Counter-Terrorism and Border Security Bill

Neil Coyle Excerpts

2nd reading: House of Commons & Money resolution: House of Commons
Monday 11th June 2018 Commons Chamber

[Sajid Javid]

It is not an offence for internet companies to stream such material under UK law—currently—and the Bill will not have an impact on that. That said, as I mentioned a moment ago in response to my hon. Friend the Member for The Cotswolds (Sir Geoffrey Clifton-Brown), the Government, led by DCMS, are separately looking at what further internet safety measures may need to be taken.

[Neil Coyle (Bermondsey and Old Southwark) (Lab)]

The Home Secretary is being very generous in giving way. He mentioned that social media providers have taken lots of action, but it is my understanding that the Metropolitan police have asked for 400 videos to be taken off YouTube that are essentially about incitement to violence. Is this Bill not an appropriate vehicle to provide a power for all police authorities to compel social media providers to take down videos that are about incitement to violence?

[Sajid Javid]

The hon. Gentleman mentioned YouTube, and I think—if I remember the number correctly—that it has removed something like 300,000 pieces of terrorist material. There is, however, a lot more that needs to be done not just by YouTube, but by many other internet companies. There is already an ability for the Government or, more likely, the police and other trusted organisations to flag up certain content on the internet, whether videos, stills or other types of content. So far this year, we are seeing a marked improvement in the speed with which that content is being taken down. In many cases, it is being taken down within the hour.

The hon. Gentleman may be interested to know that what has also grown considerably in relation to taking down content is the use of machine learning—trying to have the right algorithms to take down content much more quickly. For example, Facebook removed some 1.9 million pieces of content in the first quarter of this year, which is up some 70% on the same quarter of last year. In many cases, the content is being removed within minutes, and in some cases it can be stopped even before it is uploaded.

--- Later in debate ---

[Neil Coyle (Bermondsey and Old Southwark) (Lab)]

It is a pleasure to follow the hon. Member for Cheltenham (Alex Chalk), and I echo the spirit of consensus in which he began his contribution. I wish to speak exclusively to the extension of terror reinsurance in clause 19 in chapter 4 of the Bill. This crucial clause might appear under the miscellaneous provisions, but it offers a significant opportunity to protect businesses and people from future attacks, as well as helping those who have already experienced an attack.

The Home Secretary is no longer in the Chamber, but I would like to thank him for his kind words about my own work over the past 12 months. I speak as the representative of a constituency and community that was attacked last year in the attack on London Bridge and Borough market on 3 June. I do not wish to dwell on the barbaric and savage motives of those attackers, but clause 19 links directly to the statements from the Prime Minister and other Ministers at the time about not letting the terrorists win and about how we can combat their motives and their potential to change our way of living and working.

I would like to extend my thanks to Bishop Christopher, the Bishop of Southwark, who sits in the other place here, to the dean of Southwark cathedral, Andrew Nunn, and to their whole team for their efforts over the past year and in particular for hosting such a moving commemorative service last week. It focused on the people who had been directly affected, including the loved ones of the eight people murdered last June and those who were injured. It also provided a sense of purpose for now and the future by planting a new tree of life, whose growth will be fuelled by the compost from the flowers laid by well-wishers on London Bridge last year. That symbol of ongoing life and vibrancy in the area is genuinely well conceived and was delivered very sensitively last week. I would also like to extend my thanks to the Prime Minister, the Leader of the Opposition, the Home Secretary, the shadow Home Secretary and the Mayor of London, Sadiq Khan, for attending last week’s service. I should also like to thank Southwark Council’s leader, Peter John, and its chief executive, Eleanor Kelly, for providing space on the bridge for a minute’s silence and for more flower-laying last week.

In the service, the sentiments of the local community came through very strongly. There was a sense that we must continue living our lives, but also that something had dramatically changed. A community project was run after the attacks for people to provide their own testimony and personal experience, and the words of one local resident were echoed by the Home Secretary last week. That person said that

“the terror attack changed this neighbourhood forever but not in the way the terrorists had planned. This community is going to carry on being diverse, inclusive and welcoming.”

That sentiment was echoed when the cathedral was reopened by the Archbishop of Canterbury after the attack. He stated that the terrorists had unwittingly created a “renewed sense of community”, and that is very much something that I have felt and seen in the past 12 months.

My community stood tall last year. The immediate response was incredible. The police and the NHS deserve our thanks and praise for their incredible efforts, as do the extraordinary individual people who stepped in to prevent others from being attacked and to confront the terrorists directly, putting their own safety at risk. Taxi drivers provided free transport out of the area to those who were worried. Local people opened their doors to complete strangers to allow them to charge their phones or to give them refuge, and hotels and local businesses offered overnight shelter. In the ensuing days, the public response was also incredible. Public donations of almost £50,000 were received, and support of a similar level was received from businesses. Practical support was given by Barclays on Borough High Street, which provided office space to people who could not access their own premises. Even the British Transport police opened up their counselling service to those who had been traumatised by what they had seen.

In the weeks after the reopening, the solidarity within the local community was also incredible. Businesses such as News UK and Merger Market provided vouchers to staff worth tens of thousands of pounds to use at Borough market. Southwark Council provided rates relief of more than £100,000, and Sadiq Khan freed up £300,000 from City Hall to help the local community. The funding was administered by United Saint Saviour’s, a brilliant local charity with a long history of helping the local community.

Those responses were much-needed. The attackers could not have known what a huge outpouring of solidarity they would trigger. The attack might have lasted for no longer than eight minutes, thanks to the extraordinary efforts and heroism of the police, but the cordon and the investigation closed the area for 10 days, affecting 150 local businesses. Many people will be familiar with Borough market, but it is not just a place that provides bits and bobs and personal groceries. The market has been there for 1,000 years, and tonnes of produce come into the market daily. It supplies restaurants and hotels across the capital and far beyond, and tonnes of produce were lost during the closure after the attack. Contracts to supply other restaurants were lost. Bookings at restaurants were lost. The London Bridge Experience was also directly affected and lost bookings.

The total bill for those 150 businesses is estimated to be more than £2 million. I shall give the House a couple of examples. Cannon and Cannon, a wholesaler of British charcuterie, lost about £11,000, but it was able to access compensation. Turnips, the fruit and veg distributor, lost nearly £100,000 as a direct result of the attack and the closure. Its insurer is Aviva, and Aviva has not paid out despite repeated requests to reconsider. It stands out in this regard, sadly, because it is the only insurer that has not responded with flexibility. It is the only insurer to have badly let down the local community, and I hope that its shareholders are aware of its terrible response. It is an insult to British values in the exceptional circumstances following the attack. I should add that many other insurers, including AXA, RSA and Zurich, worked flexibly to provide help, and I am grateful for their advice and support.

I should also like to thank the British Insurance Brokers Association and the Association of British Insurers for all their help over the past 12 months. I did not know about this particular area before. They all accept that clause 19 is needed, and they have worked together to get the Government to this point. Many of those organisations had already raised concerns, and I believe that the Treasury was warned about two and a half years ago. Sadly, the warnings were not heeded. The insurance challenge was recognised, as is clear from the briefings for this debate and the Home Office Bill briefing. The Government-backed pool reinsurance system set up in the 1990s covers only physical damage and not business interruption resulting from investigations into terror attacks.

I welcome the fact that the clause will close that loophole, but the Government are planning only for future incidents, despite the fact that the explanatory notes to the Bill make specific reference to Borough market and the difference that this measure could have made to those affected in my constituency last year. The Home Office has stated that this clause will not be used to help those who were so badly affected last June, and that is a bitter pill to swallow. I find it difficult to understand.

I hope that the Government will reconsider the matter and allow retrospective coverage for all of 2017, and I do so for four key reasons. First, my constituency needs it. London Bridge and Borough market need it. If it had not been for public donations, firms and jobs would have been at risk, and Treasury revenue was at risk. The owners of one microbusiness even had their home mortgage covered as a result of public donations. That situation did not need to happen.

Secondly, despite the public response, the Government were not there last year, and I find that shocking. The Prime Minister visited and showed the Australian Prime Minister around, a Business Minister came and met employers directly, and the Economic Secretary to the Treasury’s predecessor held a meeting here for some of the affected businesses. However, not a penny of central Government support came to help my local community, and clause 19 represents a chance to rectify that absence from 2017.

Thirdly, the fact that the Government were warned of the need to close the loophole, but failed to do so, is justification enough for retrofitting this scheme now with this clause. My local firms and employers were unacceptably exposed to that loophole.

Finally, Pool Re, the Government scheme, has the funds. There would be no cost to the Treasury, to insurers or to taxpayers for retrofitting coverage for last year. It is simply wilful negligence to deny help to an area so badly hit when the finances are there to allow support.

I close with a plea to the Government to extend cover to last year. I welcome clause 19, but I want coverage to be retrofitted. I hope that Ministers will be sympathetic to that aim as the Bill goes through Committee, in which I hope to participate.

Counter-Terrorism and Border Security Bill (First sitting)

Neil Coyle Excerpts

Committee Debate: 1st sitting: House of Commons
Tuesday 26th June 2018 Public Bill Committees

[Julia Lopez]

Q Do you have anything to add, Mr McGill?

Gregor McGill: As a prosecutor, I would say we are involved in Prevent but not to the same degree. We sit firmly within the pursuit base, if I can put it that way. The aim of any prosecutor is to keep people out of the criminal justice system as much as possible; if people enter the criminal justice system, we have all failed to a certain extent. Going back to what was said at the beginning, the threat is from radicalisation. Anything we can do to prevent that radicalisation is to be supported. I think this legislation will give us the tools to help us do that. Is there more we can do? Yes. But I agree with Mr Basu: is it this legislation? No, it is much wider than that but this legislation will help, in my view.

[Neil Coyle (Bermondsey and Old Southwark) (Lab)]

Q I want to go back to clause 2, which deals with the personal publication of images. Is this Bill not a potential vehicle for a wider power, which might be welcomed by police authorities, to compel any individual or media platform to remove images that incite or glorify any form of violence?

Assistant Commissioner Basu: It has the potential to do that, yes. I think most social media providers have stepped up to their corporate social responsibility, particularly post-2017. They get it—they get that there is a serious issue with social media. I have described it publicly as the internet probably being humankind’s most important invention but also a great scourge of our time. It is not policeable as it currently exists; I certainly could not do it. The only way it can be done is if these companies take responsibility for what they are hosting on their platforms. We are seeing a real movement towards that, and the Government have helped dramatically in terms of being a convening power: getting the big chiefs round the table.

It has taken eight years for my counter-terrorism and internet referral unit to encourage social media providers to take down 300,000 pieces of extreme terrorist material: stuff that we think hits the threshold. During the first quarter of 2018, two of the major CSPs managed to take down just short of 4 million. When the impetus, drive and understanding are there and they know what they are looking for and what crosses the criminal threshold and undermines all their own policies, they can do this. That is incredibly important. That is over and above anything in this legislation.

[Neil Coyle]

Q Most of us are grateful to have seen the new Government focus on this and, in particular, the social media companies finally coming to the table. But that has been under threat of regulation—so, again, is there not the space within the Bill to take that forward? I think you are suggesting both that it is beginning to happen but that the Bill offers the opportunity to go a bit further and give the power that could be used if media companies do not continue to work closely with Government. Is that fair?

