National Security

Tom Tugendhat Excerpts

Tuesday 1st November 2022 Commons Chamber

[The Minister for Security (Tom Tugendhat)]

Thank you, Madam Deputy Speaker, for being here for both my first and second outings at the Dispatch Box. I am extremely grateful that Mr Speaker granted the statement and that it follows the urgent question. Again, I pay tribute to my hon. Friend the Member for Rutland and Melton (Alicia Kearns), who took over the chairmanship of the Foreign Affairs Committee from me, not only for the urgent question but for her work over many years in standing up for our freedoms.

I would like to make a statement on national security and safeguarding our democracy. In this new era of global competition, we face constant and concerted efforts to undermine our country and our institutions. A range of actors, including foreign states, are trying to weaken us, to challenge us and to exploit us. We are not alone. It is the burden of liberty shared by democracies around the world. The evidence of that is clear and, sadly, indisputable. Dictatorships are trying to write new rules for a new world. Russia’s illegal war in Ukraine is a terrible example of the growing threat from hostile states to our security. Russia is attacking not just a free people but a free world.

Our integrated review, published last year, makes clear the threat that we are facing. This is not a simple clash of armour but a clash of ideas. Across our society, we are seeing the challenge grow and evolve to pose a strategic threat to the security and prosperity of our nation for many years to come. A generation ago, we had the answer: our technology and our wallets were greater than theirs. Today, technological integration has deepened connections and opened doors into areas of our lives that we once thought closed. Now, as our markets integrate, we need to think about the future of our industry and innovation. Our economic security guarantees our economic sovereignty just as our democratic security guarantees our freedom.

The advanced technologies that our rivals have spent time and money developing have levelled the field and made us more vulnerable. Britain has been on the frontline of the defence of liberty for generations. Our agencies and businesses have faced the reality of this danger for decades. Our Parliament and our politics are now no different. Whether as Ministers or shadow Ministers, on Committee or when leading a campaign, this is about every party and every Member of the House. We have all heard of the attempts of unfriendly states to influence our politics in recent years and of the actions that the security officers of the House have had to take to defend us. They are not working alone. I want to put on record my admiration and gratitude to those who work hard to keep us safe in the House and around the country, because while others are on the frontline of our nation, those of us privileged to be elected—at every level and in every community—are on the frontline of our democracy.

I am here to make it clear that the Government are, and always will be, here to protect our freedoms, and none is more precious than the freedom of our nation to determine its own future. That is, after all, what democracy is about. It is the debate in towns and villages—in person and online—of free people in a free country searching for answers to the problems that we all face. As all of us know, it does not always go our way, but it is the freedom to choose that we all defend. We are taking action to address these threats.

Just as our counter-terrorism legislation in the early 2000s updated the necessary legal powers that our police and security services needed to tackle the growing threat of terrorism, we are enhancing our ability to defend against hostile states and those acting on their behalf. The National Security Bill, which is currently before the House, will give us the powers we need today for the threats that we face now. It will be the most significant piece of legislation to tackle the incursion of state-based threats to our nation in a century. Those actors threaten not just life but our way of life. We have to work even harder to protect and uphold our freedom and the institutions that defend it. From establishing our Defending Democracy programme in 2019 to the continuous work by the National Cyber Security Centre, we have sought to address that, but we must do more. That is why I can announce to the House that the Prime Minister has asked me to lead a taskforce to drive forward work to defend the democratic integrity of our country. The taskforce will work with Parliament, Departments, the security and intelligence agencies, the devolved Administrations and the private sector. It will work to better protect the freedoms and institutions we hold dear—institutions such as this very House.

The taskforce will look at the full range of threats facing our democratic institutions, including the physical threat to Members of this Parliament and those elected to serve across the country, so tragically brought home by the murder of our dear friends Sir David Amess last year and Jo Cox in 2016, and the support on offer through Operation Bridger and by the police. The work of this Taskforce will report into the National Security Council and more details will be set out in the update of the integrated review.

This is not just a taskforce for this Government. It will be cross-departmental and inter-agency, and I will be inviting cross-party co-operation, because, as I have said, this is not just about Ministers in office, civil servants or advisers across Whitehall. This work is for all of us in this House and those who have asked us to represent their interests. The Government have robust systems in place to protect against cyber threats. We are vigilant in ensuring that these are up to date and meet the challenges of the modern world. The National Cyber Security Centre, Government and parliamentary security offer all Members specific advice on protecting personal data and managing online profiles, as well as best practice guidance. I am grateful to Mr Speaker for agreeing to write to all parliamentarians on that important issue.

Finally, it is important to end by underlining that tackling these threats means providing the protection that defends our democratic institutions and the liberties that we cherish so dearly, because the point of security is not to lock us down but to liberate. My job as Security Minister of this great United Kingdom is to give us all the security to live our lives freely, and to debate and choose our future, guarded by the laws and freedoms of our nation. That is my guiding principle. I commend this statement to the House.

[Madam Deputy Speaker (Dame Eleanor Laing)]

I call the shadow Home Secretary, Yvette Cooper.

[Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)]

I welcome the statement from the Minister for Security. I know this is an issue that he personally takes very seriously. It is the first job of every Government to defend our national security from hostile states who wish to do our country harm and who strain every sinew to do so with the most sophisticated technology and resources, and from malign actors and extremists, both here and abroad, who want to do us harm and undermine both our democracy and everything we stand for. We pay tribute to the remarkable work of our intelligence and security services who work so hard to keep us safe.

I welcome the Minister’s announcement. We will support the taskforce and its work to defend democracy against a wide range of threats. I welcome the work on physical threats. We remember with great sadness our lost friends Jo Cox and David Amess. Can the Minister clarify that the taskforce will work on how to protect all our democratic institutions against foreign interference? Will it look at cyber-security and, in particular, the way the Government have been operating? While I welcome the seriousness of the statement and the seriousness with which the Minister has delivered it, he will know that it is a far cry from the way successive Cabinet Ministers have responded, and from the lack of seriousness and the carelessness and complacency that we have seen on some of these cyber-security issues.

Conservative Ministers were all warned in guidance after the 2019 election:

“You should not use your personal devices, email and communications applications for Government business at any classification”.

Yet many of them at the highest level ignored it. If we take the last Prime Minister but one, who left office just a few months ago, the right hon. Member for Uxbridge and South Ruislip (Boris Johnson) took a trip without officials at the height of the Skripal crisis to a villa in Italy described by locals as the “Russian mountain” where he met ex-KGB agent Alexander Lebedev. He did not declare it to Foreign Office officials on his return and says he does not remember what was discussed. He had a guest with him, but he travelled home alone and has never said who the guest was. He reportedly took his phone with the same number that he still did not change even when he became Prime Minister and sent private messages on it. If this is a new era of defending democracy and security, can the Minister tell us whether the former Prime Minister took his personal phone with him on his Italy party weekend? Who was his guest and what action is now being taken to prevent that kind of thing ever happening again?

Can the Minister tell us, too, whether that Prime Minister’s successor, the next Foreign Secretary and Prime Minister, the right hon. Member for South West Norfolk (Elizabeth Truss) used her private phone for Government business, including contacting other international leaders? If she did, what is being done to prevent that ever happening again?

There are now questions about the current Prime Minister: he reappointed to the Cabinet as the Minister without Portfolio the right hon. Member for South Staffordshire (Sir Gavin Williamson), who was sacked after a leak investigation over Huawei; and he reappointed the Home Secretary, the right hon. and learned Member for Fareham (Suella Braverman), just six days after she was sacked over a security lapse and who yesterday admitted she had used her personal email not just once but six times in the space of 43 days, all apparently because she could not make her Government IT work properly or did not have it with her. That is not adequate. And we still do not have any answer to the serious allegations about potential leaks when the Home Secretary was Attorney General, which include a briefing to The Daily Telegraph in January about an injunction that the Attorney General was seeking against the BBC in a security service case, which was then used in court to argue against the injunction. Again, if this is a new era, can the Security Minister give us a categoric response as to whether the Home Secretary when she was Attorney General—or her adviser—was involved in that leak?

The Minister will know, too, that there have been briefings and stories around with national security implications. Does he agree how incredibly unhelpful it is to our security services to have national security issues briefed in a way that appears to be about putting party interest before the national interest, and that it does not serve democracy if all these issues are not taken seriously by the person most in charge of defending our national security—the Prime Minister, followed by the Home Secretary he appoints?

Yes, we will support the Minister’s taskforce, but he will need to show us that there is some kind of grip at the heart of this Government on attitudes towards security. When we have one Prime Minister who puts security at risk to go to Italy for a party, another who allegedly used a personal phone for contacting Government Ministers, and a third who is defending his predecessors and reappointing as Home Secretary someone described on the Government’s own Back Benches as “leaky”, that undermines our national security. Our national security is too important for this kind of chaos, so what will the Minister do to ensure that the Government get a grip?

[Tom Tugendhat]

I thank the shadow Home Secretary for her very kind comments on joining the taskforce and assisting with it, because this is clearly not just a matter for the Government. As she correctly set forward, all of us in this House have responsibilities and the potential to be influenced in different ways. That is why so much of the legislation going through, on which the hon. Member for Halifax (Holly Lynch) is being incredibly co-operative, such as the foreign influence registration scheme legislation, will help us to address many of those challenges. The right hon. Lady will also be aware that the National Security Bill, of which the Opposition have been so supportive in so many areas, will be important in enabling us to challenge some of these different issues.

The right hon. Lady is absolutely right to highlight the fact that we all have such responsibility. Sadly, this is not just a UK matter. Sadly, it is not even a single Government or a single party matter. The reality is that we have seen the intrusion or attempted intrusion into different aspects of all our communications at different points over many, many years. This issue has grown in importance.

I am not going to comment on individual cases, because as the right hon. Lady rightly said, that would be absolutely unhelpful. It would be completely wrong of me to use, for any private party advantage, comments on anything that the agencies have told me in private. She herself has been extremely gracious in accepting briefings on Privy Council terms, and she has, completely correctly, guarded the privacy of them. I know that she has responded to those in exactly the appropriate way, so I place on record my enormous thanks to her for her extreme co-operation in what is fundamentally a matter of national security.

I will bring forward further proposals on the taskforce and would welcome the right hon. Lady’s thoughts, because there is an awful lot that we must do together. Sadly, the next few years are likely to be more challenging than the last. The indications are not great, as she knows. We need to work together. This is not about one party or one Government; it is about defending the British people’s right to choose their future democratically and freely, without the influence of foreign states.

[Madam Deputy Speaker (Dame Eleanor Laing)]

I call the Chair of the Intelligence and Security Committee, Dr Julian Lewis.

[Dr Julian Lewis (New Forest East) (Con)]

May I start by apologising to you, Madam Deputy Speaker, and to the House for the fact that I will not be able to stay for the remainder of the statement, as I would normally wish to do?

I congratulate my right hon. Friend again on his new responsibilities. I remind him that, in 2013, extensive new legislation gave considerably greater powers to the intelligence and security agencies. In return for that, an understanding was reached—and there was a memorandum of understanding—between the Prime Minister and the Intelligence and Security Committee that we would have oversight of the various agencies that had improved and increased powers; and that, as the situation changes, we would continue to have oversight of new organisations of the sort that he is announcing today. Will he confirm that the elements of the taskforce’s activities that involve, for scrutiny, access to classified information will fall under the purview of the Intelligence and Security Committee; and that he will break the bad practice that was brought in by the last but one Prime Minister of farming such matters out to ordinary parliamentary Select Committees, which, with the best will in the world, cannot conduct the scrutiny properly because they lack the secure facilities and suitably cleared staff?

[Tom Tugendhat]

I thank the Chair of the Intelligence and Security Committee, who knows well the importance that I place on Committees. I merely challenge him on one small aspect: there is no such thing as an ordinary Committee in this House. All of them are select and are selected by the House for the purposes that they have been asked to investigate. I make absolutely clear my commitment to work with his Committee and the Committees of others, as relevant, to ensure that the necessary democratic oversight of Government is complete.

[Madam Deputy Speaker]

I call the SNP spokesman, Stuart C. McDonald.

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[Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)]

I thank the Minister for his statement. Like him and the shadow Home Secretary, the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper), I pay tribute to all those working so hard to protect us.

We all wish the Minister well in his work to strengthen national security and we will work constructively with him to that end. In principle, a taskforce is welcome; the devil will be in the detail and the proof in the pudding. For example, will he tell us more about the timescale and how its membership will be appointed, and will he say more about the participation of devolved Governments in it?

Although we acknowledge that the Minister takes national security incredibly seriously, he will appreciate that lots of questions are still outstanding about his colleagues. As we heard, the former Prime Minister and Foreign Secretary had her phone hacked, apparently revealing highly sensitive discussions and information. Her predecessor had his phone number freely available online for 15 years, and had a meeting with a former KGB agent without officials. A Home Secretary has resigned in recent days over her use of personal phones and emails for official business, only to be reappointed within days. Recent High Court papers suggested that “government by WhatsApp” was the norm. A taskforce is all well and good, but those questions must be answered.

I appreciate that the Minister cannot say much at the Dispatch Box about the hacking of the former Prime Minister’s phone, but can he reassure us that steps are being taken to ensure that nothing similar happens again? Does he agree that there should be some form of inquiry into that incident and will he commit to full co-operation with that? Will he say whether government by WhatsApp is still considered appropriate? Will he confirm the status of the documents that the Home Secretary sent to her private email?

