the provision of the Bill; but often piracy, kidnapping and hijacking will be independent of terrorism and so not the proper province of the Bill. However, this absolutely does not mean that the Government do not take this seriously, particularly the question of ransom payments. We do not encourage the payment of ransoms. There is a range of other ways, for example through the money-laundering rules, in which aspects of the transmission of illegal money are dealt with, and the Government continue to keep under review all these matters. I suggest that, although it is important that they are raised, they go beyond not only Clause 2 but the Bill itself. I ask the Committee to agree that Clause 2 should stand part of the Bill—

[Lord Davies of Stamford]

I am grateful to the noble Lord for giving way at the last minute. I take note of the fact that obviously we are all reassured that the Government do not actively encourage the payment of ransoms and that they take the matter very seriously. However, if the problem is so serious—and the noble Lord agrees that it is serious—we should do something about it. The Government, after the election, now have a responsibility to do something. I would be grateful if the noble Lord will give an undertaking to the Committee that he will discuss with his colleagues what might be done, either legislatively or by use of executive power, to inhibit the payment of ransoms, or at least look again to see what could be done more effectively to make these activities less cost-free and risk-free to the terrorists.