Gregor McGill: In legal terms, freedom of expression is not an absolute right, but a qualified one. It is important to remember that. It can be interfered with, if I can put it that way, if that is in accordance with the law—and this legislation would provide that; if that is necessary in a democratic society; and if it is proportionate. Like so much in the criminal justice system, we try to strike that right balance, between the rights of individuals to have that freedom of expression and the rights of other citizens to live in peace, security and safety.

[Neil Coyle]

Q In clause 3, what does this Bill do that the French legislators failed to do? Linked to that is the point made by the hon. Members for West Aberdeenshire and Kincardine and for Dunfermline and West Fife—namely, that we know vulnerable people are being deliberately targeted, or groomed, by those who want to incite them to undertake violent acts. You seem to be suggesting that a click of a fraction of a second would count towards a realistic prospect of conviction, but then seem to draw back and suggest, for example, that for someone with a learning disability, the public interest clauses would prevent a prosecution. Bearing in mind what the other witnesses would like to see and the case they might be making, are you suggesting that that is where the reasonable application would land and that that would be the trigger for a Prevent-type intervention, rather than a prosecution?

Gregor McGill: On the three clicks, how a prosecutor would have to approach it is to look at the case in the round and see what the nature of the clicks was—look at the issue in totality. How long someone looked and how close together—you have to build up an evidential picture and ask yourself, as a prosecutor, whether that provides you with a realistic prospect of a conviction.

In some cases, it may start off with a very short click, but the next click may be longer and the click after that may be longer. That enables a prosecutor to build up a story and a narrative and ask those questions. A prosecutor has to look at that and ask whether that evidence provides them with a realistic prospect of conviction. But they have to ask themselves a wider question: would the public interest require a prosecution in this case? That would depend very much on the circumstances of the case.

In respect of the French legislation, I am afraid I do not know much about that; I struggle enough with English law without trying to understand French law. However, I could find out about that and write to the Committee, if that would help.

Assistant Commissioner Basu: Every senior investigating officer has a responsibility to consider a Prevent line of inquiry while they are looking at the investigative lines of inquiry for their case. There are two very good examples of that. I mentioned the one about the four youngsters who wanted to travel. In that case, Prevent initiatives were put around certain of those vulnerable youngsters, because we did not want to criminalise them.

A very famous case that has just been convicted is that of Safaa Boular. Safaa Boular was a 16 year-old girl when she was groomed online by a 33 year-old from Syria. She was considered to be a very vulnerable youngster in need of some kind of Prevent intervention. That Prevent intervention failed: bear in mind that it is a voluntary programme; if you do not want to engage with it, that is a significant issue. We have people who go on to plan or even commit terrorist atrocities who have been subject to Prevent intervention. In terms of the efficacy, it is a very difficult thing to do, but we aim towards it.

I was taken by what Mr McGill said; it is a failure when we criminalise people and have to prosecute them. As I said, the primary duty of my job is to save lives and prevent crime—not detect it. I am a very experienced murder investigator, but I never wanted to be a murder investigator as a counter-terrorism officer.

[Neil Coyle]

Q To follow up on the point about the quick click, if you want to call it that, you are suggesting that because there is no time limit in the Bill, it could count towards a prosecution. We have to be mindful of that, and it might be worth considering some kind of time limit.

If someone is grooming, for want of a better word, someone vulnerable, and they send them an email link without any explanation, would the person being targeted be able to prove—as the onus is on them to do—that their excuse was reasonable, that the link was sent by someone they trusted and that it was a case of misplaced trust? How would that pan out in practice?

Gregor McGill: It is quite difficult, and it requires close liaison between prosecutors and investigators to work out exactly what the evidence is in the case. It is true that if someone is groomed and specifically targeted, that can be a powerful reason for not prosecuting, because we have to understand that people are targeted because they are vulnerable.

There comes a stage sometimes, however, when we have to focus on what people have done, rather than why they have done it—if I can put it that way. It is that balance, which goes back to what I said before and what Mr Basu just said. Wherever we can, we try to keep people out of the criminal justice system. Investigators and prosecutors will do everything they can, but in certain circumstances the code means that if the evidence is there, and it is a serious matter, the public expect a prosecution.

[Neil Coyle]

Q On clause 19 and terrorism insurance, despite the Prime Minister talking about the attack on London bridge and Borough market as a terror attack on the night it occurred, it took a considerable amount of time for it to be formally classified as a terror attack. The Ministers have suggested that one of the reasons for that was that three police authorities were involved—City of London, the Met and the British Transport Police. Is the Bill also a vehicle for trying to speed up the process by which acts of terror can be classified, so that those affected, particularly businesses and employers, have better protection when claiming from their insurers?

Assistant Commissioner Basu: That is a matter for the Government and the way the Bill is drafted, but it would be a laudable aim.

[Neil Coyle]

I will take that as a yes.

[Simon Hoare]

Q You may have a different view of this question, depending on which end of the telescope you are looking through. Is there anything that you would have liked to have seen in the Bill to help you with your respective jobs and tasks that is not there?

Gregor McGill: From a Crown Prosecution Service perspective, the Bill is a proportionate response to the threat we face.

Assistant Commissioner Basu: We have discussed the designated area offence and, briefly, the Protect duty. I caveat that by saying I understand how difficult a Protect duty would be. Some 80% of British businesses are small and medium-sized enterprises and I know it would be difficult. I do not want to impose a financial cost on people; I just want them to understand the seriousness with which we need their help. I am not sure that legislation is the right vehicle for that, but it is something we have debated.

The last point I have not mentioned is that we have a continual issue with people marching and waving flags—the whole display issue—and we do not have a power of seizure of flags, which is part of the evidential chain for a successful prosecution. That is a minor point. Otherwise, it is a well-balanced set of proposals.

Counter-Terrorism and Border Security Bill (Fourth sitting)

Neil Coyle Excerpts

Committee Debate: 4th sitting: House of Commons
Tuesday 3rd July 2018 Public Bill Committees

[Mr Wallace]

Clause 12 confers on police the power to enter and search the home address of a registered terrorist offender. The police consider home visits an important tool to properly manage and risk-assess registered terrorist offenders while they are subject to the notification regime. The clause therefore gives police officers the power to enter under warrant—they have to go to a magistrate to get it—which will allow them to ascertain that an RTO does in fact reside at the address they have notified to the police, and allow them to check compliance with other aspects of the notification regime.

In response to the question from the hon. Member for Torfaen, some of the purposes would be home schooling. If someone was concerned about the welfare of the children of a serious terrorist offender who was back at home, the police would have the power to look at that after applying for a warrant. More importantly, the purpose is compliance with the regime and the conditions on the offender’s release. As has been rightly said, I suspect it would be about things such as flags and digital material, whether they have complied, and whether they are doing the sorts of things that they have undertaken not to do.

The sadness about a lot of terrorism is the re-engagement of terrorists. I still remember, 30 years later, a bizarre statistic from my days in Northern Ireland. If a man was convicted of a terrorist offence in Northern Ireland, after serving a sentence of about 10 years he usually stopped being proactive or a leading light in terrorism. He would perhaps engage in the political wing of an organisation, but he would not go back to his previous activity. Bizarrely, women would almost always re-engage. I do not know what that says about women’s determination and loyalty to the cause, but I have never forgotten that bizarre pattern. In today’s environment, in which some terrorism has a strong ideological bent, we are worried that some individuals re-engage, or try to re-engage, pretty quickly. Unfortunately, therefore, these measures are necessary for us to put certain restrictions on people.

As I said, these measures will allow officers to observe someone’s living conditions and identify any indications of a decline in their mental health, drug or alcohol use, family problems or other issues that may indicate an increase in the risk that that individual poses to the public. I will address the point made by the hon. Member for Cardiff South and Penarth later.

In providing for such a power of entry, we are not breaking new ground. The clause mirrors existing provisions in the Sexual Offences Act 2003 in respect of registered sex offenders. Our experience has been that subjects are aware of their requirements and of the police’s power of entry, so they tend to co-operate with visits by officers and give them their consent. I am confident that extending that power to enable the management of RTOs will increase the extent to which they co-operate with visits by officers.

We have been careful to place a safeguard on the operation of the power. The clause provides that a warrant can be applied for only if a constable has tried on at least two occasions to gain consent from the RTO to enter their home to carry out a search for the purposes I outlined, and has failed to gain entry. I should also stress that the power is exercisable only on the authority of a warrant issued by a justice of the peace or equivalent, and that any application for such a warrant must be made by an officer of at least the rank of superintendent.

[Neil Coyle (Bermondsey and Old Southwark) (Lab)]

The Minister suggests that the new power will be effective, but the Met has its lowest officer complement for more than 15 years. In the past eight years, my borough has lost more than 400 police officers and police community support officers. How will the Government keep the new power under review to ensure that it can be used by officers and, in the light of the comments by my hon. Friend the Member for Cardiff South and Penarth, to ensure its efficacy?

[Mr Wallace]

The hon. Gentleman makes the fair point that it is all very well having lots of powers, but we must have the officers to deal with such matters. We have increased funding for counter-terrorism policing to ensure that we have as many such officers as possible. I am confident that the management of terrorist offenders is predominantly down to counter-terrorism officers. It would not be left up to a PCSO or a general beat constable. We have sufficient police officers to deal with this issue.

The power is as much an offender management tool as a criminal justice pursuit tool. It is about how we manage offenders effectively. That is why it is voluntary at first: we ask twice whether we can come and check up on someone, and only then do we resort to the law, which I think will happen rarely. There will probably be a reason when it happens, and that is when we will see a borough commander. People in the constabulary would move resources to address this.

I share the sentiment expressed by the hon. Member for Cardiff South and Penarth that the police and other law enforcement authorities should exercise their powers sensitively. Many members of the Muslim community in my constituency live together as large families. It may be that one person is a terrorist offender but no one else is. We all have good and bad neighbours and family members, and we have to respect that.

I reassure the hon. Gentleman that the power to enter and search will be exercised under the powers of entry code of practice, which is issued under section 48 of the Protection of Freedoms Act 2012. The code states that officers entering properties where people are subject to the notification regime in part 4 of the Counter-Terrorism Act 2008 must act reasonably and courteously to persons present and the property, and use reasonable force only where it is assessed to be necessary and proportionate to do so. We all know that that requirement is not always met, and we have to intercede with local police to ensure that our constituents’ concerns are addressed.

The amendment would therefore create a provision analogous to the code of practice by which the police already operate, in the context of their seeking twice to be granted entry voluntarily. One hopes that a good police officer would manage to get there without having to resort to the law.

I believe that the safeguards built into the clause are sufficient to ensure that the power will be used proportionately and only when it is absolutely needed by police officers. Introducing a requirement for police officers to have reasonable grounds for believing that an offence has been committed would restrict the use of the power to an unnecessary degree and undermine its primary purpose, which is to ensure that officers can assess the risk posed by a convicted registered terrorist offender at the address they have provided.

It is important to mention that we are dealing with people who have been convicted of an offence rather than those who are suspected of having committed one, so restricting the power of law enforcement forces would get the balance slightly wrong. These people are already offenders, so I believe that our police should have slightly wider powers in this respect.

I remind the Committee that Assistant Commissioner Neil Basu said last week that the power of entry

“is something that allows us to assess the ongoing risk of their re-engaging with terrorism…You might find a flag being displayed. You might find material that is of use to a terrorist. That is the purpose of it.”—[Official Report, Counter-Terrorism and Border Security Bill Committee, 26 June 2018; c. 25, Q52.]