Finally, what steps is the Minister taking to reassure our international partners? We know that they take a dim view of the security mess at the heart of the Government. Frankly, how can we expect them to share anything with us when too many of his colleagues appear to be playing fast and loose with what they are told?

[Tom Tugendhat]

I thank the Scottish National party spokesman for his co-operative tone in regard to how we will work together on this issue. I will set out details and be in touch with the devolved Governments and Administrations to make sure that their views are fully taken into account and that the important different needs of different devolved areas are respected and play fully into the taskforce.

It is essential that we recognise that, sadly, this is not simply a matter for the United Kingdom. The reality is that the points that the hon. Gentleman made also apply to friends and partners around the world. We have seen very significant reports of intrusion and intervention into electronic communications in other countries. Sadly, that includes France, where President Macron set out his issues with Russian hostile activity at the time of the general election only a few years ago; and there are other such reports in other jurisdictions.

We are working together with friends and partners on this issue, because the reality is that the defence of democracy does not stop at the United Kingdom coast but continues in depth when we work with partners and allies. We will only be safe when we support others to guarantee their freedoms so that ours are even more secure.

[Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)]

First and foremost, there is no question that in the Government and even in Parliament we have become incredibly sloppy about any idea of security. The carrying of telephones—just switched off—into meetings is a security risk, because they can be switched back on and used as microphones. We know that. I have seen Government Ministers carrying telephones into meetings in their back pocket. That should be stopped. All those phones should be taken off them. We can do many things, and GCHQ is very clear about the penetration of our enemies into our space.

My main point is that in all of this—the Minister is reviewing the integrated review—why in heaven’s name was China not seen as a threat when we did the original review? This is about everything it does, such as the trashing of Hong Kong, the Uyghurs, taking over the South China seas and the attacks on people like me and others, including the Minister, as sanctionees. Will he make sure, first of all, that we lift China back into that bracket as a threat, treat them as a threat and do not excuse it? For those of us who are sanctioned, it would be marvellous if the Foreign Office or even Parliament were capable of giving us any advice about what happens to our families when they have to travel. I find it remarkable that when we ask them that question, we have no idea of what limitations that poses on us, even today.

[Tom Tugendhat]

I thank my right hon. Friend for his comments. He is absolutely right to cite the fact that China has become a long-term strategic threat. I am afraid that I cannot answer on why it was not raised before; I have only just joined the Government, as he knows.

The question of security is so important for all of us. The National Cyber Security Centre and Parliament’s security office have been extremely open in helping any Member, Minister, shadow Minister, official or staffer who seeks advice on that matter. I pay enormous tribute to the security officer for her work and the way in which she has assisted many of us at different points to realise the threats that are against us and how to best protect ourselves.

Let me make this commitment absolutely clear: there is no defence of democracy without defending every Member of the House. Whichever party we are from and whichever cause we champion, we are here because free people chose us to be here. It is our responsibility to make sure that that freedom endures in the work and in the voices that we hold.

[Andrew Gwynne (Denton and Reddish) (Lab)]

I again welcome the right hon. Gentleman to his post and the commitment that he is showing to try to get together a cross-party approach to his taskforce. National security is absolutely crucial. It is the job not just of the Government, but of each and every one of us in this House—in the Opposition and on the Government Benches—to take that seriously. Will the Minister bring updates on the work of the taskforce to the House so that we can scrutinise its work? Also, what level of information will Members be provided with given the sensitivity of some of the subjects that he will look at?

[Tom Tugendhat]

I thank the hon. Gentleman for his entirely correct assessment that this is not just about the Government. Actually, it is not just about this House, but about many of the businesses that support us in various ways and many of the businesses that we are privileged to represent in the communities that we are lucky enough to serve. I absolutely agree that this is a matter for all of us.

I also pay tribute to the hon. Gentleman for the tone in which he has approached the issue, because the reality is that I will have to bring—in fact, will willingly bring—reports back to the House, but some of them may be caveated. They may not include some details that Members would quite understandably ask for, but which may not be appropriate for wider reading, for reasons that the hon. Gentleman understands and has already expressed. I assure him that I will ensure that this House is able, in the appropriate way, to scrutinise the work that I conduct on behalf of our people and our country.

[John Redwood (Wokingham) (Con)]

What urgent action will the Government take so that we grow more of our own food, produce more of our own oil and gas, and refill our depleted reservoirs? Having more domestic supply of the basics is now fundamental to national security, given the obvious threats from Russia and others.

[Tom Tugendhat]

I will not comment on the details of the taskforce, but I think I can safely say that that is a little beyond even what I was hoping for. I will not go into details, except to say that my right hon. Friend is absolutely right: the reality is that supply chains in our country and around the world have changed as covid has influenced different issues, and sadly the nature of the decoupling that some states have sought to pursue has changed the way in which we must consider our own security.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

One area of Government policy that I suggest would benefit from the fresh eyes of the Minister is the need for a whistleblower defence under the National Security Bill. The Minister may be aware that an amendment will be moved on Report; it might facilitate the Bill’s passage if he met me and other hon. Members behind the amendment before then.

[Tom Tugendhat]

The right hon. Gentleman makes his point extremely clearly. He knows that the new Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake), is responsible for the Bill alongside me and has his own views on the subject. No doubt my hon. Friend will be extremely willing to meet the right hon. Gentleman. If not, I shall.

[Vicky Ford (Chelmsford) (Con)]

I welcome my right hon. Friend to his place; he is a great champion of freedom and his taskforce is an excellent idea. To protect our democracy, it is vital that we protect those who work in our democratic institutions, especially all Members of this House, from misinformation, cyber-attacks and online attacks. It is also vital that we continue to work with other countries, because it is only by working together that we can champion democracy and let democracy prevail. Does my right hon. Friend agree?

[Tom Tugendhat]

I pay enormous tribute to my right hon. Friend, whose work in the Foreign, Commonwealth and Development Office was incredibly important in championing democracy and freedom around the world. Indeed, some of her work that was not always celebrated was in championing journalism. One thing we should recognise fully is that democracy does not work without a free press: I know that I am going to regret these words, but what they write and how they write it are as much a part of our democratic institutions as the words that we use in this Chamber. Making sure that our press is free and without influence is as important to democracy as making sure that we are, too.

[Dan Jarvis (Barnsley Central) (Lab)]

I warmly welcome the Minister to his important new role. He and I have spent many years safeguarding the security of information; these are matters that I know he takes very seriously, and I wish him well in the role.

Because I know the Minister takes these matters so seriously, I want to return briefly to the shadow Home Secretary’s point about the importance of doing the right thing and the importance of personal conduct. In addition to the measures that the Minister has outlined to the House today, there is an absolute requirement for a vigilant mindset among all Members of this House, but most critically among Ministers, who need to show leadership in the area. Does he agree that when it comes to matters of national security, everyone—everyone—must adhere to the protective regime or be deprived of access and removed from their position if necessary? Those are the rules, and everyone should follow them at all times.

[Tom Tugendhat]

May I take a moment to pay enormous tribute to my friend? We met in Helmand about 16 years ago, when he was commanding a unit that I was sent to check up on. Well, he is checking up on me now—and he is quite right to hold me to account for my words, as I was sent to hold him to account for his actions back then. He is absolutely right. I know that his bedtime reading is the US army field manual: the first words are “Every day, do one thing to improve your defensive position.”

[Aaron Bell (Newcastle-under-Lyme) (Con)]

I welcome my right hon. Friend to his place. It was a pleasure to serve with him on the National Security Bill Committee. I also welcome the taskforce that he has set out.

Last week, a number of us went with the armed forces parliamentary scheme to Shrivenham, where we not only heard from some of the leading experts in cyber in our armed forces, but saw the new Defence Cyber Academy, which was announced only a few weeks ago by the Defence Secretary. Will the Minister work with our armed forces on cyber to protect British companies and our institutions from Russian and Chinese cyber-attacks that put our national security at risk?

--- Later in debate ---

[Tom Tugendhat]

I thank my hon. Friend for his kind words and for his work on the Bill Committee; he has been an absolute stalwart on the issue and has been a very dear friend for a lot longer. I also pay tribute to the armed forces parliamentary scheme and its work to make Members of this House aware of the various ways in which the armed forces play such a vital role in our national life. My hon. Friend’s comments on cyber awareness are absolutely correct, and I agree with every word.

[Gavin Robinson (Belfast East) (DUP)]

As the Democratic Unionist party spokesman for home affairs, may I express my personal delight at seeing the Minister in his place? I hope that when he is constructing this welcome taskforce, he will recognise that our recent history and our contemporary position in Northern Ireland mean that we have a contribution to make.

The Minister and I were elected at the same time. Since then, we have had the strategic defence and security review, the modernising defence programme, the national security capability review and the integrated review, which formed part of his statement. There are two common threads in those four exercises: the threats get bigger, but the budget remains the same. Does he have an assurance at this stage that if the taskforce brings forward a new programme of work to address emerging threats, it will have the associated budget to tackle them?

[Tom Tugendhat]

I thank the hon. Gentleman for his kind words. As he will know, not only is the voice of Ulster heard very clearly in the integrated review, but it actually holds the pen. It is a pleasure to commit to working with him and others across the United Kingdom to make sure that voices are heard. On resources, we are in the early stages: at the moment we are setting out how we can work together better, but there is an awful lot still to do.

[Dr Ben Spencer (Runnymede and Weybridge) (Con)]

I thank my right hon. Friend for his statement and warmly welcome him to his place.

In the same way that the UK took a leading role in international collaboration against the Russian invasion of Ukraine, is it taking a leading role in international collaboration against cyber-attacks by hostile actors?

[Tom Tugendhat]

My hon. Friend is quite right to talk about international co-operation, because this is not something that we can do alone. Our partners around the world are absolutely integral to our defence. Through agencies such as GCHQ and wider work through the National Cyber Security Centre, the United Kingdom has regularly been leading different forms of engagement and different ways of co-operation. My hon. Friend has my absolute commitment that that will continue and grow, because the way we extend the UK’s influence and defend ourselves is by making sure that our friends and allies are safe, too.

[Derek Twigg (Halton) (Lab)]

I welcome the Minister to his post and welcome the taskforce. While I have no reason to doubt his integrity or commitment to security, I am a little disappointed that although the shadow Home Secretary and my hon. Friend the Member for Barnsley Central (Dan Jarvis) both raised the issue of the Government’s integrity with respect to security, he has not addressed it. I thought he might have taken that opportunity, given the situation with Ministers’ email use and the security issues surrounding it. We know that mobile phones and other phones are being used, we have seen the former Prime Minister going off to meet an ex-KGB agent, and there is an issue about Russian money in the Conservative party. I thought that the Minister would address the question of how we can have confidence that he and the Government will put things right to ensure that they take security within the Government seriously.

The question that I want to ask the Minister is very simple. Given that the focus has rightly been on Russia and China, on what is happening in Ukraine—obviously—and on energy security, may I suggest that it is important for us not to lose sight of the fact that we need to keep on top of the issue of how we combat terrorism? It seems to have been left on the back burner recently, but we need to know and feel more comfortable about what the Government intend to do to protect the country from terrorism.

[Tom Tugendhat]

I thank the hon. Gentleman for what he has said. He is absolutely right. There is, sadly, no let-up in the concern about terrorism, and we know that the fact that we do not hear of incidents does not mean they were not prevented by our fantastic agencies in various different ways. The experience that I think must be the most sobering I have had for a long time was walking into my present role and hearing an update on the threats that we face every day, and the different ways in which our fantastic agencies and the officers who serve them have been conducting themselves in order to protect us. They are absolutely the best of us, and we are blessed and honoured to have them working for us and serving our state.

As for the hon. Gentleman’s other points, he will forgive me if I do not go into details. He knows why that is. As the shadow Home Secretary correctly said, it would be inappropriate to discuss operational matters for party advantage.

[Simon Fell (Barrow and Furness) (Con)]

As the chair of the all-party parliamentary group on cyber security, I welcome my right hon. Friend’s statement. I am sure he is well aware of the importance of disinformation and misinformation and the harm that it is causing to our country at the moment, whether by undermining our democracy or by spreading conspiracy theories. But if he is in any doubt about that, I recommend to him the BBC series “Death by Conspiracy?”, which shows how our constituents are being hurt, and even dying, as a result of the sharing of disinformation by, often, foreign actors.

With that in mind, will my right hon. Friend agree, within the taskforce, to look at the role of legal but harmful content and keep it under review? Will he also ensure that we look at the Computer Misuse Act 1990 and its possible reform? Some of the people who are working hard daily to keep us and our businesses safe are currently under threat of legal action just through doing their jobs.

[Tom Tugendhat]

I thank my hon. Friend for his work on the all-party parliamentary group. He is to right to highlight the threat of disinformation and, indeed, the way in which cyber is being used against us. I am not entirely sure whether it was flattery or mere coincidence that as soon as I took this job, the BBC ran a series of programmes called “The Capture” in which the Security Minister—rather better-looking than me—had managed to annoy a certain hostile power of which we have been speaking this afternoon, and was subject to a number of cyber-attacks. I very much hope it was coincidence, not prediction.

[Mr Kevan Jones (North Durham) (Lab)]

As a member of the Intelligence and Security Committee, I welcome the announcement of the Minister’s taskforce. Some of the issues he has raised were highlighted in our Russia report of 2020. I heard his commitment to the Chair of the ISC to work with him closely, but may I just say to him that, like the rest of us, he is—to use a Robin Day phrase—a here today, gone tomorrow politician? We need this taskforce’s scrutiny to be embedded in the memorandum of understanding between the Committee and the Government, because otherwise—this point was raised by my hon. Friend the Member for Denton and Reddish (Andrew Gwynne)—it will be impossible for much of the taskforce’s work to be scrutinised in this place.

[Tom Tugendhat]

The right hon. Gentleman is right to suggest that institutions and structures are what guard us against the “here today, gone tomorrow” whims of politicians, and that setting up such structures is the way we keep ourselves safe. Indeed, the best of our institutions have endured for hundreds of years in order to guarantee those freedoms. The right hon. Gentleman can be absolutely assured that I will be looking at ways in which we can embed such structures to ensure that we keep ourselves safe.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

I congratulate the Minister and welcome him to his new role. May I ask him to answer a serious and simple question? He has made great play of cyber-security and the need for us to be technologically aware of threats. If he was made aware that a civil servant or Government employee had been sacked for sharing Government documents in personal email accounts or devices, would he sanction that person’s re-employment, even if they had apologised?

[Tom Tugendhat]

One of the reasons I have always enjoyed debating with the hon. Member is the fact that he finds new ways of asking old questions. I was delighted to hear the question, but I am afraid I am going to return to my old answer, which is that I will not comment on ongoing cases.

[Hilary Benn (Leeds Central) (Lab)]

When it was reported in the press that the former Foreign Secretary’s phone had been hacked, the former head of MI6 said that Ministers needed to be properly educated about the use of their telephones. If we are absolutely honest—and the point has been made already today—all of us need to be properly educated about not just the use of our phones, but the use of our emails. Does the Minister agree that perhaps it is now time for us to move to a more proactive approach with Members, to ensure not only that we have the excellent advice that is available but that people are looking to make sure that we are following that advice? If the House authorities decide to go down that road, will he ensure that people with all the expertise available to him will be able to attend to give us practical advice about everything we ought to be doing to keep our part in our democracy safe?

[Tom Tugendhat]

The right hon. Gentleman has made an extremely valid point. I can assure him that any requests from parliamentary security and the excellent lead that we have in the person who currently holds the role will be looked at with extreme willingness. Any request to defend our democracy by those of us who have been privileged to be elected to this House, or indeed those who have been privileged to be elected to others, will be taken extremely seriously. The same, by the way, applies to academic freedom and to many other institutions. They are absolutely fundamental to the liberties of our country.

[Andy Slaughter (Hammersmith) (Lab)]

In her resignation letter, the Home Secretary said:

“As soon as I realised my mistake, I rapidly reported this on official channels, and informed the Cabinet Secretary.”

Nothing in that statement is correct, according to the Home Secretary’s own account when she wrote to the Chair of the Home Affairs Committee yesterday. She waited several hours, she was confronted rather than volunteering information, and she finally reported her breach of security not to the Cabinet Secretary but to her special adviser. If we are being charitable, there is a conflict between the Home Secretary’s versions of events, and surely that merits an independent investigation if we are to have confidence in the person who is primarily responsible for our national security.

[Tom Tugendhat]

The hon. Gentleman has made his points, and the Home Secretary answered yesterday.

[Clive Efford (Eltham) (Lab)]

But the Minister is aware that there are questions about whether the Home Secretary has full security clearance. Can he give the House an assurance that she has that clearance and, if not, what are the implications for national security?

[Tom Tugendhat]

All members of the King’s Privy Council have access to the information that is necessary to conduct their tasks.

[Madam Deputy Speaker (Dame Eleanor Laing)]

And now, in his traditional place, Jim Shannon.

[Jim Shannon (Strangford) (DUP)]

Thank you, Madam Deputy Speaker. A taskforce for all the United Kingdom of Great Britain and Northern Ireland has to be excellent news, and I welcome it.

The Northern Ireland protocol is stirring up tensions in Northern Ireland. What steps will the Minister and the Government take to deal with the people who chant in support of the IRA—the same IRA, the same fifth columnists, who want to destroy our United Kingdom of Great Britain and Northern Ireland, and who carried out the indiscriminate murder campaign of pure evil with which they devastated Northern Ireland during the troubles—and what steps have been taken to ensure support for the Police Service of Northern Ireland at all times to combat the very real threat of terrorism from republicans or, indeed, from any mindset in Northern Ireland?

[Tom Tugendhat]

I thank the hon. Gentleman for his second question today; I hope I will be privileged to take many more. He can be assured that all security policy will include the whole of the United Kingdom, and that I will be absolutely committed to working with the PSNI and numerous other police forces.

[Madam Deputy Speaker (Dame Eleanor Laing)]

Just before I conclude the proceedings on the statement, let me say, as Chairman of the Consultative Panel on Parliamentary Security, that I wish to add my thanks to the Minister for what he has said today, and for the work to which he has dedicated himself so enthusiastically.

Economic Crime and Corporate Transparency Bill (Third sitting)

Tom Tugendhat Excerpts

Committee stage
Thursday 27th October 2022 Public Bill Committees

[The Chair]

I thank Members and those giving evidence for their flexibility in moving rooms, and I inform Members and those giving evidence that we will be in this room all day today. Could the witnesses please introduce themselves for the record?

Helena Wood: Hello, my name is Helena Wood. I am a senior research fellow at the Royal United Services Institute, where I lead the economic crime programme.

Duncan Hames: Hello, I am Duncan Hames. I am the director of policy at Transparency International UK.

[The Minister for Security (Tom Tugendhat)]

Forgive me, Ms Wood; my hearing is not very good. Can you speak straight into a microphone?

Helena Wood: Yes.

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

Q 170 Thank you very much for coming to give evidence today. I wanted to start by asking about the Bill’s reforms of information-sharing provisions—perhaps this is particularly to Ms Wood. In your view, do those provisions go far enough, and if not, do you have examples of where it is done better internationally? If information-sharing provisions are not improved, how much of a hindrance could it be to the effectiveness of the Bill?

Helena Wood: To place it in context, one of Britain’s great financial crime exports of recent years has been our joint money laundering information taskforce, which is one of the first public-private partnerships. That model has been replicated across the globe, with public-private partnerships now seen as a norm by the FATF, the international standard setter on tackling money laundering and terrorist financing. In one respect, we really have been a global leader in that regard. However, as with many British exports, we are now exporting that abroad and it is being copied and replicated at a speed and scale beyond what the UK is doing. Increasingly, we are seeing people moving from peer-to-peer information sharing towards a more collaborative data analytics model. I point to the models being set up in Holland and in Singapore as particularly groundbreaking in that regard.

Coming back to the provisions in the Bill, do they get us from where we are now on peer-to-peer information sharing, which is one thing, towards this world of collaborative data analytics, which we need to get to to really home in on financial crime? No, they do not. Although the provisions in the Bill will go some way towards increasing private-to-private information sharing and, in particular, the risk appetite in the banking sector, they really do not keep pace with the global standard.

What we would like in the next economic crime plan, which we hope to see this side of Christmas, is something that is much more ambitious. In many ways, I would say that while it is welcome, the Bill is a slight missed opportunity with regard to information sharing, given that it really does not push forward to this big data analytics model that others are moving towards.

--- Later in debate ---

[Dame Margaret Hodge (Barking) (Lab)]

Q I hope the Committee will look at our amendments on information sharing, the funding of enforcement agencies, shareholder information, Companies House checks and AML supervision; we tabled them in a spirit of improving the situation. I agree with all that.

I am going to ask about another issue, just to get it on the table. People engaged in the debate over dirty money are very anxious that we should move from just freezing the assets, particularly of the Russian Government and Russian oligarchs, to seizing the money so that we can use it—particularly for the reconstruction of Ukraine, when that war comes to an end. Can I have your views on that, starting with you, Duncan?

One final thing: a big thank you to both of you for the work your organisations do in exposing a lot of the problems and for the very positive attitude you have taken to establish solutions. Thank you to both of you, individually and to your organisations.

[Tom Tugendhat]

Hear, hear!

Duncan Hames: Thank you. I think it is important that we should continue to respect the rule of law and have a judicial basis for asset recovery. Too often, it is tempting to have a more administrative approach, and with that comes risks. It is very important that, as well as having the clarity of purpose to designate a whole substantial raft of individuals and entities for Russia sanctions, we have the determination to make those sanctions work.

We published some research just last month that found hundreds of millions of pounds’ worth of UK real estate that we were fairly sure was owned and controlled by individual entities that have been named under Russia sanctions. However, if you check on the Land Registry, there are not any of the typical markers to say that you cannot sell or transfer or trade this property. That is partly because of some of the very clever and complicated arrangements for their ownership, including using trusts.

In the work you are doing on the Bill, there is an opportunity to ensure that really important measures for global security, such as our Russian sanctions, actually work, bite and make it impossible for those who have moved large amounts of wealth out of Russia to continue to control it in the interests of their political sponsors.

Helena Wood: I could not agree more that we need to start moving from freeze to seize, but I echo Duncan’s sentiments that we must do so in a way that protects the very things we are trying to protect and do: the rule of law, due process and democracy. We should not push towards measures that effectively put in place a ministerial decree for confiscating individual assets and run roughshod over A1P1 principles.

That said, there is further we could go in UK legislation. Even with the advent of the much vaunted unexplained wealth order, our law enforcement agencies remain on the back foot. There is more we can do within the confines of European rights compliance-tested laws of reverse burden mechanisms to put law enforcement on the front foot.

Fundamentally, though, it is not going to be an easy fight to link those assets back to the criminality from which they once derived, given the difficulties of gaining evidence across borders. However, there are models we could replicate that have been tested for ECHR compliance, such as in Italy and Switzerland—I could name others. If the Committee will forgive me for trailing some forthcoming RUSI work, a paper is coming in November or December this year that sets out some recommendations of where part 5 of the Proceeds of Crime Act 2002 could replicate some of the principles of other regimes and push forward to at least put law enforcement on the front foot.

The other issue I would point to, which has already been partly legislated for, is cost protection for our law enforcement agencies. We have legislated for cost capping in cases involving UWOs, but they are not the right tool to use in all cases; I particularly point to the oligarchs, who do not fit under the definition of PEPs in UWO legislation. There is an argument for the Bill to potentially push for full cost capping of part 5 cases to increase the risk appetite of our law enforcement agencies to take those cases on in the first place.

[James Daly (Bury North) (Con)]

Q I want to go back to information sharing. My understanding of the Bill—please tell me if I am wrong—is that the clauses will allow

“direct sharing between two businesses in the AML regulated sector”

and

“indirect sharing through a third-party intermediary for businesses in the financial sector”.

That is what the Bill does. Putting it bluntly, what is wrong with that? What is the criticism of those aims and the things it allows businesses to do?

Helena Wood: Civil liability for confidentiality is one barrier. It is an important one, and removing it will hugely increase appetite, but it is not the only barrier. The boundaries within our data protection legislation are not explicitly clear; they are open to interpretation. We need more guidance, potentially from the Information Commissioner, to make clear what those boundaries are. We potentially need further clarification in the data protection legislation that is currently going through—

--- Later in debate ---

[The Chair]

For the final question I come to Tom Tugendhat.

[Tom Tugendhat]

Q Clearly, Liam’s point is entirely valid, but it is worth pointing out that that was a scandal in Estonia, which was very strongly dealt with by the Estonian Government. It is important to recognise that it is not just a UK issue. That being said, the Bill does open up an awful lot of information. Mr Hames, can you tell me how your organisation is going to use that information to start to address some of those issues?

Duncan Hames: Yes, happily. We are quite a small organisation, but this is about the power of putting information in the public domain. The report that we were describing earlier is a form of network analysis; that is the sort of thing you can do if open data is published, rather than information in PDFs, which are essentially photographs of old documents.

Whether it is organisations like ours, or investigative reporters such as the Organized Crime and Corruption Reporting Project, civil society has shown its potential to help uncover those crimes if there is information in the public domain. If we want a spirit of partnership, and if Government want the private sector to be its first line of defence, then it is really important that everyone is equipped with the tools that they need and that the company register is providing accurate information, which has been checked, that they can rely on.

[Tom Tugendhat]

Q Your point that this is a partnership is entirely correct. The Government have approached the issue in the way that we spoke about, you will remember, when I was doing a different job, as Chair of a different Committee. We spoke about the fact that the UK is a hub for so much of that crime for very obvious historical reasons, such as the depth of our capital markets, the use of the English language, the openness of our financial system and the importance of the rule of law. It is not simply a legal question—it is a cultural and a deep historic one as well.

Do you agree that those reforms begin that process and that fightback? Do they make a difference by scrubbing, as it were, the inside of the whitened sepulchre to ensure that we are exposing it to sunlight, so that organisations such as yours, the media, and many others around the world, will be able to identify where that money is going and from where it has come? This is also about jurisdictions overseas who are losing money through our system, not just about us who have to control it.

Duncan Hames: Yes, I agree. The Bill is beginning that. The challenge that we have is that it is six years ago that we last made reforms to Companies House, and I do not know when you are next going to get a chance to make further progress.

[Tom Tugendhat]

I have only just come into post.