Given the clear operational need for the provision, I ask the hon. Member for Torfaen to withdraw his amendment.

Counter-Terrorism and Border Security Bill (Fifth sitting)

Neil Coyle Excerpts

Committee Debate: 5th sitting: House of Commons
Tuesday 3rd July 2018 Public Bill Committees

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship, Mrs Main. I, too, support a review, but perhaps for slightly different reasons.

I have had a close working relationship with South Wales police for many years, and my experience of Prevent locally has been largely positive. Indeed, my interactions with South Wales police overall have been positive. I know that they take great care to engage with the relevant parts of communities, build the necessary personal relationships and focus on what they can do to prevent young people from being drawn into any form of terrorism or extremism—not just Islamist-related extremism, which is regularly referred to, but far-right and other types of extremism.

I am clear from speaking to colleagues in this place that experiences of Prevent vary widely up and down the country. I have no truck whatever with those who suggest that we should prevent Prevent—scrap the whole programme—or those who demonise it, because that does not reflect how it operates in many parts of the country, and scrapping it would be wholly counterproductive in dealing with the issues that we want to deal with.

Many members of my community—Muslims, Hindus, those of other religions and those of no religious faith—have concerns about extremism and terrorism, and want to deal with them. In fact, when I was first elected to this place just under six years ago, a local imam came to me to express serious concerns about what young Muslims in the community were viewing online—the sort of grooming that we discussed in previous sittings.

I take a slightly different approach from my hon. Friend the Member for Ealing Central and Acton. We should have nothing to do with organisations such as Cage—she did not suggest we should. I also have deep concerns about the organisation Muslim Engagement and Development, which I have raised directly with MEND representatives in my community. I have seen some of its positive work to tackle Islamophobia and raise awareness of issues affecting the Muslim community. However, like any other organisation, it does not speak for “the” Muslim community or any other sector of society. It is one organisation that puts forward a set of views and concerns. Sometimes those are positive, but sometimes I have significant concerns.

I have discussed those with my local police force and directly with the organisation. I believe in having a dialogue and understanding where the organisation is coming from, but I am not afraid to raise concerns about things that have been said. Cardiff featured in the Channel 4 documentary to which my hon. Friend referred. I was somewhat alarmed by its findings, although some parts of it may have been alarmist and created undue fear. We have to be cautious, frank and robust with such organisations.

I support a review, but because of a different set of reasons and concerns about the way Prevent is working. My major concern, which I have expressed to the Minister and his predecessors, is that at times Prevent is too focused on elites and community leaders, who are often self-appointed, and does not do enough to deal with grassroots organisations and individuals, particularly young people. That is my experience locally. At times there has been too much silo working. People meet under local authority structures and ways of working when we actually need complex, nuanced and deep relationships across the community to understand what is going on and the concerns that people have about Islamist extremism or far-right extremism, and to build the trust that can help prevent people from being drawn into such activity.

I do not think Prevent’s role in relation to far-right extremism is understood fully enough. I know about the work that is going on locally and the extent to which work is done with individuals who are drawn into far-right organisations, but there is a great deal of concern in some of the most diverse religious communities in my area, such as Grangetown, Butetown and the docks areas of Cardiff, where we have one of the oldest Muslim communities in the UK. We have six mosques and three Hindu temples—there are many different faiths and backgrounds—but unfortunately we have recently seen concerning examples of far-right extremism.

A few months ago, just before I was due to speak at an anti-racism march in Cardiff, neo-Nazi swastikas and slogans were posted all over the community on the route that many children take to school. The fantastic response by South Wales police and the council re-established trust and assurance in the community, but there is understandably concern about what the individuals who are drawn into such groups may do.

We have only to look at the individual who drove from Cardiff to attempt to kill many people in Finsbury Park, or of course at the tragic murder of our former colleague, Jo Cox, by a neo-Nazi who was inspired by far-right ideology, to understand why that is so crucial. However, the issue is not widely understood. Dealing with extremism and terrorism, whatever community or ideological background it comes from, is key to bringing confidence to all communities.

I note what the hon. Member for Paisley and Renfrewshire North, who represents the Scottish National party, said about the devolved Administrations. The Welsh Government play a crucial role as a partner, but that can create clunkiness in the system. I am sure the Minister accepts that UK Departments do not always deal as consistently with the devolved Administrations as we may want. I have had conversations about things that it was assumed were being done by the Ministry of Housing, Communities and Local Government with civil servants and officials who did not understand that those matters were dealt with on a practical level by the devolved Administrations in Scotland, Wales and Northern Ireland. I would therefore like assurances from the Minister about how the UK Government will work with the Welsh Government to ensure that these programmes work.

I support a review, so I support the amendment tabled by my hon. Friend the Member for Torfaen, but I do so for the reasons I have outlined rather than because I think we should not have such a programme or we should not attempt to stop people being drawn into extremism and terrorism.

[Neil Coyle (Bermondsey and Old Southwark) (Lab)]

I wish to echo some of what my hon. Friend the Member for Cardiff South and Penarth said. I share some of the concerns of my hon. Friend the Member for Ealing Central and Acton about the materials, although I suspect some of them have been updated. If simply having a beard made one a suspect, Father Christmas would be in trouble—were he to exist.

As co-chair of the all-party group on counter-extremism and someone who represents a constituency that has been attacked, I recognise the benefits of Prevent. After last year’s attack at London Bridge and Borough market, I spoke to the five mosques in my constituency, which frankly wanted to open their doors. They wanted to know that their sons and daughters—in particular their sons—would not be targeted by those who seek to groom the innocent and turn them into people who seek to attack and undermine our way of life. They also wanted engagement, to counter the Islamophobia that grows when attacks occur. There is a role for Prevent in such situations. We should not forget that the attackers at London Bridge and Borough market chose to commit their atrocity at the very time when real Muslims were breaking fast. They were not Muslims, and it is not Islamophobic to try to prevent such men from committing atrocities.

There was community concern about the nature of the people targeted by groomers, for want of a better word—people with learning disabilities and mental health problems. Given the circumstances they live in, there is nervousness about providing information about such people. That is where communities need reassurance about the support that is available outwith the influence of those who seek to corrupt. That would be welcome, and that is what amendment 31 gets to. A review could help to build trust and demonstrate what the Government do to support those who are genuinely vulnerable in such circumstances. I therefore hope the Government welcome the amendment.

[Afzal Khan]

I will try to be brief. I echo much of what colleagues have said. I was involved with the 7/7 taskforce and served in the European Parliament as a vice-president of security and defence, so I know there are many aspects involved, but I urge the Minister seriously to consider a review.

People have different perspectives on Prevent, from feeling picked on to feeling under siege. Some talk about preventing Prevent. Others say it is toxic. At the heart of it, the trust of communities is key. Some mainstream groups have taken issue with Prevent—the Muslim Women’s Network UK is the largest to have done so. The Muslim Council of Britain, another large organisation with more than 500 affiliates, also thinks there needs to be a review.

The journey we have been on in the past 12 years or so has clearly had positive elements, and elements that we need to learn from to improve. A review would help us all. The emphasis on the far right, which has clearly become an aspect of Prevent in the past few years, is welcome.

If the Minister wants expansion, it is vital that there is sufficient funding both for training, so that we do not end up with prejudices pushing the agenda, and for local authorities. We have seen the cuts to local authorities in the past eight years—they will need sufficient resources to take the strategy forward.

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Terrorism reinsurance

[Neil Coyle]

I beg to move amendment 45, in clause 19, page 19, line 20, leave out paragraph (b) and insert—

“(c) the use of a motor vehicle during acts of terrorism; and

(d) any loss which falls within subsection (1A).””

This amendment would ensure that personal injury sustained as a result of the use of a motor vehicle during acts of terrorism would be covered by terrorism reinsurance arrangements.

It is a pleasure to serve with you in the Chair, Mrs Main. The explanatory notes speak for themselves: the amendment would cover vehicles used in acts of terrorism. I will speak to several amendments to the clause, and I should explain at the outset that this is almost wholly driven by the experience of all those people and businesses affected by the London Bridge and Borough market terror attack in my constituency on 3 June last year, which saw eight innocent civilians murdered in a brief but brutal assault on a vibrant, positive and dynamic part of our capital and my community.

The cowards who chose this area knew that it would be full of people of all ages enjoying an evening out. They knew it played host to tourists from all over the world celebrating everything that London has to offer in terms of food and drink. Its impact was universal, and I will say more about the outcome, because despite their vile intentions, we have seen a new togetherness and a new sense of community. I will speak about that later as I bring forward further amendments.

I would, of course, like to say much more about the attack and its aftermath, but for now I will make just two additional points linked to the amendment. First, I would like to thank the police and emergency services again for their truly heroic efforts that evening. The swift action of paramedics meant that many lives were saved, including those of the people who were hit by the vehicle on the bridge and those who were attacked with knives in and around the market. Those who ran trauma centres deserve huge praise in particular.

The swift and even more heroic action of police officers deserves mention too. They ended the attack before more innocent lives could be taken, with officers taking huge risks, and some interventions resulting in life-changing injuries for those involved. I mention just one: PC Wayne Marques was very badly affected, and I thank Southwark cathedral for acknowledging his efforts in a very novel way. He is believed to be the first living model for a corbel for the cathedral, which was unveiled at the commemorative service last month. If anyone would like to know what a corbel is, they are more than welcome to visit. I am no architect; a real amateur would call it something akin to a gargoyle, but that is very much not what it is—it is a supporting structure.

When I was first elected in 2015, I was warned by security officers that my constituency was more likely to be attacked by terrorists because of its location, attractions such as the Shard, the Globe theatre and the Tate, and the six million tourists who visit, and because of the potential global impact. Sadly, there is also the potential to grow an attacker—to have someone living or brought up in our area who attacks or tries to attack others. Sadly, both those things have to come to pass in just three years.

Thankfully, a potential attacker was thwarted by his own ineptness in attempting to target commuters on the Jubilee line, and he is now in prison thanks to the police and security services. The horrific events of June 2017 were an even greater shock, but they also revealed weaknesses about how we respond as a country and how we try to protect people and businesses in the event of attacks involving vehicles and knives.

I will outline some of those weaknesses as we scrutinise clause 19, starting with motor vehicle use in attacks. This is a probing amendment, as I have made clear from the outset. I am aware of cross-party interest and conversations on this matter, and I understand that the hon. Member for North Dorset had a meeting on this issue this morning.

It may surprise some Members to note that the Government-backed pool reinsurance system has existed since 1993, and is designed specifically to cover acts of terror—those incidents causing significant damage to our country, people and physical infrastructure. Since 3 June 2017, I have been amazed at how its presence and potential to support those affected by terrorism has been somewhat muted by the Government and the Treasury in particular. Instead of adapting it and ensuring swift access to help in the event of an act of terror, the Treasury has squirreled it away and designed new and more complex systems to compensate individual victims or groups of businesses affected by terrorism.

There are so many different pools of support, depending on whether someone is hit by a vehicle, stabbed or targeted with explosive devices, and each has different levels of support and ease of access. Nobody can or should be expected to know all of them in advance of an attack affecting them. That is the case with motor insurance.

I should thank all those involved in the sector for their advice and briefings since last June for the various meetings and events I have held or participated in—the British Vehicle Rental & Leasing Association and Thrifty are just the latest two.