Duncan Hames: It is hard, as we are often told, for legislative time to be found. So please make the most of the opportunity and take it as far as you can. It was only this summer that the US Treasury issued a money laundering alert about evasion of Russia sanctions. In that, they identified UK limited liability partnerships as part of the typology of the financial logistics for evading sanctions.

[Tom Tugendhat]

Q You will forgive me for recognising that there may be other jurisdictions closer to their home that are also involved in that.

Duncan Hames: But this is the jurisdiction that Members of our Parliament are responsible for.

[Tom Tugendhat]

Q We must get this right, but it is an international problem that we must all get right.

Helena Wood: May I come in on that particular point around Companies House reform? The point has been made by others giving evidence here this week and I will make it again until it sticks. Companies House reforms mean nothing if we do not resource Companies House properly. Using that secondary legislation to raise formation fees to £50, at least, is absolutely essential—

[Tom Tugendhat]

That is absolutely true, which is why the partnership that we have to put in place alongside agencies, NGOs and journalism, to make sure the application programming interfaces are open is so important.

[The Chair]

Order. I am afraid that brings us to the end of the time allotted for the Committee to ask questions.

I very much thank our witnesses, Helena Wood and Duncan Hames, for their time, and I thank Members for their questions. We now move on to the next session.

Examination of Witnesses

Chris Taggart and Elspeth Berry gave evidence.

--- Later in debate ---

[Seema Malhotra]

Q I have a couple of specific questions. First, do you think there should be any sort of limit on the number of companies or partnerships registered at one address? Secondly, should there be any sort of limit—perhaps one beyond which there needs to be an application to increase, under specific criteria— on the number of directorships that any one director can hold?

Chris Taggart: On the latter question first, I have been a director for some 20 years. The first time, someone sat me down and said, “This is what’s involved in being a director.” You think, “Wow, that’s kind of scary.” You have a fiduciary duty and you have to understand the company. If you are a director of 200 companies, I fail to see how you can perform that fiduciary duty, or those companies are, in some ways, just legal entities for some conduits for something. They are not actually in business; they are just conduits. I struggle when someone is a director of 200 companies: either those are just legal entities for some purpose other than as a normal company or they are not doing their job. It seems to me obvious that there is a challenge there. Whether that is a limit or whether that is actually holding directors much more personally liable for the wrongdoing of the companies, I do not know, but I think that there is something. There seems to be a contradiction there, fundamentally.

Elspeth Berry: I agree. I would have supported a cap on the number of directorships for exactly those reasons, in that I do not think a director can fulfil their duties if they have a lot of companies. However, if you are not going to have that, that certainly has to be a red flag for Companies House. It has to be a thing they will investigate and that they have the resources to investigate, which comes back to the problems that we identified earlier.

On the addresses, if you have a company service provider giving their address, it is quite possible you will have multiples and that might be okay if that is their business, they are doing it properly, they are AML regulated and all the rest of it. The problem is that we have seen in recent years that they are not. Again, that ought to be a red flag. In the limited partnership proposals, where you are trying to establish some real connection, economic or otherwise, with a particular jurisdiction within the UK or, at least, with the UK, that is one of the problems. One of the options on the list—they are all problematic—I personally thought that the principal place of business might be quite a good one, showing an actual connection, but I have been corrected in my beliefs by my journalist colleagues who say that almost all the wrongdoers were able to tick that box. I think it is a problem if you are saying that as long as somebody will pick up the mail here, that is okay. Again, that needs to be a red flag.

[Tom Tugendhat]

Q I am very interested in some of the identification elements that are raised. How much of a difference will the verified identification make to the identification of individuals?

Chris Taggart: There are two issues. I watched some of the previous witnesses and the things that came across were issues to do with identification and resourcing and I back up both of those things. On identification, allowing the corporate service providers to essentially say they have done something seems both a huge vector for misuse and also unnecessary. The technology allows us to look like we are using one company when we are signing up online and so on, but it is all authenticated with another company. They could be using Companies House back ends or banks’ back ends—we could have that authority and those standardised processes—and still you would appear to be transacting with a corporate service provider.

Having corporate service providers doing the identity verification seems like we have walked away from doing it properly. Once you allow corporate service providers to play a significant role, particularly on identity, I think we have a bit of a problem. Assuming that loophole is closed, this is really good, but it is still state of the art two, three or four years ago, and I think we need to start using digital identities. We need to make sure that, with somebody’s identity, they are not saying one thing on this hand and not saying another thing on that hand. Again, the unique identifiers—

[Tom Tugendhat]

Q Mr Taggart, you will be aware that there is wider debate about unique identifiers because it ties in personal privacy aspects in healthcare, insurance and, in fact, every part of your life. Every single country that has introduced them has had a privacy pay-off. That is one that you may or may not be willing to address, but it is not just simply a question of companies.

Chris Taggart: Absolutely, but I think there are technical ways of doing that. It does not have to be one ID that everyone can see—

[The Chair]

Order. I am very sorry. That brings us to the end of the time allotted for the Committee to ask questions. I am very grateful to our witnesses for giving evidence.

Examination of Witness

Graham Barrow gave evidence.

--- Later in debate ---

[James Daly]

Thank you, Graham.

[Tom Tugendhat]

Q Could you give some live examples as to how you would use various aspects of the powers in the Bill to improve your ability to track? Of course, we have spoken on numerous occasions about the partnership that we need. If I may say so, Graham, you are an extremely active tracker of companies, and, I would therefore say, one of the top of the class in the public-private partnership.

Graham Barrow: That is kind. You must understand that I am a private citizen, so I do not have access to huge swathes of information that I would love to be able to get hold of to give a much rounder view of that. Companies House, of course, does, so there are some interesting things that it will have, such as email addresses, IP addresses and credit card details.

There are some important provisos there. Do not allow people to pay for their enrolment through a pre-paid credit card. That would be a bad thing. Do not allow people to apply through a virtual private network—a VPN. That would be a bad thing. Do not allow people to apply through something like Proton Mail or an encrypted mail account. That would be a bad thing. What we need is transparency in all those things so that we can aggregate that data with, for example, data from His Majesty’s Revenue and Customs, voter roll data and other data, to get a much more rounded picture of people who are applying for company directorships.

Now, that only works here in the UK. It is worth bearing in mind that about 150,000 company incorporations every year emanate from outside the UK. That adds further difficulty. There were 50,000 applications from China last year, so that is clearly a problem. Incidentally, those numbers soared after China banned cryptocurrency at the end of September last year. There was an extremely easy to observe uptick in UK corporate registrations from Chinese individuals.

The Bill will start to address such a range of issues. I think it will be the first of many if we are really going to make our corporate environment safe and secure, and start tackling economic crime and the abuse.

[Tom Tugendhat]

Q I am very pleased to hear that. You are challenging me as Security Minister. You speak against cyber-security, which is an enormous element of the defences that we need for other areas of crime. I am sure you would not be recommending to anybody that they should never use VPNs or encrypted emails.

Graham Barrow: No. I am saying that for the purpose of registering a company in the UK, you should not be afforded that benefit.

[Tom Tugendhat]

I understand the distinction. I just wanted to make the point. As you can understand, it would raise other difficulties.

Graham Barrow: Absolutely.

[Tom Tugendhat]

Q I am very grateful for your input. I wonder whether you could say a little bit more on the issue of shell companies and how they are used. You will know very well the work of people like Oliver Bullough, Tom Keatinge and Luke Harding.

Graham Barrow: They are good friends.

[Tom Tugendhat]

They are brilliant. These people are quite literally on the frontline of our democracy, defending our freedom by defending our corporate integrities. Their work is extraordinary important. I would be grateful if you would say a little bit more about shell companies.

Graham Barrow: I count all those people as friends. Oliver and I exchange daily emails. We work very closely together. The last time we met was on a bus.

[Tom Tugendhat]

I should put on the record that he is a friend of mine as well.

[Dame Margaret Hodge]

Of lots of us around the table.

Graham Barrow: Shell companies are containers. Effectively, it is a container for assets. They are used in a whole variety of ways. They are used, clearly, as conduits for corrupt and criminal funds to be moved around the world. They are also used just as a container to access banking and do as I have just described—a one-off hit to get a bank account open and get an overdraft.

I have seen physical evidence of a company being incorporated to an address of somebody in Cardiff who knows nothing about it; on the same day, they open a bank account with one of our high street banks, and on the same day, they remove the automatic £8,000 overdraft that came with that bank account. Then they disappear, and of course it turns out that they were untraceable because none of the details they provided were real. That is a shell company, because that is not doing any normal commercial activity.

The Committee mentioned addresses earlier. I am sure some members of the Committee will know that there are addresses in central London that are home to 100,000 companies. That is clearly a matter of concern, particularly with the proportion of those companies that are registered from some of the more remote parts of the world—places you would struggle to find on a map—that concentrate at those addresses.

We need to be quite clear about the legitimate use of corporate service provider addresses. Some of our banks now provide that as a service. That is fine. There is one firm that offers this thing called a non-resident package, which should immediately make your ears prick up. Somebody from outside the country can register a business and be given the business bank account for a fixed fee. That bothers me hugely, because it makes me ask why.

The thing about shell companies is that they are not always easy to identify at the point of incorporation. We are getting very good at it, but it is still not an exact science. It is about lifetime analysis of a company’s behaviour, as well as some of the red flags that are raised at the point of incorporation.

[Tom Tugendhat]

Q Thank you very much indeed. The amount of data coming out suggests that this legislation may do something to inform people about things such as phoenixing, which you have mentioned. Clearly, there are many aspects to that and I am not going to pretend for a second that the Bill answers every single one—it does not—but it certainly goes some of the way towards ensuring that people can be better informed when they enter into future agreements. How would you say that the information alongside the verification assists you?

Graham Barrow: It probably does not assist me an awful lot, because I do not have access to a lot of the other data that particularly members of JMLIT, and other law enforcement and Government organisations, have access to. As a private citizen, I will not have access to that much more information. That is probably a good thing, because I am already drowning in information. For a man who is going to be 70 next birthday, it is not exactly the retirement that I had planned. In a way, I think the best thing I can do is help to inform and educate others so that as the Bill starts to generate that information, some of which I will not be privy to, I can at least help people to understand better how to analyse and aggregate that information to extract signals.

Ultimately, there will be too much information to do everything with, so it is about how we organise ourselves, particularly at the point of incorporation, so that instead of waiting for a problem and going back to see how it happened, we identify that problem in the process of being set up, and start proactively managing the people who are part of organised crime or corruption and are using or abusing Companies House to do that. We have never done that before, to the best of my knowledge, but we are now in a situation where we can start doing it.

[Dame Margaret Hodge]

Q I want to take you back to the work you did on Deutsche Bank. First, what additional powers did it lead you to think you needed? Secondly, how did the FCA respond—what was lacking or worked well there?

Graham Barrow: Dame Margaret, you ask me a tricky question because I worked at Deutsche Bank, and some of what I know is privileged and I cannot talk about it. In fact, my work in Deutsche Bank is what has led me to be sitting here, because it was while I was there working on the Russian mirror trades that I realised that two completely different firms had filed exactly the same set of accounts—identical accounts—signed by the same person. My rather naive reaction then was, “How on earth did this happen?” I know better now. That person’s name is in the public domain: it is Ali Moulaye. He is a dentist who currently lives in Belgium and has been written about frequently. I kind of discovered him, in a way. He has signed more than 10,000 sets of accounts on Companies House on behalf of at least 2,500 limited liability partnerships, a significant proportion of which have, sadly, been named as being involved in various laundromats.

One issue was that all those accounts were filed on paper and were then scanned in as an image, not as a machine-readable document. That is a really big disadvantage, because it prevents people such as me, or those with access to clever technology, from reading those documents into artificial intelligence engines and performing deeper analysis on them. It is a very difficult problem. It would be a wonderful thing—although I suspect quite labour intensive—to retrospectively digitise all those old PDFs, because there is a huge wealth of intelligence still residing in them that we truly do not understand. That is also very much true of limited partnerships, which still can only file on paper. The only way to incorporate a limited partnership is on a paper application. That makes reading the data on those registration forms extremely difficult, which is why lots of it has remained hidden for so long.

Economic Crime and Corporate Transparency Bill (Fourth sitting)

Tom Tugendhat Excerpts

Thursday 27th October 2022 Public Bill Committees

[The Chair]

I am going to have to curb this and move on very briefly to Tom because we have to finish.

[The Minister for Security (Tom Tugendhat)]

Q This is a very brief question. What difference will this make to the solicitors’ profession as well? You will have noticed that there is not only a control of accountancy but an increase in penalty to solicitors’ regulations.

Angela Foyle: Neither of us is part of the Law Society so we cannot speak for them, but clearly, that was something that was thought to be necessary as a deterrent. Although I expect most of them are likely to be regulated by the Solicitors Regulation Authority for money laundering, rather than the Law Society. However, it must have been a gap that was thought to be necessary to fill. I really do not know, otherwise; I am speculating.

[The Chair]

Thank you very much. That brings us to the end of the time allotted for the Committee to ask questions. I thank our witnesses on behalf of the Committee for their evidence.

--- Later in debate ---

[Liam Byrne]

Q I want to pursue that point for a moment. In the interests of good governance, would it not make sense to strengthen some of the obligations on directors to include, for example, a duty to take steps to prevent corruption in their organisations? We have similar measures on corruption; we do not have similar measures on economic crime and fraud.