Sadly, rental vehicles have become a choice of weapon, and the sector is very worried about what is happening as a result. Twenty-three thousand businesses are involved in renting vehicles, with 5 million vehicles on UK roads covering 3 million jobs and providing an estimated £150 billion to our economy. It is a significant sector and one that we should ensure is not harmed by terrorist aims or actions. The amendment and the Bill offer that chance.

The sector is taking action, including better screening of people seeking to hire vehicles. Members of the sector are making strides, but they were very disappointed not to receive replies to correspondence with the Treasury in April that outlined their concerns. I hope the Minister will nudge his colleagues in the Treasury for a reply, albeit a delayed one. No nod is forthcoming, but I hope that will happen.

We cannot pretend that the sector can resolve this alone. With the best will and policies in the world, it would not be able to deter the most hard-minded terrorists. Even if the private rental sector could stop all hiring of vehicles for this purpose, the second-hand sector might become the sector of choice for those seeking vehicles, so it is important to ensure that the market works for the private rental sector and that the terrorists do not win by changing how we work or the availability or cost of rental vehicles.

Signs of failure are already emerging. On opening for bids to reinsure its fleet, one major car rental company, which wishes to remain anonymous, found that two insurers immediately withdrew from offering cover specifically because of

“concerns regarding potential terrorism exclusions on reinsurance treaties”.

A further insurer offered only part-cover with a significantly raised self-funded retention figure. Those risks are there.

There are several reasons for the withdrawal of former help and for the changes. Rental operators are required to have motor insurance and cannot trade without it. When a vehicle is used for terror, the company that rented it out has unlimited risk liability. That is new—it has been the case only since a judicial review in 2017. Before that, the criminal injuries board paid compensation, although it was not unlimited. The CIB still covers attacks not using vehicles, and the limit is £500,000. Those changes—the rise in the threat and the forms of attack that have taken place on Westminster bridge, at Finsbury Park and in my constituency—are causing great fears. This is a global phenomenon. When a truck was used in Nice in July 2016, the collective damages were more than £500 million. The sector is very anxious. There are threats to withdraw cover from 2019 without urgent action. Small and medium-sized enterprises in the sector will be affected to an even greater and swifter degree from as early as next year, but the amendment potentially offers a solution.

A more agile Treasury might think to use Pool Re as a permanent rule, as supported by Zurich in its letter to the Committee, in which it flagged up

“building a new model to fund a uniform compensation mechanism; and devising a holistic approach for compensating and rehabilitating victims of terrorism.”

Pool Re exists for that very purpose and since 1993 has paid out about £630 million in relation to, I believe, 13 incidents. Instead of taking that approach, the Government appear to be inventing new and different compensation schemes to cover different kinds of losses. It is an out-of-date system and should be overhauled. Pool Re is the obvious model to offer more universal protection. In Australia and Austria, it is the norm. In France, Spain and Italy, insurers are also mandated to pay into a Government-backed scheme, akin to Pool Re.

Given the points I have made, hon. Members may wonder why this is a probing amendment. That is because there is another means of addressing some of the concerns. The Motor Insurers’ Bureau is the sector overseer, for want of a better term. Every insurer underwriting compulsory motor insurance is obliged by virtue of the Road Traffic Act 1988 to be a member of the MIB and to contribute to its funding. The MIB consulted its members on their views about mutualising risk from injuries resulting from acts of terror, and a vote is under way on adopting proposed changes. If the MIB vote fails to address insurers’ concerns, market failure beckons and a Government-backed approach may be the only option. An indication from the Minister of the Government’s thinking and plans for action in the event of that failure would be very welcome and could reassure many of the businesses affected.

The Minister’s views would also be welcome. Even in the event of that vote passing, the Treasury will be asked to convene the sector—the British Vehicle Rental and Leasing Association, Road Haulage Association and Freight Transport Association—to work on a new system that does not overload businesses and industry. Whatever the outcome of the vote, the Government will have a role in shaping what comes next.

Timing is crucial. By the time the Bill reaches its next stages and the House of Lords, we will have the outcome of the vote, and preliminary discussions involving the Treasury and the sector will have occurred. The amendment may not be needed a few months down the line, hence its probing nature. However, in the event of vote loss or discussions calling for greater Government involvement, the Pool Re model is on the table through this amendment and discussions now. I look forward to hearing the Minister’s reply.

[Simon Hoare]

I do not wish to detain the Committee for long, not least because all the copious notes I took from the meeting that the hon. Gentleman alluded to seemed to go missing in the lunch recess. Perhaps we should be more concerned about our security and counter-terrorism than anything else.

I want to support the probing nature of what the hon. Gentleman just said. The licensed vehicle fleet is very large and represents a significant percentage of new car sales in the UK. We know full well the huge importance that the automotive sector has for our UK economy.

It is also an important part of our UK tourism sector. Lots of people live in our big towns and cities because there is good transport and they do not require to run a motorcar. However, they want to go on holiday in the United Kingdom with their kit, their kids and everything else, so they hire a car. We also want to ensure that foreign tourists who are here on a UK-only destination or as part of a wider European tour have access to a vehicle.

As we know, insurance is a pivotal measure that vehicle rental companies must have. The hon. Member for Bermondsey and Old Southwark alluded to the huge problems that that can create when trying to find insurance. That seems to be a difficulty not just for the larger players in the sector but smaller business. Businesses large and small create a significant number of jobs.

The hon. Gentleman referred to the ongoing consultation on the vote. One hopes that that will address the issue. As the Bill progresses towards Report and processes in the other place, I urge my right hon. Friend the Minister that it is a timely trigger for a more intragovernmental conversation about how our mature and well respected insurance sector considers altering its products and remit, and how it looks at requests for insurance in sectors that are prone to claims, which are themselves hard to define. Vehicles would obviously be one of those. There seems to be a time lag between the mindset of the insurance sector and what today’s modern business requires.

A constituent is having to claim on his domestic insurance for loss of possessions as an indirect result of terrorist activity. His insurer has told him, “Terribly sorry; you are not covered.” Lots of other sections, be it Government, police, security and so on, have had to recalibrate a lot of what they do in order to face these new challenges. That is what we are trying to do in the Bill. There is a time lag in some elements of the insurance sector, so I support the hon. Gentleman.

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[Simon Hoare]

I was drawing my remarks to a close. I am not going to speak to all of the amendments, conscious of your injunction, Mrs Main.

[Neil Coyle]

It is not just a time lag, although that is part of the problem. The insurance sector takes the same approach as the one that led to Pool Re, being conscious of the fact that the cost they could incur are much higher as a result of the judicial review last year.

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[Mr Wallace]

I am very sympathetic to the aims of the amendment, and the clear issue that people who are going about their business not thinking about terrorism become victims. They run small businesses, and then without much ado they go through the terrible attack that we saw on London Bridge. Visiting people was amazing, and I pay tribute to the courage and bravery of the constituents of the hon. Member for Bermondsey and Old Southwark. When individuals cut across the bridge and ran into people, the first thing the public did was run to help. The best of humanity came out that night, and also some of the worst. Not content with murdering people who came to help, the terrorists then embarked on an attack in Borough market, and we saw unarmed people challenging them and doing their best to make sure that they were not allowed to go any further. Then the police came and took very strong action.

I understand what the amendment tabled by the hon. Member for Bermondsey and Old Southwark seeks to do, but I have to point out the difference between Pool Re and other insurance companies. Pool Re effectively insures insurers. It is not a customer-facing organisation where we make a claim against it. Individuals make a claim to an insurance company and that company goes to Pool Re, and under certain conditions the claim is paid out. The hon. Gentleman’s amendment would slightly change that relationship.

The amendment also does something that has been alluded to by Opposition Members. Our difference of opinion is about timing. The MIB, the Motor Insurance Bureau, is having a vote as we speak—a postal vote. Can we, as a Government, say to them, “Don’t worry, we’ll step in. Don’t worry about mutualising your risk”? That is ultimately where most countries solve that problem. It is where many other issues around niche insurance—it is pretty niche—is dealt with. The insurance industry mutually insures the risk out of its profits. I am often slightly frustrated by the insurance companies, but we should not forget that the risk of being involved in terrorism is tiny. I have raised this before. One by one, travel insurance companies have dropped covering counter-terrorism. The risk of it is very small and therefore the impact of standard cover for terrorism on profits will be minimal.

[Neil Coyle]

I appreciate that the risk to the individual of being involved in an attack is minimal, but we have been here before. The reason for Pool’s existence is the astronomical costs to insurers, as we saw in the case of the Provisional IRA attacks in the early ‘90s targeting physical infrastructure and not individuals. There were huge costs that the insurance market said it could not be expected to cover. That is why Pool exists. We are seeing a similar position emerge in motor insurance potentially, and the Minster is taking a slightly complacent attitude to that. If we saw—I very much hope we do not—a Nice-style large vehicle attack on civilians, those costs would be there and the insurance market would collapse.

[Mr Wallace]

That is why our preference is for those companies to mutualise their risk through their profits. As I said earlier, our challenge is perhaps a difference of opinion on timing. The MIB is having this vote, and if the Government were right now to indicate, “Don’t worry, we will take it out of Pool Re,” those insurance companies would feel less compelled to vote to mutualise that risk, not more. The Government will, for now, maintain the view that we step in when something is uninsurable and at the extreme of market failure. I do not think that now is the moment to indicate that somehow the MIB can pass it on to the system.

The hon. Gentleman refers to catastrophic losses and scale. Pool Re already covers that large pool of loss, to some extent. I would be interested to see the insurers’ calculations of the actuarial risk, if we extended it to personal injury through motor vehicle. Whether we like it or not, the catastrophic costs of the big IRA bombs, for example, were because of the scale of the truck bombs, which led to the sealing off of large parts of city centres of high retail value and high-expense property. That cost is extreme. He talks about Nice, but the current indication is that that scale of threat to people and personal injury is still very rare. The Government’s position is, therefore, that we would like the industry to mutualise that risk.

At the same time—this is good news—we are moving in the Bill to ensure that loss of business is covered by Pool Re. When areas are shut down, we think Pool Re has a role to play in that, and not enough has been done by the insurance companies. Perhaps it is a matter of timing that divides us, rather than what we both want to achieve. I will get on to timing at a later amendment. I am slightly thrown, because I think the timings have changed for the Committee.

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[Mr Wallace]

I hear hon. Members’ concerns, but for that reason, and to see where we get to with the MIB and its vote, I ask that the hon. Member for Bermondsey and Old Southwark does not press his amendment. We will explore what more can be done. I understand the concerns, especially about vehicles being used as weapons. I believe that our insurance companies, which are on the frontline in their relationship with customers, should deal with this risk. The Government should step in only if those companies fundamentally fail to do so.

[Neil Coyle]

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Neil Coyle]

I beg to move amendment 11, in clause 19, page 19, line 27, at end insert—

“(c) the acts of terrorism referred to in paragraph (b) occurred on or after 1 January 2017”.

This amendment would mean that the extension of terrorism reinsurance arrangements to losses that cannot be directly linked to physical damage would apply to those businesses that had financial losses due to terrorist acts occurring on or after 1 January 2017.

Key to this amendment is the backdating of extended coverage, which the Minister has just referred to, to 1 January last year, to cover business interruption rather than just physical damage. Speaking to each amendment separately gives me the chance to thank everyone involved, and I thank the Clerks for their advice and support. We should at least ensure that this amendment is watertight. I also thank the Borough Market Trust for its information and advice and the way it has held the community together with the support of United St Saviour’s in the past year, including by distributing donations to those most in need locally, in the absence of the coverage that this amendment is designed to achieve.