Peter Swabey: You have the directors’ duties under section 171 of the Companies Act and so on. Those are there, but it is difficult to identify exactly how those directors’ duties can be pursued against any defaulting director. For me, that is one of the challenges. Were you to introduce something extra on that, that would be a solution, but again you would need to look at how that could actually be enforced.

[Tom Tugendhat]

Q It is nice to see you, Mr Swabey. May I ask specifically about the governance aspect, which is your area? Accountability is fundamental to governance. You cannot hold people to account for things that they are not responsible for, or likewise the reverse. Will you touch a little on how you see that improving—not just the accountability in financial transparency, and all the anti-money laundering and various other aspects we have spoken about, but the ability to hold companies to account for other governance areas, whether those are corporate social responsibility, clean-up, environmental or many others?

Peter Swabey: The Bill deals with some very specific issues, which are not necessarily those. I think that the Bill would need to be broadened significantly were it going to get into things like sustainability, corporate social responsibility and so on.

[Tom Tugendhat]

Q You do not think that cleaning up Companies House, making people accountable, and understanding who they are and who knows what are important for governance?

Peter Swabey: No, I think that is very important for governance. What I was saying was that you were then talking about some of the other issues, such as corporate social responsibility, which are probably outwith the scope of the Bill as it stands.

[Tom Tugendhat]

Q I do not agree; let me push back on that. One of the things we have a problem with in the community that I am lucky enough to represent is dumping waste—fly-tipping—and it so happens that occasionally, it is done by companies that then disappear. I think the Bill helps to address that. Do you not?

Peter Swabey: Absolutely, yes.

[Tom Tugendhat]

Q So it does have some environmental effect.

Peter Swabey: Yes, you are right. I had not thought of that aspect of it—I was thinking in terms of the reporting that companies do—but yes, in terms of tracking down defaulting companies, I think it will help you.

[Tom Tugendhat]

Q Would you agree, then, that it may also support other areas of governance: the ability to oversee, for example, different areas of employment, human trafficking or whatever it might be, and to go through companies that set up and disappear far too quickly?

Peter Swabey: Yes, absolutely. Removing the ability for companies to go bust one day and reappear the next with a very similar name and very similar directors, but without all those tedious debts that they used to have, is one of the really important issues.

[Tom Tugendhat]

Exactly—phoenixing.

Peter Swabey: I think that is really important.

[Tom Tugendhat]

Q I am very glad you are supportive of that. I think this makes a huge difference; as you rightly say, it is one step on the journey, but it is still a huge difference from where we are.

I also wondered if you could talk a little bit about whether you think it is going to help with economic crime. Clearly, although I am not a BEIS Minister, one of my responsibilities is fraud. The presence and disappearance of corporate entities is, I am afraid, something that has caused more than its fair share of fraud. How do you think the Bill might be able to help with that?

Peter Swabey: I think the Bill will help with that by making it possible to have greater confidence in the directors who are responsible for those companies actually being real people. We were talking a little while ago about the ease with which you can set up a company, and the limited verification of directors that goes on. We have a verification process in the Bill that will help to ensure that those people are actually the people you believe them to be, and that there is an address where you can get hold of them and, particularly, where the forces of law enforcement can get hold of them should they need to. That is a real strength.

[Tom Tugendhat]

I am very grateful, not only for your evidence today, but for the work you do and the oversight you bring. It does make a huge difference, and I am very grateful indeed for it. Thank you.

[The Chair]

Thank you very much. If there are no further questions from Members, we will thank the witness for his evidence and move on to the next panel. Peter, thank you very much for your time; we greatly appreciate it.

I am going to suspend the sitting, because we have a little bit of time before the next evidence session, and the witness is not in the waiting room yet because she is giving evidence via Zoom.

--- Later in debate ---

[Seema Malhotra]

Q I want to come back on how we can take practical steps to tackle this. I think you mentioned the Foreign Policy Centre. Are there more specific measures we could take in the Bill?

Catherine Belton: In July, the MOJ forwarded anti-SLAPP legislation. Unfortunately, because of the chaos of the last couple of months, that has not really gone anywhere. That legislation could be attached, as is, to the Economic Crime and Corporate Transparency Bill. The Bill as drafted slightly toughens the criteria for claimants; they have to prove that there is a significant likelihood that they have a real claim. You should speak to the FPC to weigh whether it is worth pursuing their draft laws as a better model, or whether it is enough to use the one already drafted by the MOJ. They had extensive consultations on that, but now it looks like all the momentum has gone. It is astonishing to me that this is not being pursued as a priority, given the situation we are in. It is absolutely vital that we shine light on individuals who may be operating on behalf of Putin to undermine western support for Ukraine, and to undermine our resolve this winter as we face enormous cost of living hikes. It is really important.

[Tom Tugendhat]

Q Catherine, thank you very much for giving evidence to what must be your 20th or 30th Committee in the last 12 months. I am very grateful for the work you do. Could you tell us how you think the reforms to Companies House will improve oversight of listed finance? As you say, it is a building block.

Catherine Belton: You say that this is my 20th or 30th time giving evidence, but unfortunately, it is not. I have only spoken on SLAPPs before. I will leave the realm of Companies House reforms to people who are more expert on it than me.

[Tom Tugendhat]

Okay, thank you.

[The Chair]

If there are no further questions from Members, thank you very much, Catherine, for taking the time to speak to us.

Examination of Witness

Professor Jason Sharman gave evidence.

--- Later in debate ---

[The Chair]

Thank you. I move finally to Tom Tugendhat.

[Tom Tugendhat]

Q Professor, thank you very much indeed. I am grateful to you for reminding us that Magna Carta guarantees private property in various ways. Various legal jurisdictions, including the United States, Italy, the European convention on human rights, European property law and, indeed, many other jurisdictions around the world have all maintained and guaranteed it, which makes this so difficult. That said, do you agree that it is important to try to find out who owns what, so that we can at least take action where we have a legal ability to do so, and does this Bill help with that?

Professor Jason Sharman: Yes and yes. I think this is a modest positive step, but, given the track record of legislation, I would say that it has to be implemented. That is where the problem has been heretofore, and I can possibly anticipate that it may be the problem here, too. If you say, “You have to identify yourself as the owner of a company,” and you have entries in Companies House saying, “My name is XXX XXX,” and that does not get challenged, then more information is not necessarily better if that information is junk.

[Tom Tugendhat]

Q No, that is true, and that is why the work being done between Companies House and the agencies is so important—to ensure that Companies House goes from being a pinboard to being a regulator and a check. That is a very important move. It is not the same as the FCA or a regulator of that kind, but at least it is beginning to verify in terms of ID and so on. How much of a difference do you think the overseas territories and Crown dependencies verifications have already made?

Professor Jason Sharman: I mentioned briefly that some of my research, together with Mike Findley and Dan Nielson, has been to impersonate would-be money launderers and look to set up companies in various jurisdictions. It is much harder to set up companies, and the standards are much more rigorous, in the Cayman Islands, the British Virgin Islands and the Crown dependencies than in the UK. Of the UK jurisdictions, the UK is the easiest place to set one up, so I think the UK could learn a lot from its overseas territories and Crown dependencies. I noticed with interest that a couple of the other witnesses here said the same.

[Tom Tugendhat]

Q It is clear that there is a huge number of changes. You will know about the work that we have done in the past on the Foreign Affairs Committee and now in Government on trying to clean this up. This is something that, sadly, has lasted for the best part of 100 years, with no Government really making any effort to do anything about it until now. It is interesting that we are here again with a number of registrations, many of which were warned about in the 1970s, ’80s, ’90s, noughties and, now, the ’10s and ’20s. I am glad that we are doing something about it. Do you think that Companies House is going to be able to do that if it has the proper resources, or is it going to require other agencies as well?

Professor Jason Sharman: No, I do not think Companies House will be able to do it. Its main function is passive and archival; it is a library mainly. I think it is just not in its DNA to be otherwise. I think most of the solution for this is in the private sector. I am talking about properly regulated, supervised and audited corporate service providers. I co-authored a report 10 years ago with the World Bank called “The Puppet Masters”, and that was overwhelmingly the conclusion that we came to.

[Tom Tugendhat]

Q Would you say that the extra powers given to organisations such as the Solicitors Regulation Authority and its equivalent in Scotland are important to ensure that such regulators actually do have teeth? At the moment, as you will know, the fines form both of them are very low. This would, one hopes, connect to the work that we did in 2017 or 2018—I cannot remember exactly when—for the report “Moscow’s Gold”, where the Foreign Affairs Committee highlighted the role of enablers, not just regulators.

Professor Jason Sharman: I completely agree. I think, even more, that HMRC, as the regulator for corporate service providers, those enablers, has been completely missing in action. If there were one bit of the public sector that I would change, repurpose or fund, it would be to get HMRC to take its duty to regulate and penalise corporate service providers seriously. It has just been completely missing in action so far.

[Tom Tugendhat]

Thank you very much.

[The Chair]

If there are no further questions from Members, I want to thank the witness for his evidence. Professor Sharman, thank you very much for taking the time to come and speak to us.

Ordered, That further consideration be now adjourned. —(Nigel Huddleston.)

Draft Crime (International Co-operation) Act 2003 (Designation of Participating Countries) (England, Wales and Northern Ireland) Order 2022

Tom Tugendhat Excerpts

Wednesday 26th October 2022 General Committees

[The Minister for Security (Tom Tugendhat)]

The purpose of the draft statutory instrument is to designate Georgia, Liechtenstein, Luxembourg, the Republic of Moldova, Switzerland and Turkey as participating countries—that is, countries that have ratified the second additional protocol to the 1959 European convention on mutual assistance in criminal matters. Designation will allow us to co-operate with them on specific kinds of mutual legal assistance. The draft order only establishes an ability to provide or seek certain types of assistance to or from these countries; it does not create an obligation to do so. Incoming mutual legal assistance requests from designated participating countries will be reviewed in line with existing practice, which includes the undertaking of a human rights assessment. The details are set out in the explanatory memorandum. It is important to note that the draft instrument does not include Russia. Although Russia is a signatory of various agreements under the 1959 convention, we have chosen not to include it for obvious reasons.

The UK is committed to improving the provision of mutual legal assistance across borders. That will enhance the co-operation that the UK can offer to and seek from other countries. Clearly, mutual legal assistance is a key tool in fighting cross-border crime and in ensuring justice for British victims of crime.

--- Later in debate ---

[Tom Tugendhat]

It is a great pleasure to be under your chairmanship, Mr Efford. I am grateful for the shadow Minister’s kind words, and pleased that she is not facing a fifth, I think it would have been, opposite number. I will write on the frequency of the use of the provisions; they are quite well used, but I will give details in writing.

Question put and agreed to.

Draft Terrorism Act 2000 (Alterations to the Search Powers Code England and Wales and Scotland) Order 2022

Tom Tugendhat Excerpts

Wednesday 19th October 2022 General Committees

[The Minister for Security (Tom Tugendhat)]

I beg to move,

That the Committee has considered the draft Terrorism Act 2000 (Alterations to the Search Powers for England and Wales and Scotland) Order 2022.

It is a great pleasure, Ms Elliott, to be here under your chairmanship.

The draft order was laid before Parliament on 18 July. Following the horrific terrorist attack at Fishmongers’ Hall in November 2019, the then Home Secretary commissioned the Independent Reviewer of Terrorism Legislation, Jonathan Hall KC, to review the multi-agency public protection arrangements—commonly referred to as MAPPA—used to supervise terrorist and terrorism-risk offenders on licence in the community.

The Police, Crime, Sentencing and Courts Act 2022—hereafter referred to as the 2022 Act—established three new powers for counter-terrorism policing: a personal search power; a premises search power; and a power of urgent arrest. Those powers were established in response to recommendations made by Jonathan Hall KC, following his review of MAPPA. The draft order relates to the new power of personal search, the creation of which was also recommended by the tragedy at Fishmongers’ Hall and its prevention of future deaths report.

The personal search power was inserted into the Terrorism Act 2000—new section 43C—by the 2022 Act. The new search power came into force on 28 June this year. As set out by the Government during the passage of the 2022 Act, the new personal search power applies across the United Kingdom, enabling the police to stop and search terrorist and terrorism-connected offenders released on licence who are required to submit to the search by their licence conditions, should the Parole Board determine that such a condition is necessary. The officer conducting the stop and search must be satisfied that it is necessary to exercise the power for purposes connected with protecting members of the public from a risk of terrorism.

Section 47AA of the Terrorism Act 2000 imposes a requirement on the Secretary of State to prepare a code of practice containing guidance about the exercise of search powers that are conferred by the Act. In June this year, Parliament approved regulations laid by the Government that amended section 47AA so that it extends to cover the new personal search power inserted into the Terrorism Act by the 2022 Act. This created a requirement for the Secretary of State to prepare a revised code of practice that includes guidance on the exercise of the power conferred by new section 43C. We duly prepared a draft revised code of practice, and the draft order seeks Parliament’s approval to bring into force the revisions we have made to the existing code.

I shall now set out the nature of the revisions that the Government have made. The primary update to the code of practice is the incorporation of the new stop-and-search power provided for by section 43C of the Terrorism Act 2000. The revised code sets out important parameters that govern the use of the section 43C power and provides clarity for officers on the power’s scope. That includes providing guidance on the thresholds to be met before the section 43C power can be used, scenarios in which it might be appropriate for use, and the powers of seizure associated with the search power.