As I have mentioned, I never expected to be involved in terror insurance issues when I stood for election in 2015. Most of us assume we will never be affected by a terror attack. The Minister has just said there is a tiny chance of our being involved. Most of us also assume that the Government have systems in place to ensure that people and UK businesses are protected as far as possible from such events happening, and that if terrorists do get past, the efforts of our excellent security services and dedicated police support will be available.

We also assume that, whoever is in charge, the Government will act in our best interest and ensure there is adequate preparation for future attacks. Sadly that is untrue, given the nature of the attacks we now face, warnings about the types of attacks being witnessed, and inaction by the Government on having protection in place despite two and a half years of alerts about the changing nature of terror in the UK—the targeting of civilians with vehicles and knives. The attack at London Bridge and Borough market exposed the gap that has emerged, despite the Government’s awareness of the matter.

The example given on page 30 of the explanatory notes is Borough market:

“The extension of the terror threat to cover not only bomb attacks causing physical damage to commercial property but also the use of vehicles and knives targeting individuals has led to a gap developing in the cover that Pool Re offers. In the case of the June 2017 terrorist attack on Borough Market, there was limited physical damage…but traders lost business as a result of the week long closure of the market to enable the police to investigate the crime scene. As the losses incurred by Borough Market businesses were not consequential on physical damage to commercial property, any terrorism-related insurance backed by Pool Re and held by those businesses may not have covered such losses.”

So the Bill would extend coverage to provide better help to employers affected by future attacks, but it offers nothing to the 150 businesses in my constituency that were hit last year, despite the fact that the market is used as an example and justification for extending the new coverage. The amendment would helpfully backdate coverage so that the example given would also be covered by the Bill.

The 150 affected firms assumed they would have protection, because of that tiny chance. They also assumed that the language the Prime Minister used, saying that the terrorists would not win, meant that assistance would come to stop terrorists costing firms, jobs and our way of life in the area—and well beyond it, given the nature of Borough market’s suppliers across the country and internationally. We have had 13 months of ministerial visits and meetings, but nothing has been offered. My amendment is designed to change that and offer some of the affected firms extra help in the absence of Government direction or action.

The attack last year was over very quickly, thanks to police attendance, but eight minutes of attack led to a closure affecting the market and the area for 10 days. It affected 150 businesses and it cost £2 million. The consequences were colossal. In some cases there was physical damage. I have been through the accounts of some of the affected businesses. In that limited pool, which is a range of tourist attractions, traders and restaurants, physical damage was the smallest part of the damages. It included damage to doors, and the vehicle damage on the bridge. I have seen about £26,000 of damage in the accounts.

A second category was produce. The market is not just somewhere for people to pick up bits and bobs. There is tonnes of produce there, supplying the restaurant and hotel sector for miles around. Stock loss accounted for about £84,000 in the handful of accounts that I have seen. Staffing was another business interruption loss that could not have been predicted. People who witnessed the attack, or knew it had happened in their workplace, chose to leave. The recruitment costs for the employers accounted for about £86,000 in that limited sample. There were also income losses. Contracts to supply other firms and restaurants were lost, and so were bookings, including at the Golden Hinde. That amounted to about £400,000.

I read out some specific examples on Second Reading and will not go through them all, but a case in point is Turnips fruit and vegetable distributor, which lost almost £100,000. Aviva has not paid out despite repeated requests to reconsider. There are good and bad guys in the insurance world. The NFU came across well in its response to local businesses, although it did not cover all costs involved. I should add that some firms are still battling with insurers more than a year later. One small trader said “We keep trying” to secure payments; some had parts of claims paid. One tourist venue has a £40,000 shortfall, and is still seeking more. Some felt under pressure—both from insurers and because of business need and the impact of the attack—to accept what they were offered. One specialist alcohol producer and supplier stated that insurers had made an offer it was “obliged to accept”. The amendment could help to change that, ease the pressure and resolve outstanding issues.

I should add that others had extended terror insurance cover, including one tourist attraction and one restaurant with £200,000 of damages, which is now in dispute with its insurer over the full costs. The amendment would backdate coverage and act as an extra urge on both Pool and individual insurers to provide more flexibility and direct support.

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[Mr Wallace]

I listened to the passion that the hon. Member for Bermondsey and Old Southwark has about his constituency. I have heard similar passion from my colleague the hon. Member for Manchester Central (Lucy Powell), who also argued for such things after the arena attack.

I understand the challenges that businesses—especially small businesses—have faced, but this is one of those moments where the Government have to say difficult things. Retrospectively changing the terms of insurance would go far wider than the hon. Gentleman’s constituents. If we put in law a retrospective date, the unfortunate consequence would be that we would all pay—not for the particular issue that he has raised, but by adding risk to the insurance market, which is obviously what insurance products are based on. Insurance would never know whether at any moment the Government of the day might change the risk and table an amendment to set the date back in time. If it was not 1 January 2017, it could be the bomb damage we have seen over decades. Where would we draw the line?

[Neil Coyle]

As the Minister suggests, we draw the line at 1 January 2017 to acknowledge the unique circumstances faced by people who experienced terror attacks in our country last year, and the unique failure of the Government to address a gap that they knew about in advance.

[Mr Wallace]

I dispute the hon. Gentleman’s view of our failure to address the gap. If someone is a victim of another terrorist attack—even one that happened five years ago—they would quite rightly see it as completely unjust that their event, their damage, their loss of business or their injury was not deemed important enough to make it into the deadline of 1 January 2017. I spent my early life in places that were bombed and blown up, and I spent my early career with victims of terrorism. When I meet them, even to this day, they hold that loss to them personally. To say to them, “Yours isn’t valid, but others are,” would be deeply unfair.

[Neil Coyle]

But with respect, the Bill specifically deals with Pool Reinsurance and the Government’s extension to cover business interruption. That is all we are dealing with and that is why 1 January 2017 makes sense, as the amendment proposes.

[Mr Wallace]

The Government’s proposal in the Bill is about the future. It is about recognising, because of the lessons learned from attacks such as Borough market and the Manchester Arena, that the type of attack we are seeing now is having a major impact on business continuity and that the terrorism insurance market does not cover that enough in some areas. That is why we are taking action.

I wish I could do something about the past, and about people who did not have insurance or whose insurance companies were unreasonable, but the principle of the Government retrospectively putting that type of legislation in place would, I am afraid, have a significant impact on the insurance markets. I do not mean on their profits; I mean on us, as customers, who would understandably feel the change in risk profile. There are lots of other examples of losses, which are perhaps not as tragic as terrorism, but for which the constituents of many hon. Members would seek to claim for retrospective loss. It is not that I disagree with trying to help the victims of terrorism. It is just a simple fact about how our insurance market and the private sector work.

The principle of retrospective legislation means that it will not be possible for us to accept the amendment, not least because it raises the question of who would go and talk to all who were victims of terrorism in 2015, 2010, 1998 or 1992, when I lost 30% of my sight—would I get retrospective insurance? I am afraid that that is just the way we try to frame our legislation. The Government do not seek to denigrate people’s experiences in Borough market by saying no, but we must accept the way the insurance market and risk work. We seek to deal with that by trying to head off the problem in the future, but we cannot do it retrospectively for the last year.

Where we can, and where there are requests for financial assistance, I am happy to listen to the hon. Gentleman and help him to champion that cause, if he feels that he has not got any money for Borough market from the Government. I did the same for the hon. Member for Manchester Central and for Andy Burnham to ensure that we got the money for Manchester in that bigger pot and that No. 10 understood the importance of it. I am happy to take that on board.

[Neil Coyle]

Again, that comes back to the point and purpose of Pool Reinsurance. We have the system and funding in Pool Reinsurance to cover that event and others like it. Why would the Minister suggest a new compensation, a new tax, a new use of public money, a new job for the Government and new civil servants when there is an existing system that the amendment would allow to help to cover?

[Mr Wallace]

Pool Re insures insurers. Because of the way in which Pool Re works, the amendment would effectively intervene in existing contracts made between insurers liable for additional risk, and customers. It is not customer-facing insurance; it is not a state version of Aviva or anyone else. That is one of our biggest challenges.

There are cases in which the Government seek to use grant money to help business rate relief. We gave money to Manchester, as I think we will to Salisbury, to help tourism, to help it get back on its feet and a whole load of other things. I think we gave Manchester £23 million to deal with that.

As the hon. Gentleman alluded to, some insurance companies have been quite helpful, but not all of them; some have paid out outside their remit. I agreed with him on Second Reading in hoping that Aviva would respond with flexibility. It has since written to me to say that, contrary to my comments, it had been flexible and paid out, even for people who did not have that part of terrorism insurance—although I do not think that affects people who did not have terrorism insurance. However, I should certainly put on the record that Aviva says it has been flexible.

The Government cannot retrospectively interfere in contracts between insurers and customers, which would be the amendment’s effect. I am afraid that is why we can only try to deal with this for the future. By doing so, we will hopefully make sure that future events like that at Borough market have a minimal impact on people and that the terrorists do not win. While I do not think it is likely, I urge the hon. Gentleman to withdraw his amendment. I hope he understands that this is not about motives, but simply about the structure of the insurance market and the Government’s relationship to retrospective legislation.

[Neil Coyle]

In the debate on the last amendment, the Minister seemed to say that insurers need to up their game. On this amendment, he says that insurers must resolve again, despite there being outstanding claims. My constituents will note the Government’s muteness about their ability to help and to step in, even through this very limited amendment.

I cannot say that I am happy to withdraw my amendment at this stage, but I am hopeful that the Government will reconsider it as the Bill progresses. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Ordered, That further consideration be now adjourned. —(Paul Maynard.)

Counter-Terrorism and Border Security Bill (Sixth sitting)

Neil Coyle Excerpts

Committee Debate: 6th sitting: House of Commons
Thursday 5th July 2018 Public Bill Committees

[The Chair]

Good morning, everyone. The selection list for today’s sitting is available in the Committee Room. The amendment paper printed for today’s sitting contains, in error, some amendments that we have already considered. Please turn to page 7, where we shall begin with amendment 26 to clause 19. Copies of the written evidence received by the Committee are also here.

Clause 19

Terrorism reinsurance

[Neil Coyle (Bermondsey and Old Southwark) (Lab)]

I beg to move amendment 26, in clause 19, page 19, line 27, at end insert—

“(4) Where an event occurs which the Secretary of State has grounds to believe may be an act of terrorism for the purposes of terrorism reinsurance, the Secretary of State must within three days of the event make a statement that—

(a) the event is or is not an act of terrorism for the purposes of terrorism reinsurance; or

(b) there is not yet enough evidence to make a statement under paragraph (a) and set a timeframe for when it is expected that such a statement is likely to be made.”

This amendment would require the Secretary of State to make a statement in relation to whether an event is an act of terrorism within three days of the event occurring, or else provide a statement of when such a statement is likely to be made.

It is a great pleasure to serve with you in the Chair, Ms Ryan. I hope the amendment is self-explanatory, so I shall keep my comments to a minimum. Under the Reinsurance (Acts of Terrorism) Act 1993, the Treasury holds responsibility for providing certificates of classification for acts of terror. Members might think that that duty would more sensibly sit under the Home Office, given its wider responsibilities for policing and security. The Bill is the chance to update that obvious discrepancy and to speed up classification to better help those affected when terror attacks occur. The Government and the security services tell us that the threat remains severe so, sadly, further attacks will come.

Under existing arrangements, the Treasury is supposed to classify within 21 days, but in practice that varies widely. There is also a contrast with individual Ministers, who often state on the day or the next day after an attack occurs that it was terrorism, but official certification takes longer. Ministerial comment should act as a guide to insurers and others involved, but the practical experience at London Bridge and Borough market in my constituency has taught me that that does not always happen, leaving those distraught after an attack with further problems just knowing how and when those with insurance can claim back losses.

I believe that the Westminster attack took 11 days to classify, and the London Bridge and Borough market one took far too long to declare: that happened 21 days after the attack, and only following pressure as a result of an Evening Standard intervention on behalf of classification. Those delays have consequences. The amendment aims to tackle situations in which businesses hit by terrorists are then held up by a convoluted process in moving on with their lives and their business.

As mentioned on Tuesday, claiming on insurance after attacks is tough enough. One insurer told a business affected by the Borough market attack that it was not covered for terror attacks, and the same insurer told another firm—one with terror insurance—that the Borough market attack had not been classified and that no payment could be made. That is simply not good enough, and the amendment would end that bad practice.

The amendment would allow for swifter declaration, in line with ministerial statements, and would protect businesses further and better. The uncertainty and delay over London Bridge and Borough market caused more anxiety for those affected at an already difficult time. It is unnecessary and unhelpful to experience delays in accessing the support that is supposed to be there in very tough circumstances, with businesses already badly damaged.

Ministers have claimed previously that London Bridge and Borough market took longer to classify due to the involvement of three police forces: the British Transport police, the Met and the City of London police. Blaming police forces that did so much to end the attack so swiftly and to help all those affected is simply distasteful. The amendment could provide a swifter process, to prevent police officers from being blamed for delays to classification.

Members may have concerns that a three-day limit is too short a timeframe in more complex incidents, but the amendment is designed not to be overly prescriptive—I thank the Clerks for helping me draft it. Cyber-attacks, by their very nature, can take more time to identify—months, in some cases—and any return to planting bombs around buildings or infrastructure without the involvement of suicidal attackers might also take more time to investigate to confirm motives. The amendment would allow for that.

The three-day process is designed for the more obvious attacks, such as that in my constituency last year. Ministers and the Prime Minister stated on the day that it was a terror attack—weeks before formal classification. However, the amendment includes a means of deferring formal declaration for more complex attacks. It would make a helpful, practical difference to employers affected by terror in the immediate aftermath. For attacks that take longer to classify, the amendment allows a statement to be made indicating what that time might be. At the time of any event, and in the face of all the facts, which may or may not be in the public domain, it would be entirely up to Ministers to make that statement and give direction, without that being burdensome.

The proposal would allow insurers and Pool Reinsurance to step in more swiftly to support those affected by any future attack. I hope that the amendment is welcomed by the Government, and I look forward to the Minister’s reply.

[The Minister for Security and Economic Crime (Mr Ben Wallace)]

It is nice to serve under your chairmanship, Ms Ryan.

As the hon. Member for Bermondsey and Old Southwark (Neil Coyle) explained, the intention behind the amendment is to ensure that the Government make a public statement three days after an incident about whether it is an act of terrorism as defined by the Reinsurance (Acts of Terrorism) Act 1993. If that is not possible within three days, the amendment would require the Government to provide an estimate of when they will be able to make such a statement.

The amendment would significantly alter the current process, and would introduce uncertainty for businesses and insurers during what is already a stressful and challenging time, following a terrorist attack. The 1993 Act requires that reinsurance and guarantee arrangements can be extended only for losses related to acts of terrorism, as defined by the Act. There is an established contractual process, under which an incident is certified as an act of terror in accordance with the 1993 Act. That important process is designed to give the insurance industry certainty about whether an incident is within those reinsurance or guarantee arrangements.

In the case of the Government-backed terrorism insurer, Pool Re, Her Majesty’s Treasury has an agreed deadline to certify whether an incident is an act of terrorism. It must do so within 21 days of receiving a certification request from Pool Re. It is worth clarifying that Pool Re’s formal certification request may not necessarily arrive on the day of the terror event, as it is driven by whether any of its members have received a claim.

The Treasury treats certification as a priority, to ensure that Pool Re and its members can proceed with the claim process. That means that businesses can get the financial protection they have paid for through insurance contracts. The Westminster, Manchester and London Bridge attacks in 2017 were all certified within 21 days. For example, the Manchester Arena attack was certified within five business days of the certification request being received from Pool Re.

Once such a request has been received, Treasury officials consult the police and the Home Office before giving advice to the Chancellor of the Exchequer, who makes a final decision about whether an event should be certified as an attack. That certification process properly sits with the Treasury, as the Chancellor’s approval is ultimately required to authorise any financial support required for Pool Re.

Pool Re is not the only underwriter of terrorism risk in the country. Many businesses across the UK are insured via contracts with different terms, conditions and certification processes. That means that if the Government were to make a public statement about the status of the certification process, as it related to Pool Re, it would risk confusing those businesses about the status of their own claims.

I know that the hon. Member for Bermondsey and Old Southwark is particularly concerned about the length of time it took for the horrific terrorist attack in his constituency in June last year to be certified, and I am very conscious of the impact that any delays can have on businesses. I have therefore asked that our officials look at why the process is not quicker after a Pool Re certification request comes to the Treasury, given that, as Security Minister, I sometimes know within minutes or hours whether an attack is a terrorist offence. Indeed, the head of counter-terrorism often makes a public statement to that effect within hours, not days.

I have taken the essence of the hon. Gentleman’s amendment and his constituents’ concerns and sought to follow up to see why it takes so long when a request enters the Government system—I cannot do much about how long it takes for claimants to submit a claim. The clock starts not once the event happens but once a claimant makes a claim to an insurer, and then the insurer triggers the Pool Re request. That could take time, depending on loss adjustment and that end of the process.

I assure the hon. Gentleman that I will seek to improve the performance of the process and to find out why it takes so long once the Government formally receive a request. His point is well meant, and I do not disagree with it. I cannot see why the process takes so long in some cases. I assure him that I will follow that up. I hope my assurances, which I will keep the hon. Gentleman updated on, are enough to persuade him to withdraw his amendment.

[Neil Coyle]

I thank the Minister for his response. The difficulty is that he wants a reactive system, whereby insurers wait for someone to get in touch with them, but I think we should have a more proactive approach. Insurers should step in as soon as a Minister makes it clear that a terror incident has occurred. However, on the basis that the Minister is seeking further advice before the Bill progresses any further, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Neil Coyle]

I beg to move amendment 27, in clause 19, page 19, line 27, at end insert—

“(4) After section 2 of the Reinsurance (Acts of Terrorism) Act 1993 (Reinsurance arrangements to which this Act applies) insert—

‘2A Duty to advise on terrorism insurance

(1) Where the conditions in subsection (2) are met, an insurance provider has a duty to advise on the available insurance related to losses sustained as a result of acts of terrorism.

(2) The conditions referred to in subsection (1) are—

(a) that a person asks the insurance provider for advice in relation to insurance (whether related to terrorism or not); and

(b) that it seems to the insurance provider that the person may benefit from insurance in relation to a loss which is covered by terrorism reinsurance arrangements under this Act.

(3) In this section, “insurance provider” means—

(a) a person regulated by the Financial Conduct Authority or the Prudential Regulation Authority who sells insurance, or underwrites the risk of such insurance, or

(b) the agent of such a person.’”

This amendment would require insurance providers to advise on the insurance available in relation to losses sustained as a result of acts of terrorism.

I thank insurers and brokers for all their help since last June, including the Association of British Insurers and the British Insurance Brokers’ Association. The amendment would require insurance providers to advise on the insurance available in relation to losses sustained as a result of acts of terrorism.

The Government have been commended for belatedly acting to better extend the Pool Reinsurance model to cover contemporary forms of terrorism. Having seen my constituency attacked without the adequate protection that could have been available, I am slightly more reticent to congratulate them. However, covering non-physical damage and allowing employers to be covered for all business interruption issues arising from a terror attack is a significant step forward for people and firms who might be affected by future attacks.

There were firms at London Bridge and Borough market that were affected by physical damage from the vehicle that was used initially in the attack on the bridge. The vehicle ended its journey on the edge of the bridge, damaging the Barrowboy and Banker and the London Bridge Experience. Some buildings incurred other damage during the attack, including bullet holes from the swift police response to end the brutal rampage. However, most of the damage was non-physical, as we discussed on Tuesday. The closure of premises; the lack of access to stock; the loss of stock; the inability to contact customers; lost bookings; lost contracts; and employees leaving, with the associated recruitment costs, are all forms of business interruption, as highlighted on Tuesday. Extending coverage for those matters as standard in future attacks is welcome.

The Government tell us the threat remains severe, so it is likely we will witness more atrocities, sadly. The Government are taking one step towards better cover, but they need to recognise the broader issue of coverage. Even when the Bill is enacted and implemented, coverage will have another limitation: terror insurance will still need to be held. “Market penetration” is the term the sector uses. The Minister spoke on Tuesday about insurers and brokers upping their game. In effect, the amendment would help to ensure that they do and that more firms take out protection through better awareness of the offer when advised by insurers and brokers.

The British Insurance Brokers’ Association estimates that less than 2.5% of 5 million UK businesses have terror insurance. That leaves vast swathes of employers and jobs at risk under the severe threat that the Government tell us exists of another attack. The amendment is designed to help tackle that issue and increase take-up.

There are options. The Government could compel Pool Reinsurance to advertise, but have never done so. Pool Re has been left alone, with the consequence that coverage has been inadequate in terms of what is protected and who has bought into the system. My personal preference would be to compel larger employers and firms with higher turnover to hold terror insurance. That could be done alongside compelling some form of direct marketing of terror insurance and Pool Reinsurance to businesses, especially in areas known to be at greater risk. I appreciate that that is not the Government’s approach, so my amendment is designed to find a means of promoting coverage that is not onerous, that facilitates choice for all firms, that reflects the level of risk in different areas and that has a means of delivery that is not burdensome on those involved.

The amendment would compel insurance providers and brokers of insurance to offer terror insurance and to advise on the merits of terror insurance and the risks of not having it. Individual businesses would still be able to make their choice based on circumstances, including location, but the offer must be made, and advice must be given on the pros and cons and risks involved.

I am aware that Pool Reinsurance has adapted its package and support, and now offers a £30 arrangement to cover up to £500,000 in damages. The costs of taking up support are not massive for most firms. The amendment facilitates better awareness of the package and helps build resilience in the pool through greater coverage and protection for more businesses. The amendment would obviously work most easily in terms of direct sales with firms and drawing up new contracts, but it goes further.

In discussions with insurers and brokers’ representatives, I am aware that a lot of insurance is bought online in standard packages. The amendment would not alter that. Firms offering those deals would simply need to consider adding terror insurance to those them, or to add an automated trigger system to ensure follow-up correspondence advising on terror insurance and its benefits. That’s it—it’s simple.