We have also set out clearly within the revised code the limitations on the clothing that someone can be required to remove when the section 43C power is exercised by the police. In keeping with existing stop-and-search powers, police officers exercising the section 43C power may not compel someone to remove any clothing in public except for an outer coat, a jacket or gloves, and an intimate search may not be authorised or carried out under the new power.

The new section 43C stop-and-search power has been created specifically to manage the risk posed by terrorist offenders on licence who are assessed to be high or very high risk to the public. The Government plan to collect data from police forces on the use of this targeted power, as we routinely do for other stop-and-search powers, and to make such data publicly available through future statistical publications.

Given that the existing version of the code was brought into force in 2012, the Government have also made other minor changes to ensure that it accurately reflects current practice, legislation terminology and organisational responsibilities. The updated code reflects the creation of police and crime commissioners and structural changes to other policing authorities, including the creation of authorities overseeing combined police areas. We have also updated organisational names. For example, we have replaced previous references to the Association of Chief Police Officers’ Counter Terrorism Coordination Centre with up-to-date references to the Counter Terrorism Policing National Operations Centre.

The revised code also includes a new paragraph that references the Children Act 2004, and its Scottish equivalent, to highlight the need for the police to ensure that, in the discharge of their functions, they recognise the need to safeguard and promote the welfare of all persons under the age of 18. Although it is not new policy, when revising the code the Government considered it important for such safeguarding duties to be made explicit. We have made other minor but necessary amendments, such as updating links and contact details within the code. Those include refreshing the web address where the most up-to-date version of the Government’s counter-terrorism strategy—known as Contest—can be found.

In the course of revising the code, the Home Office has consulted the Lord Advocate and other appropriate persons and organisations, including the Independent Reviewer of Terrorism Legislation, Counter Terrorism Policing and Police Scotland, all of whom are supportive of the approach. The revised code promotes the fundamental principles to be observed by the police, and helps to preserve the effectiveness of—and public confidence in—the use of police powers to stop and search under the Terrorism Act 2000.

--- Later in debate ---

[Tom Tugendhat]

I am grateful for the cross-party support for these important measures.

[Sir John Hayes (South Holland and The Deepings) (Con)]

Given the cross-party support that the Minister was just celebrating, would it be useful for the Home Secretary to write to chief constables to remind them of the importance of the new powers, and to ensure that they are up to date on how they might be applied? It could be helpful, in the circumstances, to reflect the general consensus.

[Tom Tugendhat]

I will definitely take that back to the Home Secretary; I am sure that she will be delighted to do that. I am sure chief constables will be aware that the measures have cross-party support, and therefore the support of the whole country.

Question put and agreed to.

National Security Bill (Thirteenth sitting)

Tom Tugendhat Excerpts

Committee stage
Tuesday 18th October 2022 Public Bill Committees

[The Chair]

Although that is an important matter for the ISC and for this Committee, it is not a point of order. The Minister and others, however, will have heard the right hon. Gentleman’s point, and will no doubt take it into consideration in the future.

New Clause 8

Disclosure orders

“Schedule (Disclosure orders) makes provision for disclosure orders.”—(Tom Tugendhat.)

This new clause introduces the new Schedule inserted by NS1.

Brought up, and read the First time.

[The Minister for Security (Tom Tugendhat)]

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

[The Chair]

With this it will be convenient to discuss Government new schedule 1—Disclosure orders.

[Tom Tugendhat]

Thank you very much for chairing this sitting, Mr Gray. It is a pleasure to be here under your chairmanship, and a great pleasure to introduce new clause 8 and new schedule 1, which introduce a suite of measures to allow law enforcement officers to apply to the courts for orders to gather information that will assist investigations into foreign power threat activity. As with the other police powers in the Bill, the Government have carefully considered relevant existing legislation, and looked to emulate it where it has proven effective in investigating other serious crimes. I will first speak more broadly about the need for the measures as a whole, before turning specifically to disclosure orders.

Most modern investigations include lines of inquiry into finances and other property, sometimes as a starting point and sometimes to enhance other leads. Financial investigations are often critical in developing evidence that is used in criminal proceedings where there is a financial element, by identifying and tracing criminal assets and uncovering the extent of criminal networks. Financial investigation has become increasingly important in criminal investigations in recent years.

In his recent letter to the Committee, the national lead for counter-terrorism policing, Matt Jukes, stated that it can be difficult for his officers to conduct effective investigations into state threats with the current powers and tools available, and that police would greatly benefit from the inclusion of financial investigative measures. The police have stated that these lines of inquiry are particularly important in state threats cases, where actors may be motivated by financial gain but also where they deploy sophisticated forms of tradecraft, meaning that their criminal conduct is even more difficult to uncover, disrupt and evidence than for other crimes. In many cases, financial and property investigations form an important part of establishing the link between the activity and the foreign power, particularly regarding investigations into obtaining material benefits from a foreign intelligence service.

Investigations into property and finances can take place in relation to any form of criminality, but Parliament has already recognised, in both terrorism legislation and the Proceeds of Crime Act 2002, that there are certain circumstances where it is appropriate for investigators to have access to broader investigatory powers. The Committee has also recognised, in particular during our debates on schedules 2 and 3, that state threats investigations are an area where it is appropriate for investigators to have access to enhanced powers. The addition of these new financial and property investigation powers in relation to foreign power threat activity will ensure that law enforcement has the tools it needs to effectively conduct state threats investigations, prevent and mitigate harmful activity and bring those responsible to justice.

The Committee will note that these new powers are available to National Crime Agency officers, reflecting the Government’s intention, as set out in the integrated review of defence and security, to ensure that the NCA has the capabilities that it needs and to pursue greater integration where there is an overlap between serious organised crime, terrorism and state threats.

I want to take this opportunity to inform the Committee that as we have finalised these provisions, we have identified other areas in the Bill where the drafting needs to be tailored to ensure that it is consistent regarding the availability of the powers to the NCA. These small amendments will be addressed on Report.

Turning to disclosure orders, as we have discussed in Committee, schedule 2 provides for a number of powers that law enforcement can use to obtain information in state threats investigations. Law enforcement investigators require disclosure orders for state threats investigations in order to access non-excluded material by compelling individuals or organisations to provide information to investigators. It is important to note that disclosure orders cannot compel someone to answer any question or provide information that is legally privileged, or to produce excluded material. Excluded material is defined under the Police and Criminal Evidence Act 1984 and includes personal records relating to physical or mental health obtained in the course of a trade or profession, human tissue held in confidence and taken for the purposes of diagnosis or medical treatment, and journalistic material held in confidence. If excluded material were required by investigators, a production order under schedule 2 would be required.

Much of the information that investigators seek under a disclosure order may be considered confidential in nature, such as payment details, but is not classed as excluded material. That may be required because the police have previously approached an organisation to ask for the non-excluded material to be provided, but the organisation has refused because it does not consider that it should disclose the information in the absence of a clear power of compulsion. It may be because the police are conducting a complex investigation involving several organisations that could require multiple requests for information over time. In such a scenario, which is likely to occur in state threats investigations, the police require a streamlined process whereby one order is available to cover separate requests for information from multiple organisations without creating an undue administrative burden on law enforcement, the courts or those who might receive such requests.

In the absence of a disclosure order, a schedule 2 production order, if applicable, would need to be made for every request for information, requiring a large amount of police resource as well as court time. Disclosure orders streamline this process and reduce the numbers of orders needed for requests for non-excluded material during an investigation. For example, if the police were conducting a state threats investigation into an individual and needed to access information from several airline companies regarding the suspect, the company may be willing to provide only basic customer information, such as the full name, without a formal court requirement. If the police required access to the suspect’s payment information used for a plane journey that is suspected of being related to state threat activity, the company may refuse to provide that information, even if investigators provided the company with reassurance that providing this information was in the interests of the prevention of crime. Executing a warrant on the company may be possible, but may not be an appropriate course of action by the police. In some cases, a production order under schedule 2 might be available, but that will not always be the case. Disclosure orders will provide a more proportionate and appropriate way of providing investigators with the information required.

In another example, the police may suspect that a person is purchasing a specialist piece of computer equipment to use in the commission of a state threats offence. The police suspect that the equipment has been purchased from one of a small number of possible companies. In that case, a single disclosure order could be sought, enabling the police to seek information from the companies in question, instead of the police needing to seek multiple production orders.

We recognise that these orders could enable the police to give a notice to a wide range of organisations. As such, senior authorisation is required within law enforcement before an application can be made to the courts. In addition to the requirement for senior authorisation, a disclosure can be made only in relation to an investigation into the identification of state threats property, which is defined as money or other property that could be used for the commission of foreign power threat activity, or the proceeds from such activity. This restriction to investigations into relevant property reflects the scope of the equivalent powers in terrorism and proceeds of crime legislation.

Furthermore, the judge must be satisfied that there are reasonable grounds for believing the information being sought would be of substantial value to the investigation, and for believing that it is in the public interest for the information to be provided, having regard to the benefit of the investigation. Disclosure orders provide for an effective and flexible means of obtaining information in a state threats investigation. Sitting alongside the powers of schedule 2, they would ensure that investigators have efficient and effective access to the information that they need to conduct their inquiries.

[Holly Lynch (Halifax) (Lab)]

It is always a pleasure to serve under your chairmanship, Mr Gray. I also welcome hon. Members back to the final day of the Committee. We welcome new schedules 1, 2 and 3, and hope that they will reflect the complex and evolving nature of state threats, and the significant technical and financial resources that provide the capability for sustained hostile activity.

For too long, our police and security services have had to use blunted tools in this regard, not designed to address adequately the challenges posed by modern day espionage. We are grateful to Counter Terrorism Policing for submitting written evidence to the Committee, and making its support for the new schedules 1, 2 and 3 very clear. Frankly, the Met provided far more in its written evidence on the rationale of these provisions than the explanatory notes accompanying the new schedules from the Government—a point made by my right hon. Friend the Member for North Durham.

The fairly non-existent explanatory notes are a constant challenge from this part of the Bill onwards, affecting later amendments, which is disappointing for all hon. Members trying to follow the detail closely. As the Minister said, Assistant Commissioner Matt Jukes said in his written evidence to the Committee:

“We have requested financial investigation powers to support our investigations in this space. To this end we have articulated a clear requirement to emulate various investigatory powers within the Terrorism Act which centre on financial investigations as well as examination of material which can be used for investigatory purposes. We are assured that these will be introduced by way of a forthcoming amendment. If so, this will further ensure that we have the tools required to successfully investigate and disrupt state threat activity.”

We welcome the new schedules, and now that the long overdue Economic Crime and Corporate Transparency Bill has been published, no doubt the new schedules are intended to work alongside some of the part 5 provisions in that legislation. Currently, terrorism disclosure orders can be made under schedule 5A of the Terrorism Act 2000. Counter Terrorism Policing has called for an explicit disclosure order for state threats, stating that it will help investigators benefit from a streamlined process, whereby one order is available to cover separate requests for information from multiple organisations, without the need to return to court. I want to push the Minister on oversight. I have made the case for an independent reviewer of all the new measures in the Bill. As those will be investigatory powers, will the Minister confirm that the investigatory powers commissioner will have responsibility for overseeing their use?

Turning to paragraphs 7 and 17 of new schedule 1, paragraph 7 outlines offences in relation to disclosure orders. Sub-paragraph (3) states that a person commits an offence if

“in purported compliance with a requirement imposed under a disclosure order, the person—

(a) makes a statement which the person knows to be false or misleading in a material particular, or

(b) recklessly makes a statement which is false or misleading in a material particular.”

By comparison, paragraph 17(1) states that a

“statement made by a person in response to a requirement imposed under a disclosure order may not be used in evidence against that person in criminal proceedings.”

I cannot quite square that off. I am keen to better understand why the information provided by a person under a disclosure order could not be used as evidence in criminal proceedings.

Before concluding, as I have said before, I accept that it is standard to refer to a police officer as “constable” in legislation, despite the fact that in doing so we are referring to police officers of any rank, not the rank of constable, which seems problematic. New schedule 1 is a prime example of where it gets messy. Paragraph 1(5) says that an appropriate officer for the purposes of these powers is either a constable or a National Crime Agency officer. It is not until paragraph 2(10) that the provision states that an appropriate officer must be a senior officer or authorised by a senior officer. Not until paragraph 9(4) does it confirm that “senior officer” must be a superintendent or above. Would it not be clearer to be explicit about the stipulated rank required to exercise certain powers at the earliest opportunity, instead of allowing for the ambiguity of the word “constable”? The last thing any of us want is for any ambiguity to be exploited by defence lawyers in the courts.

--- Later in debate ---

[Maria Eagle]

Sorry; it is in new schedule 1. That was my mistake, Mr Gray, and I apologise. I am not seeking to confuse proceedings any more; it is confusing enough to have to scrutinise the provision without an explanatory memorandum. That makes this kind of provision very difficult to scrutinise with any real sense. The point I wanted to make is about paragraph 3(4) of schedule 1, which says,

“A disclosure order has effect despite any restriction on the disclosure of information imposed by an enactment or otherwise.”