Under existing packages and arrangements, insurers and brokers could also go back to customers to flag up their new requirement to offer terror insurance—a responsibility that is on them and not on customers, who have only to consider their advice. I acknowledge that there are costs to put that in place, and those are costs for the insurers, who have overseen the very low record of take-up, which puts more firms, jobs and revenue for the Treasury at risk in the event of further terror atrocities. Ignoring the massive gap should not be an option. It is not in UK plc’s interest to perpetuate the current lack of take-up.

Borough market is an example of where, even when terror insurance was offered, it was so basic that some firms declined to take it up because it was limited to physical damage only. Traders felt they were unlikely to have their stalls blown up. However, they have lost considerably because of the attack last June—£2 million, as discussed on Tuesday. They needed to have better coverage in place and to have been made better aware of what coverage was possible. If terror insurance had—the Bill addresses this—covered business interruption, and they had been advised on it, more take-up would have occurred. It should not be an either/or scenario. The Government are making the business interruption changes, but they are not focusing enough on how to drive up the coverage, which is also essential.

This amendment comes from the practical experience of Borough market and a desire to ensure that other areas are not so badly affected in the event of future attacks. I hope that it will receive Government support as our consideration of the Bill progresses. I would welcome discussion of it now and an indication of the Minister’s position.

[Mr Wallace]

I am very conscious of the wider impacts of terrorist attacks on surrounding communities and businesses. However, I am afraid that there are several issues with the proposed amendment and its objective. Most prominent among those is the increased regulatory burden that would arise from the amendment. That would be likely to lead to an increase in the cost of insurance for people across the UK, as the hon. Gentleman has said, as well as for businesses being sold terrorism insurance instead of other insurance products that might better suit their needs.

The amendment would also impinge on the existing regulatory protection provided by the Financial Conduct Authority. The FCA’s “Insurance: Conduct of Business” sourcebook sets out the regulatory framework for the conduct of insurers and brokers in the United Kingdom. It aims to ensure that customers are treated fairly and given clear and fair information when they are sold insurance. These rules already include an obligation on firms involved in selling or providing advice on insurance to make sure their customers have sufficient information to make an informed purchase. In practice, that would mean that if terrorism is excluded from a business interruption product that is being purchased by a business, the broker should tell them, so that different businesses can consider whether a different product might better suit their needs.

If a customer feels that they were not provided with advice that met that requirement, they can ask for a review by the Financial Ombudsman Service. That service is open to individuals as well as to small and medium-sized enterprises with less than 10 staff and an annual turnover of up to €2 million. Larger businesses can take their insurer to court.

The amendment would also reduce the flexibility of the existing regulatory framework and potentially stifle innovation. That is because further primary legislation would be required to adjust the statutory duty in the future if necessary, unlike with the rest of the FCA’s rules, which can be updated quickly in line with trends in the insurance sector.

By imposing a specific statutory duty outside the FCA’s regulatory framework, the amendment would also risk significant additional consumer detriment. It would require any firm involved in providing advice on insurance products or selling insurance products to consider whether terrorism insurance was relevant to every one of their customers. In practice, that would mean that such firms would have to consider whether individuals and businesses would benefit from terrorism insurance when they are looking to purchase other insurance products, such as home insurance, mobile phone insurance, travel insurance and motor insurance.

This prescriptive approach would likely result in cases of mis-selling and an increase in the cost of insurance. That would be driven by firms that are more concerned about avoiding penalties for breaching a new requirement cost than the interests of their customers, as well as by firms introducing new processes to ensure they are compliant with the amendment.

The amendment might also result in those firms over-prioritising the sale of terrorism insurance relative to other risks, which might be a greater threat to an individual business. There are over 5.7 million SMEs in the UK. It is not generally the Government’s role to prescribe to those businesses the risks against which they should be insured.

Officials at the Home Office, the Treasury and the Department for Business, Energy and Industrial Strategy are working on options to improve take-up of insurance by businesses and by SMEs in particular. This is part of an holistic approach, looking at insurance as one of the many steps that an SME can take to improve its resilience to financial shocks.

Given the steps that are already under way to improve take-up, the existing protections already available through the UK’s regulatory framework, and the potential for significant additional costs to consumers—

[Neil Coyle]

On that specific point about increasing take-up, will the Minister explain how take-up is being encouraged and what level he expects it to be at within, say, three years of implementation of the Bill?

[Mr Wallace]

The Association of British Insurers and the insurance broker trade industry do great amounts of marketing and promotion to get people to buy insurance and be protected and covered. The biggest threat to us all in the insurance space is inappropriately covered people, whether that is in terms of terrorism or anything else. That is a constant challenge to the industry, often because a number of its risks are mutually pooled, as we were talking about when considering a previous amendment on motor insurance. Therefore, it would be in the interests of the insurers to ensure that people have appropriate insurance for their risk; that is quite important.

The Government can play a role in highlighting awareness of the threat of terrorism. Everyone here will be very aware of the shift in terrorism over the last 18 months; it has been top of the news most weeks. Probably like everyone else, I will look at whether my travel insurance for my summer holiday covers terrorism—well, I am going to Wales, but if I was not, I would check that. The difference between me and the hon. Member for Bermondsey and Old Southwark is that he wants the Government to direct the insurance industry to tell people about that insurance. The position of the Government is that the FCA should use its regulations and advice to be more responsive, and we should not use primary legislation.

Members on the Government side of the House would also say that there is some onus on the customer to seek the most appropriate cover from their insurers to match the threat that they face. That is where we differ, and it is why I urge the hon. Gentleman to help us seek a way to improve take-up through the building up of marketing and promotional material on getting the right insurance, and indeed through regulations, rather than primary legislation. A project is under way to improve take-up, and I will write to him with further details if he would like me to. I urge him to withdraw his amendment.

[Neil Coyle]

I think the Minister has slightly misinterpreted my suggestion. I did not suggest placing an obligation on customers to purchase insurance—merely that insurers advise on its availability. On Tuesday the Minister talked about insurance market failure in some areas, and this will be a missed opportunity to correct that failure. However, on the basis that the Minister will outline the awareness-raising activities that the Government will undertake, and in the hope that doing so will allow a discussion before the Bill goes to the Lords, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

--- Later in debate ---

[Nick Thomas-Symonds (Torfaen) (Lab)]

I raised this issue on Second Reading. I generally welcome the clause. The original provision in section 2 of the Reinsurance (Acts of Terrorism) Act 1993 restricted the loss that could be claimed for loss of, or damage to, property and for consequential loss, which I am afraid therefore excluded business interruption in situations in which there was no direct damage to property. The clause solves that problem and will explicitly insert business interruption as a form of loss in that section of the 1993 Act. That is welcome, because it recognises that the terrible acts of terrorism that we see have an impact on the wider community and have a financial impact on businesses in terms of lost trade.

However, I want to set out the concern about businesses that have suffered losses in the past. I pay tribute to the work of my hon. Friend the Member for Bermondsey and Old Southwark, who has campaigned tirelessly for his constituents on this issue after the terrible atrocity that occurred at London Bridge and Borough market in his constituency. He eloquently put the case today and last week for dealing with these iniquities in the system.

I hear what the Minister says about looking into the past. Wherever a line is drawn, it will, of course, lead to further unfairness because of the events that would fall on the wrong side of it. However, will the Minister at least undertake to look at whether anything can be done with respect to some of the losses occurring through business interruption in Borough market and elsewhere, so that no stone is left unturned as to whether any form of help can be provided? I would be very grateful for that reassurance from him.

[Neil Coyle]

I rise to speak to new clause 4. I have nicknamed this “the resilience clause”, and I hope it will be adopted to protect UK firms. I will speak as briefly as possible, but I will touch more generally on clause 19, for which I have been campaigning for the last year, and I am grateful to see it emerge now. Had it been in place before last year, it would have made a huge difference to those affected by the terror attacks at Borough market and London Bridge last June. I have been seeking this through Westminster Hall debates, so I am pleased to see it. I am disappointed that, as my hon. Friend the Member for Torfaen just said, the Government are yet to offer any form of compensation—a single penny—for the damage felt and caused at Borough market and London Bridge last year. I will keep campaigning for that.

New clause 4 would ensure that terrorism reinsurance arrangements are kept under annual review by Pool Reinsurance, and would require the Secretary of State to respond to Pool Reinsurance recommendations in relation to terrorism reinsurance. The clause is designed to prevent the Government-backed system from falling behind terrorist methods and their future impact. It would help to build resilience in our anti-terror structures overall. The clause would require Pool Reinsurance to provide an annual report on the nature of terrorism and any need to improve the systems designed to protect UK citizens and businesses from the form of terrorism we currently face, and to advise on how it is changing and what we might expect in future.

If that system had been in place from the introduction of Pool Reinsurance in the 1990s, it could have ensured that as the Provisional IRA threat of physical damage to economic infrastructure diminished and as terrorism morphed into the deliberate targeting of innocent civilians with knives and vehicles, the pool would have adapted accordingly over time, or at least have had the potential to do so. The Provisional IRA targeted buildings—physical economic infrastructure—not civilians. The pool was designed for that early 1990s threat, after the devastating Canary Wharf and Manchester Arndale attacks. Sadly, the system has not been updated properly over time as the nature of the threat has changed and, with it, the impact on businesses and employers’ insurance needs.

As discussed on Tuesday, Pool Reinsurance, despite warnings dating back to at least February 2016, has not been updated swiftly enough by the Government to cover the brutal attacks against innocent people, such as those enjoying Borough market on Saturday 3 June last year. That should have been possible, and the new clause will ensure that it will be going forward. The pool should never be left to slip behind again. The duty would ensure an annual appraisal of the nature of terror threats and their potential impact on businesses in particular, and would ensure that advice and recommendations are provided on how to adapt to better protect under-insurance systems from contemporary systems, and who or what terrorists target.

The duty would be on Pool Reinsurance, but the clause is not prescriptive regarding how it would work in practice. The pool could involve a range of stakeholders, including Government Departments, ABI, BIBA and business representatives. The wording is kept simple enough to prevent too onerous a system, or too rigid a structure, from developing. The duty is on Pool, because Pool is obviously in a strong position to provide overview from a tactically strategic position, and at no new cost. Pool already provides a quarterly terrorism frequency report, which could form the basis of any future annual reporting of risks and the UK’s ability both to prevent companies from losing out and to protect employers and employees from job losses as a result of insufficient coverage.

I believe that Pool would welcome the role. It has already sought to improve its insurance coverage in terms of packaged costs, awareness of cover and extending the support offered after different forms of attack, including both cyber and business interruption. However, Pool’s work has not always been swiftly acted on by Ministers, creating the gap that so badly affected London Bridge and Borough market in my constituency last year, and that the Bill is aimed at addressing.

Pool Reinsurance would report, and make recommendations, to the Secretary of State, who would be obliged to reply. That obligation is not massively onerous, especially given the huge range of responsibilities, and the clause suggests an ample three-month timeframe. I hope that the proposed new clause will have the backing of the Minister, and I would welcome an indication of whether the Government will pursue it in the Bill’s later stages.

[Mr Wallace]

I understand what the hon. Gentleman is trying to do, which is, in order to ensure that we do not miss the impact—in terms of how victims of terrorism are dealt with—of the changing threat, to have a review of that to ensure that all the holes in cover are plugged in future. The only point on which I differ from him is in understanding what Pool Re is.

--- Later in debate ---

My point about Pool Re’s different structure and its interests does not seek to undermine what it is. It has within it some extraordinary people who know about risk and about security, but it is the role of Government, rather than them, to be doing that. If I can get back to the hon. Gentleman about what I think would be a good way to take that forward, so that we can have confidence in the future that these things are pointed out and followed up, I would be happy to do so.