The words “by an enactment” seem to make it pretty clear that unless it excludes material, the provision is designed to enable the investigating authority to look at anything. Can the Minister give an example of what that aims to remedy? What lacuna is it aimed at preventing? We are talking about waving through a provision that allows a disclosure order to ignore another enactment, and that seems to me to be a large power.

The provision goes on to say, “or otherwise”, which is an absolute catch-all phrase. Can the Minister can explain why the provision is drafted so widely, as well as what kind of “otherwise” arrangement it seeks to get around and why? It seems to me to be extraordinarily wide. We might have seen the rationale for that in an explanatory memorandum, had there been one, but we do not have one to hand. Perhaps the Minister can tell us whether we will have an explanatory memorandum before the completion of the Commons stages of the Bill. I think that waving through extraordinarily wide arrangements is cause for concern if we are trying to scrutinise what the Government seek to do and why.

[Tom Tugendhat]

I thank hon. Members for their comments so far. I will first touch on the point that has been raised about the explanatory notes. I am told that it is normal procedure for that to be published before the Bill is introduced to the Lords—

[Mr Jones]

Not true!

[Tom Tugendhat]

I will bow to the superior knowledge of age and give way.

[Mr Jones]

That is complete nonsense. Usually, there are explanatory notes for amendments, so I do not know where that suggestion has come from.

[Tom Tugendhat]

I will be taking that up with officials later, and I will find out why that has been said.

[Mr Jones]

And stop making things up.

[Tom Tugendhat]

The right hon. Gentleman knows that I would never do such a thing. In response to the provision on oversight, we discussed in the last sitting that we are looking at different forms of oversight. While that has not yet been clarified, I will engage with the hon. Member for Halifax to ensure that we have a form of oversight that works, be that from one of the existing oversight bodies or from another body. There are various different arguments, so I will come back to the hon. Member on that.

The hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East asked what the measures were based on. The Bill is based on the Terrorism Act 2000, but we also looked at the Proceeds of Crime Act 2002. We sought consistency in the schedules by using the so-called TACT and the Proceeds of Crime Act as their basis. It is important to note that Police Scotland has been involved in this endeavour and is content. It has been a very important part of the conversation.

The hon. Member for Halifax asked where these orders could come from. Police need to compel individuals or organisations to answer questions. Because of the different natures of potential production orders, they may involve not just a single individual, but multiple sources; that is why I mentioned multiple companies. In this case, one may be following a particular individual but not be certain which airline they travelled on. Therefore, this could include either multiple companies that may have produced a good or a service, or multiple agencies that have supplied it. That is where it comes from.

Question put and agreed to.

New clause 8 accordingly read a Second time, and added to the Bill.

New Clause 9

Customer information orders

“Schedule (Customer information orders) makes provision for customer information orders.”—(Tom Tugendhat.)

This new clause introduces the new Schedule inserted by NS2.

Brought up, and read the First time.

[The Chair]

With this it will be convenient to consider Government new schedule 2—Customer information orders.

[Tom Tugendhat]

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

New clause 9 and schedule 2 seek to insert customer information orders into the Bill as part of the suite of investigatory measures. Those who engage in state threats activity are highly trained individuals who have knowledge of tradecraft that can obfuscate their identity and real intentions.

For example, the tradecraft could be used to conceal transactions by creating secret bank accounts under false identities, or accounts registered to different addresses, in order to send or receive money for conducting activity. The operational objective of a customer information order is to enable an investigator to identify accounts and other account information in relation to state threats investigations. For example, this could be where a foreign agent is paying others to conduct state threats activity in the United Kingdom and police need to identify where the agent’s account is held, or it could be where a suspect is using a covert account under a false identity to receive funds to use for the purposes of state threats activity.

The customer information order is therefore intended for use as a tool of discovery during an investigation, often in the early stages. Once accounts have been identified through a customer information order, they could, where appropriate, be subject to further monitoring or investigation through a schedule 2 production order or an account monitoring order. Without customer information orders, accounts used by those conducting state threats activity may go unidentified, reducing investigative opportunities and, in turn, the ability for law enforcement to disrupt harmful activity and bring offenders to justice. We recognise that such orders could potentially require any financial institution to provide information about relevant customers. As such, senior authorisation is required within law enforcement before an application can be made to the courts.

We expect that, in practice, the powers will be used by police and NCA officers who have received relevant financial investigator training, and we are continuing to work with the police and NCA on creating the relevant guidance. Again, we have modelled the provisions on the terrorism equivalent and the measures used in the Proceeds of Crime Act 2002, and the consistency of these processes will ensure that law enforcement officers can make the most effective use of the powers. As I have set out, the customer information orders are another important investigative tool, opening new lines of inquiry and ensuring that law enforcement can run effective state threats investigations.

[Holly Lynch]

New clause 9 and new schedule 2 establish customer information orders, which authorise the police and NCA officers to obtain customer information from financial institutions. In its written submission to the Committee, for which we are all grateful, Counter Terrorism Policing has welcomed the provision, stating that it will

“enable investigators to identify accounts in relation to state threat investigations, or where an individual is using a covert account under a false identity to receive funds to use for the purposes of state threats.”

As the Minister outlined, the tool has been available to law enforcement for terrorism investigations thanks to schedule 6 to the Terrorism Act 2000, and it has been available for criminal investigations through the Proceeds of Crime Act. However, according to Counter Terrorism Policing, it has not been possible to use either Act in relation to state threats investigations, so we welcome the provision. It prompts the question of why we have not addressed this issue sooner.

Subsection (2) states that the judge may grant the order if they are satisfied that

“the order is sought for the purposes of an investigation into foreign power activity”,

and that

“the order will enhance the effectiveness of the investigation.”

We have spoken a lot about the value of an independent reviewer, and I welcome the substance of the Minister’s comments. It is worth keeping under review the threshold of a judge being satisfied that the order is sought for the purposes of investigation into foreign power activity. We cannot use these orders without good cause, but if we need them to be able to find evidence of foreign power activity, will investigators be able to satisfy a judge prior to that? It will be interesting to see how many applications are granted and rejected once we start to work with the orders. Aside from those points, I am happy with new schedule 2.

[Stuart C. McDonald]

I will make a couple of brief points. The broad thrust of the new schedule and the intention behind it seem absolutely fine, but I am interested in the tests that must be satisfied before an order is made. Under the previous schedule on disclosure orders, the judge has to be satisfied that there are reasonable grounds for suspicion, that there is substantial value in the information gained under the order and that the order would be in the public interest.

In contrast, here in new schedule 2, the judge has to be satisfied only that the order is sought for the purposes of an investigation and that it will enhance the effectiveness of that investigation. That seems a pretty low bar to allowing this pretty invasive procedure to be gone through. Why that choice of language? I guess it is modelled on the provisions that have been mentioned. I have probably not been as diligent as the shadow Minister has in doing my homework and tracking through the previous bits of legislation, and I will now do that. The information gained under these orders could be pretty intrusive, so we need to ensure we are not giving carte blanche to all sorts of intrusive investigations. I am a little bit concerned about the low level of test, compared with the test for disclosure orders.

My second, brief point is that paragraph 4 of the new schedule suggests that the person whose records are about to be trawled through can seek to vary or discharge the order. It is not clear to me how they would go about doing that, given that I suspect most orders will be made without any notice, and they can even be made by a judge in chambers. What assurance can we have that people will be able to challenge this potentially intrusive investigation?

[Tom Tugendhat]

The question as to why we have not addressed this sooner is a fair one. The UK’s investigation legislation is complex, as the hon. Member for Halifax knows only too well from the homework she has obviously done for our sittings. For example, in the Proceeds of Crime Act there are more than seven investigatory orders used in criminal and civil investigations. The consideration that has gone into this has naturally been complex, and it has required a lot of time and input. This Bill, as she knows very well, has been some years—and, indeed, some Ministers—in the making.

[Mr Jones]

More to come!

[Tom Tugendhat]

Let us see. The fact that there are no recorded uses of the information orders in TACT demonstrates how sparing the use of these provisions will be.

Question put and agreed to.

New clause 9 accordingly read a Second time, and added to the Bill.

New Clause 10

Account monitoring orders

‘Schedule (Account monitoring orders) makes provision for account monitoring orders’.—(Tom Tugendhat.)

Brought up, and read the First time.

[The Chair]

With this it will be convenient to consider Government new schedule 3—Account monitoring orders.

[Tom Tugendhat]

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

I turn to new clause 10 and schedule 3—

[The Chair]

New schedule 3.

[Tom Tugendhat]

My apologies; I meant new schedule 3. New clause 10 and new schedule 3 provide for account monitoring orders for certain investigations into state threats. Police need to be able to obtain information relating to accounts held by a suspect in real time in order to identify and act on disruptive opportunities related to state threats activity. An account monitoring order will require a financial institution to provide specified information in relation to an account—for example, details of all transactions passing through the account—for a specified period not exceeding 90 days.

--- Later in debate ---

[Mr Jones]

These are sensible proposals to give our law enforcement agencies the powers they require, but I would like clarification about definitions. The Minister referred to a bank, and it is clear that this is about monitoring bank accounts. The explanatory statement, expansive as it is—I think it is one line—says:

“These orders may require financial institutions to provide specified information relating to accounts.”

I want to clarify the definition of financial institution. If we go back 20 or 30 years, it was quite clear: we had bank accounts and financial products. Today, though, there is a complex environment of organisations that work and deal with financial accounts. For example, Bitcoin is now traded between organisations, some of which are covered by the Financial Conduct Authority and others not. I am trying to get some understanding of how widely this will go.

The other issue is about bank accounts that are not in the UK. I am particularly thinking about bank accounts in the overseas territories, and what happens there. We need clarification about the remit. The measure might work very simply with banks and other financial institutions, but in an ever-changing world we have a lot of organisations that deal with people’s “accounts” where they are not regulated.

[Tom Tugendhat]

The hon. Member for Halifax asks again about the term “constable”. She is right to ask, but that is not an oversight; it is accurate. There are different levels at which different officers are allowed to warrant things. As she rightly identifies, “constable” is the generic term, and then at various points different ranks of officer are required for different levels of authority. That is in line with the TACT powers. This area of authorisation is considered less intrusive, and that is why a lower-ranking officer is allowed to ask for it.

On financial institutions, the right hon. Member for North Durham identified that banking has changed somewhat since he and I had post office accounts in the early—I will leave that there. Schedule 3 uses the same definition as that used in paragraph 6 of schedule 6 of the Terrorism Act 2000; it is designed to align. The definition of financial institution in the Proceeds of Crime Act 2002 can be found in paragraph 1 of schedule 9. Account monitoring orders can be used as part of a broader set of purposes, such as civil recovery, and they are applicable to a broader range of financial institutions. Such breadth is unnecessary in respect of state threats, which is why that is slightly narrower, but the definition is there.

Obviously, these powers cannot be used to compel institutions overseas, so we are asking for co-operation from police forces.

[Mr Jones]

I appreciate that in terms of overseas bank accounts, but there has been a lot of controversy about individual using overseas territories. If the Minister does not know the answer, he can write to the Committee to clarify the point. I just want to see how far these orders could go in terms of their effect.

[Tom Tugendhat]

The right hon. Gentleman knows very well that overseas territories come under slightly different jurisdictions, whether they are Crown dependencies or overseas territories. It depends on the jurisdiction, but I will be happy to write to him.

Question put and agreed to.

New clause 10 accordingly read a Second time, and added to the Bill.

New Clause 11

Requirement to register foreign activity arrangements

‘(1) A person (“P”) who makes a foreign activity arrangement must register the arrangement with the Secretary of State before the end of the period of 10 days beginning with the day on which P makes the arrangement’

(2) A “foreign activity arrangement” is an arrangement with a specified person pursuant to which the specified person directs P—

(a) to carry out activities in the United Kingdom, or

(b) to arrange for activities to be carried out in the United Kingdom.

(3) “Specified person” means—

(a) a foreign power specified by the Secretary of State in regulations;

(b) a person, other than a foreign power, specified by the Secretary of State in regulations.

(4) The regulations may specify a person other than a foreign power only if—

(a) the person is not an individual, and

(b) the Secretary of State reasonably believes the person is controlled by a foreign power.

(5) A person is controlled by a foreign power if—

(a) the foreign power holds, directly or indirectly, more than 25% of the shares in the person,

(b) the foreign power holds, directly or indirectly, more than 25% of the voting rights in the person,

(c) the foreign power holds, directly or indirectly, the right to appoint or remove an officer of the person, or

(d) the foreign power has the right to direct or control the person’s activities (in whole or in part).

(6) In subsection (5) “officer”—

(a) in relation to a body corporate, means a director, member of the committee of management, chief executive, manager, secretary or other similar officer of the body, or a person purporting to act in any such capacity;

(b) in relation to a partnership, means a partner or person purporting to act as a partner;

(c) in relation to an unincorporated association other than a partnership, means a person who is concerned in the management or control of the association or purports to act in the capacity of a person so concerned.

(7) The Secretary of State may make regulations specifying a foreign power or a person other than a foreign power only if the Secretary of State considers it reasonably necessary to do so to protect the safety or interests of the United Kingdom.

(8) The requirement in subsection (1) does not apply to a foreign power.

(9) Regulations specifying a foreign power or a person other than a foreign power may provide for subsection (1) to apply, with modifications specified in the regulations, in relation to a foreign activity arrangement made with the specified person before the regulations come into force.