[Neil Coyle]

Is the Minister suggesting that Pool Re is seeking to extend its role beyond where it should? Is he suggesting that the Government and Ministers are in a better position to judge the impact—bearing in mind that the overall clause is about terror insurance—and to advise on what should be covered than Pool Re, which is already there doing the job and has sought to have cyber-attacks, and the kind of non-physical damage we have seen mentioned in this clause, brought into coverage? I would slightly disagree.

[Mr Wallace]

We have to be careful. Pool Re is, first of all, not the only organisation in the marketplace. The Government have a duty to all the insurers, including Pool Re, to indicate where risk, certainly in the security space, is developing or currently stands. We must be minded that it is not a stand-alone organisation. It should be the Government who indicate risk in security. It is our JTAC, the joint terrorism analysis centre, that indicates, independently of Ministers, what the latest analysis shows about where a security threat is developing. We raise severe threat levels and so on.

It is not the Government’s job to tell people how to do the insurance, and we would not seek to tell Pool Re how to carry out or issue insurance policies, but it is the role of Government—because the Government are independent of that vested interest—to be the owners of understanding where the threat is going and being able to pull together all those experiences. It is from the hon. Gentleman’s experience as a constituency MP that he has learned about his businesses in Borough Market. The police will have their experiences, as will the ambulance service and so on.

If we are to really get to grips with understanding the vulnerabilities, it requires someone who is set aside from the insurance industry. I do not think it would involve the Government producing a report saying, “You must insure this, and this is how you do it.” I think it would be the Government saying, periodically, “Let’s have a look at what has happened, what has been missed out, what the public need to be aware of and what action they need to take.” That is where I would sit; that is the issue I have with the start point of the hon. Gentleman’s new clause. Again, his meaning is not misplaced and nobody in the Committee disagrees with his determination to improve his constituents’ opportunities to get insurance, but I see it as a question of how we will get there.

[Neil Coyle]

My concern is that an expert body already exists specifically with this focus of terrorism reinsurance—a body that could do this job and in part does it already through the advice it offers. The new clause would formalise that role. Instead of taking that approach, the Minister seems to want to take on an even bigger Government, a bigger state and more civil servants. I thought we were meant to be the party of big Government, not the Conservatives, so I am confused.

[Mr Wallace]

The hon. Gentleman’s question would basically mean asking an insurer “Whom should we insure?”. As to the role of Government, they have secret intelligence at their fingertips, and have numerous reviews. After the Manchester attack, dozens of reviews took place over the past year; we have all of that. Some of it is secret, and some is not. That can help us understand and be better informed. We have no interest in the outcome of that.

[Neil Coyle]

Has Pool Reinsurance ever asked the Government to cover something that is not now covered—be it business interruption or cyber? Has that ever happened? That is what the Minister seems to be suggesting. Under the new clause the Minister would respond to recommendations. That is where the points that he makes would come in.

[Mr Wallace]

We have lots of discussions with Pool Re and many other insurers, and it has asked about cyber, as the hon. Gentleman has suggested. I have met its representatives several times, being the Security Minister. It has asked to do cyber, and we then take that into the process and go to the Treasury.

--- Later in debate ---

[Neil Coyle]

That was not my question.

[Mr Wallace]

We are not going to agree: I view the role of the Government in this space as being able to review an incident, take input from communities, police, ambulance services and everyone else who has dealt with damage, add that to the secret intelligence they have on emerging threat, and come up with a position.

When we do such reviews they are significant. In the case of Manchester attack, the operational improvement review alone was 1,300 pages. Every detail was examined. That is where that type of advice to the market, including Pool Re, should come from. Clearly we are not going to agree on that. It is not that Pool Re is not a great organisation; but it is owned by its members and is a reinsurance company. Call it big state, if you like, but I think that the role of the Government of the day is to be able to direct it. That is the right place for it to sit, so I urge the hon. Gentleman to withdraw the new clause.

--- Later in debate ---

[Mr Wallace]

The hon. Gentleman makes an important point. I spoke to the hon. Member for Bermondsey and Old Southwark after the Committee sitting last week. After last year’s attacks, mayors and local authorities got together and produced requests of Government, which we met, with £23 million or £24 million in Manchester. We also met a request from Salisbury.

I said to the hon. Gentleman, “Let’s meet and speak with the local authority that covers Borough market and put together an ask.” I did not receive a reply from the Mayor of London on that, but we did receive replies from the Mayor of Manchester and the Salisbury council leader. I am happy to sit down and see what we can do. We gave an extra £1 million to the NHS to deal with some of it, but in comparison, for the Manchester package—the hon. Member for Manchester Central (Lucy Powell) was involved in that—we gave in response to a big long list of everything, from a marketing budget—to help that great city attract people back—to help with infrastructure and so on.

I am happy to meet the hon. Gentleman and his local authority and say, “Okay, come on—what is it you seek?” whether it be business rate relief or whatever. The Treasury will go mad at me for suggesting that. The point is, I have not received such a request, but I am happy to help stimulate it and will also work with the Mayor of London to do so.

[Neil Coyle]

I will certainly take the Minister up on that offer. Those who have been affected and are trying to rebuild their businesses—some are still in combat with insurance companies—have put further effort, while their businesses have suffered, into a request. That was put to a BEIS Minister, who came to the Borough Market Trust and met those directly affected. It was also put to a Treasury Minister here in Westminster when traders came to talk about their experience and ask for help. Those requests for support have been made, but to date they have not been acknowledged.

The Prime Minister visited the site and came back for the commemorative service. She was obviously welcome to do so, but she was aware of what had happened, its direct impact, the lack of insurance cover and costs involved for some, including microbusinesses, who could have gone under without public support. It is a little unfair to suggest that a request has not been made, but I will look to draw up something more comprehensive with the leader of the council, Peter John, and the Mayor of London and come back to the Minister with that. I thank him for the offer.

Question put and agreed to.

Clause 19 accordingly ordered to stand part of the Bill.

Clause 20

Border security

Question proposed, That the clause stand part of the Bill.

[Mr Wallace]

The clause simply introduces schedule 3, which confers powers exercisable at ports and borders in connection with the questioning and detention of persons for the purpose of determining whether they are or have been engaged in hostile activity. It fulfils a mechanistic function; the new powers will be best discussed when we debate schedule 3.

Question put and agreed to.

Clause 20 accordingly ordered to stand part of the Bill.

Schedule 3

Border security

Counter-Terrorism and Border Security Bill

Neil Coyle Excerpts

3rd reading: House of Commons & Report stage: House of Commons
Tuesday 11th September 2018 Commons Chamber

[Mr Wallace]

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

On 22 May last year, I was woken from my slumber by the tragic news of the attack on the Manchester Arena: the murder of women, children and men who had been out enjoying their day and night at the arena. A member of ISIS chose to target them ruthlessly, in a way that showed total discrimination, when they were at their least defensible. Last year, society faced numerous attacks from terrorists. In March this year, we saw the reckless and very dangerous use of the Novichok nerve agent on our streets, which sadly led to the death of a British citizen.

The Government did not knee-jerk—we did not jump, as has sometimes happened over the past few decades, to take measures. The Government considered the issues, considered our vulnerabilities and not only took strong steps to produce a Bill that will help our security forces and our police tackle the changing threats, but were determined to be as collaborative as possible throughout the legislating process. Tonight, Members will have heard how we rightly accepted the observations from the Labour Front Bench and the SNP about some of the measures. The Labour party and the Government discussed the streaming of content online and came up with a sensible solution to make sure that people who stream horrific material are brought to justice.

This is not an attention-seeking Bill; it is a Bill designed to make a difference, to make our streets safer, to make our citizens safer and to send a message that one of the reasons the United Kingdom is one of the world leaders in counter-terrorism is that we not only learn our lessons from every event, but build on the experience of previous Governments. Much of the Bill is built on the back of the Terrorism Act 2000, which was brought in by the last Labour Government. We have taken the best elements and learned from our experiences and the threats to produce a piece of legislation that in my view and that of the Government strikes the right balance between liberty, individuals’ rights and the security of this nation. It is a balance that we do not take for granted and that we review constantly.

That is why this country probably has some of the greatest oversight of its intelligence services, ably led by my right hon. and learned Friend the Member for Beaconsfield (Mr Grieve), the judicial commissioners, Lord Justice Fulford and the independent reviewer of terrorism legislation. All those learned and respected individuals take a strong role, as do the Members who sit on the Intelligence and Security Committee, in scrutinising the people who are charged with delivering the security of this nation. That, coupled with our long adherence to human rights, makes me confident that the Bill does not tip the balance in the wrong way, but navigates the difficult course that we are faced with, given the emerging technologies, to keep people safe.

[Neil Coyle (Bermondsey and Old Southwark) (Lab)]

I am grateful for the approach that the Minister and the Secretary of State have taken and for the fact that the loophole in terror insurance to cover non-physical damage has been addressed in the Government’s plans. However, the explanatory notes suggested that the Government would do several things to support my community, which was so badly affected last June, yet still not a penny of Government support is going to the employers in my constituency who were affected by that terror attack. Despite the fact that the Government failed to update the legislation sooner, that could have been done some time ago and was not. My constituents and their businesses are still not being compensated for the damage they have experienced—150 firms have lost more than £2 million.

[Mr Wallace]

The hon. Gentleman made that point in Committee. I was due to meet him last week. Unfortunately, because of the Salisbury issues, that meeting was delayed, but I will meet him. I have spoken to the Exchequer Secretary. The hon. Gentleman is right about some of the issues with the package for his community, compared with what has happened after other events. That is a discussion for us to have with the Mayor of London.

[Neil Coyle]

rose—

[Mr Wallace]

The hon. Gentleman’s points are well made but, with respect to him, I need to draw to a close.

If it is passed, this Bill, much of which has the support of all parties in this House, will leave this House doing the right thing to keep people safe, striking the right balance with our rights and allowing us to remember those people who in the last few months and years have lost their lives tragically to terrorism and, lately, to the actions of a hostile state. I am afraid we must remember that out there, there are very bad people, very bad terrorist organisations and, nowadays, some very bad states who wish to do real harm to our values. This Bill protects our values, but deals with the issues and gives our security services and police forces the tools that they need.

--- Later in debate ---

[Neil Coyle]

I welcome the Government’s attempt to use this Bill to close the terror insurance loophole, with the two provisos already mentioned, but there are other concerns that have not been addressed. Even if terror insurance now covers non-physical damage, the take-up of terror insurance covers only about 2.5% of UK businesses, and the Government have not addressed how to boost take-up and ensure greater coverage.

I thank the Minister for his letter, which I received today. It addresses two further issues. First, it is good that certification will be sped up, but there is no detail in the letter as to how that will be done. Secondly, there is no detail in it about how the potential for legislation to become out of date again will be addressed other than through a vague assurance. I hope that more detail will be provided in the other place.

The Bill was an opportunity to address the fact that some seek to take profits out of public generosity and public support when terror attacks occur. Sadly, giving only half a million pounds in profits, above admin costs, in the last year alone for Grenfell, Manchester and the London Bridge and Borough market attacks is appalling. That is pickpocketing from the victims of terror and it should have been addressed here. I hope the Government will look at this again before the Bill reaches the House of Lords.



Question put, That the Bill be now read the Third time.