(10) A person who fails to comply with subsection (1) commits an offence if the person—

(a) knows, or

(b) ought reasonably to know,

that the arrangement in question is a foreign activity arrangement.’—(Tom Tugendhat.)

NC11 to NC28 require certain arrangements with, and activities of, foreign powers and foreign persons to be registered. They are intended to form a new Part 2A, referred to in explanatory statements as the registration scheme. This new clause requires registration of arrangements with specified persons to carry out activities in the UK.

Brought up, and read the First time.

[Tom Tugendhat]

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

[The Chair]

With this it will be convenient to discuss the following:

Government new clause 12—Offence of carrying out activities under an unregistered foreign activity arrangement.

Government new clause 13—Requirement to register activities of specified persons.

[Tom Tugendhat]

New clauses 11, 12 and 13 are the first of a series of amendments relating to the foreign influence registration scheme announced by the Home Secretary on Second Reading. I will come to the new clauses shortly, but first I want to make some introductory remarks about the scheme itself.

In the 2020 Russia report of the Intelligence and Security Committee, it was recommended that future counter-state threats legislation should address the issue of those acting on behalf of a foreign power and seeking to obfuscate their links or relationship. The director general of MI5 strongly emphasised the importance of legislating to ensure that those acting covertly could be pursued through criminal means to make the operating environment harder for those who intend to disguise or obfuscate who they are acting for. The ISC’s report identified the need for stronger transparency legislation, akin to that in place in the United States—namely, the Foreign Agents Registration Act 1938, known as FARA.

FARA requires any person, regardless of nationality, to disclose to the Department of Justice where they represent the interests of foreign powers in a political or quasi-political capacity, as described by the report. It is a disclosure requirement that applies far beyond a situation in which a person acts for a foreign intelligence service, extending to activities undertaken for foreign powers as well as other entities and individuals.

Only four years ago, the Australian Parliament passed its contemporary equivalent to FARA, the Foreign Influence Transparency Scheme Act 2018. The Australian scheme requires the registration of political influence activities undertaken for, or on behalf of, a foreign power or other individuals or entities subject to foreign power control. Both schemes contain a range of exemptions, offences and enforcement powers to further shape and support enforcement of the scheme. Although not like-for-like schemes, they share the principle of tackling covert influence through greater transparency.

There is evidence of the value of these schemes. A submission from the Australian Attorney-General’s Department to an ongoing review of FITS, which commenced in August last year, describes the behavioural changes that it has seen as a result of the scheme’s implementation: some organisations and individuals have adopted better transparency practices, while others have seemingly ceased activities that would be registrable. Enforcement of the US’s FARA has increased in recent years. That has also resulted in behavioural change, as well as prosecutions for non-compliance, including of one very high-ranking former military officer.

I am delighted to be before the Committee today to talk through the proposed UK scheme. This is an important piece in our package of measures and is the area of legislation that calls on sectors to play their part in making it difficult for foreign powers to operate covertly in the United Kingdom. Similar to the position with the precedents that I have just described, its overarching aim is to deter foreign power use of covert arrangements, activities and proxies by requiring greater transparency around certain activities that they direct, as well as where those activities are directed or carried out by entities established overseas or subject to foreign power control.

Put simply, where a foreign state deploys its influence in the UK, either directly or through third parties, that will now be subject to registration and more transparent. I must stress that the scheme’s requirements are not identical to those of the United States and Australian schemes. Although we have worked with our US and Australian colleagues to understand the lessons learned from implementation of their schemes, our scheme’s requirements reflect our own experience and the threats that we face.

The overarching aim of the scheme is to be delivered through two separate objectives and requirements. The first is to strengthen the resilience of the United Kingdom’s political system against covert foreign influence. Openness and transparency are vital to the functioning of our democracy. Where covert influence is deployed by foreign powers, directly or through third parties, it undermines the integrity of our politics and institutions. The scheme will therefore require the registration of political influence activities where they are to be undertaken within the United Kingdom at the direction of any foreign power or foreign entity, or by a foreign entity itself. I will refer to these obligations as the “primary registration requirements”.

Certain registered information will be made available to the public via a scheme website, similar to the position with the schemes of our Australian and US partners. This requirement is deliberately state and sector agnostic, as the source of foreign influence should be transparent no matter where it originates or manifests. The only exceptions, which I will come to, are where exemptions are necessary to protect existing obligations.

The second objective is to provide greater assurance around the activities of specified foreign powers or entities. The scheme contains a power to specify a foreign power, part of a foreign power, or an entity—such as a company or organisation—subject to foreign power control, where the Secretary of State considers it necessary to protect the safety or interests of the United Kingdom. It would require a person acting within the United Kingdom at the direction of a specified power or entity to register with the scheme. It would also require a specified entity to register activities to be undertaken within the UK with the scheme. I will refer to this as the “enhanced registration requirement”. Its use will be limited and subject to parliamentary approval.

These requirements will apply to certain arrangements and activities, regardless of the nationality of those carrying out the activity, and will be enforced through a range of offences and penalties, as well as powers to request information.

I also want to tell the Committee about the scheme’s exemptions, which are as follows.

[Stewart Hosie (Dundee East) (SNP)]

Before the Minister tells us about the exemptions, it would be helpful to know how the enhanced registration—let us call it tier 2 —will actually work. So far, we are in the dark. The basic registration seems eminently sensible, but what will the procedure be to specify a country, entity or person to whom enhanced registration will apply? How will it work? We need to know that before we find out who might not be expected to register in that way.

[Tom Tugendhat]

The right hon. Gentleman will see that I have a number of pages of text that I will be coming to. If he will forgive me, I will explain all these elements as we get to them.

The scheme’s exemptions are as follows: individuals to whom privileges and immunities apply in international law, as provided by, for example, the Vienna convention on diplomatic and consular relations; legal services, as well as information subject to legal professional privilege; domestic and international news publishers, including confidential journalistic material and sources; and arrangements to which the UK Government are party.

The scheme has also been designed to uphold the letter and spirit of the Belfast/Good Friday agreement. To that end, any arrangement with Ireland, or with a body incorporated or associated under the laws of Ireland, will be exempt from registration, as are activities to be carried out by such entities. That will avoid interference with the rights of citizens of Northern Ireland who identify as Irish, as well as the activities of cross-border entities and institutions.

I want to close my opening remarks—that is right; we are just starting—by mentioning George Brandis, the former Attorney General for Australia who was responsible for passing the Australian scheme. He was recently reported as commenting on the announcement of the UK scheme:

“This ought not to be in the cockpit of political controversy in the U.K. It ought to be something, because it is necessary for the protection of the national interest, that commands bipartisan support.”

That is certainly the sentiment that I have taken from Second Reading and our deliberations in Committee so far, and I look forward to working with all sides to ensure the requirements are effective and proportionate.

With that, I turn to the group of new clauses relating to the enhanced registration requirement. Each of the new clauses is substantive and so, after setting out the benefits of the enhanced requirement, I will take each in turn. The enhanced registration requirement will provide greater scrutiny of the activities of specified foreign powers or entities while deterring the use of covert arrangements. I describe it as “enhanced” because it creates wider requirements to register than the primary registration requirement, which we will come to later. That is proportionate to the aim of this part of the scheme: to provide greater assurance around the activities of specified foreign powers or entities.

The enhanced registration requirement will provide three principal benefits. First, it will provide the Government and the public with a greater understanding of the scale and extent of activity being undertaken for specified foreign powers and entities within the United Kingdom. Secondly, the offences and penalties for non-compliance will increase the risks to those who seek to engage in covert activities for foreign powers, either directly or through specified entities. Finally, the requirement offers potential for earlier disruption of state threats activity, where there is evidence of a covert arrangement between a person and a specified foreign power or entity but it is not yet feasible to bring charges for a more serious state threats offence.

[Mr Jones]

Will the Minister give way?

[Tom Tugendhat]

I will, very briefly, but the right hon. Gentleman may find that the point is covered—

[Mr Jones]

If the Minister wants to come here and just read his speech to us, that is fine, but that is not what scrutiny is. I am fully supportive of the proposals under tier 1, but I find it difficult to understand how tier 2 will work in practice. Putting countries or companies on the list will cause huge diplomatic incidents. Let us say we put Huawei on the list, for example; I am sure there would be fallout from that. As well-meaning as tier 2 is, practically, I do not think it will ever be used.

[Tom Tugendhat]

The right hon. Gentleman and I have had many debates on the nature of different foreign influence in the seven years that I have been here. We have discussed many different companies and countries in various ways. I know he shares my absolute passion for protecting the United Kingdom from foreign influence and knows the difficulty that that causes in diplomatic areas. He appreciates better than almost anyone how difficult it is sometimes to match the economic needs and requirements of the United Kingdom with the need to protect ourselves from foreign influence. He is right that this will cause difficulty. There is no getting around the fact that making a decision on the enhanced tier will have diplomatic repercussions. But the reality is that if we do not make those decisions, the implications for our economy and domestic security will be very high.

The right hon. Gentleman is absolutely right that there are companies that some of us have stood up to and made a point of identifying as actors for a foreign state—he mentions Huawei; there are others—and which are in many ways difficult examples. I am not going to say whether Huawei would or would not be subject to the enhanced tier, as we have not looked at any determinations on that, but it is quite clear that there are some countries—Russia is a good example today—that would absolutely require the enhanced tier. Different elements of Russian business would no doubt fall within it.

[Mr Jones]

Yes, but the Minister knows that there are many countries in the world that, although they are not comparable with Russia, would also cause economic harm but are not in the higher tier. Would it not be better to have a broader scheme that mirrored tier 1, with tight definitions of what needs to be registered, and apply it to all countries? We would then give ourselves protection and avoid the diplomatic pitfalls every time we wanted to follow this process.

[Tom Tugendhat]

People have to register under tier 1 anyway. That will be a public scheme that already identifies many areas. Tier 2 will make sure that there is an enhanced aspect that allows us to be clear what exactly is going on, rather than relying on a general identification. That is an important distinction.

[Maria Eagle]

Is my understanding correct that tier 1 is about capturing arrangements and activity undertaken for the purpose of influencing a political event or decision, but that the second tier will capture all other behaviour beyond political influencing, such as acting as a foreign intelligence officer? Is it correct that the scheme as set out at present is aimed at making everyone apply at the lowest level—the political influencing level—but that only more serious incidents will be dealt with by designating individual countries or companies? We are going to immediately run into the difficulty of upsetting diplomatically any person, company or country that is designated for more serious activity.

[Tom Tugendhat]

The hon. Lady is not noted for her shyness. I am surprised that she feels that the diplomatic repercussions of designating a company or country should dissuade the UK Government from defending themselves. I know she does not think that, and I know the right hon. Member for North Durham does not think that.

The different schedules identify the different natures of influence being used. As the hon. Lady rightly identifies, schedule 1 is about political influence. As I think we all appreciate in this House, that should be public. Those who seek to influence anyone in this House or anyone else by political means, whether through lobbying or in different ways, should identify on whose behalf they are doing so. I do not think that is a very contentious provision.

[Maria Eagle]

indicated assent.

[Tom Tugendhat]

I am glad to see the hon. Lady nodding. The second point is the enhanced scheme. That is where influence may come in different ways, where co-operation and interaction with different businesses that pose a particular and distinct threat may be required. That is why—we will come to this later—the political register will be public and the second register will be private, but the identification of those who are required to be registered will of course have to be public and there will be a political and a diplomatic decision that will go with that.

[Mr Jones]

I sympathise with what the Government are trying to do, and I think my hon. Friend the Member for Garston and Halewood does too, but I am never in favour of putting things on the statute book that look tough but that, frankly, will never be used. There must be a more direct way of doing this—a broader measure that applies to all countries, which is then used against relevant countries. My fear is that the measure as it is written at the moment looks tough but will not be usable.

[Tom Tugendhat]

The right hon. Gentleman raises a fair point, but I simply do not believe that if he were in my position, he would not use the powers. I would use them, and I am sure he would use them in a situation where they were required. I know that he has never shrunk from a fight or diplomatic argument, but I think that this is important. The problem is that if the enhanced power were to be used for every nation, the volume of data produced would be enormous and the imposition on companies would be huge.

[Mr Jones]

I agree with the Minister, but he has a problem. He and I have dealt with the Foreign Office and other diplomatic entities over many years: he knows that the pressure that the power will come under, and the competing arguments against security, will make it unusable.

[Tom Tugendhat]

I do not accept that, so I think we will have to end this discussion with an agreement to disagree.

[Mr Jones]

Not for the first time.

[Tom Tugendhat]

Indeed. But I entirely respect the right hon. Gentleman’s position, and I do understand the point he is making.

New clause 11 will require Ministers—specifically, the Secretary of State—to be willing to engage in a strong discussion with other Departments that rely on investment or, indeed, diplomatic leverage. Yes, I am afraid that is a balance that the Government have to make; the right hon. Gentleman is absolutely right to identify it, but I simply do not accept that that means the power will not be used. It is true that the power will be constrained, but that does not mean that it will be unused—Ministers who see the threats before them will be willing to use the powers that they have. We will no doubt continue this discussion later.

New clause 11 will provide three principal benefits. The first is that it will provide the Government and public with a greater understanding of the scale and extent of activity being undertaken for specified foreign powers and entities within the United Kingdom.

[Stewart Hosie]

The Minister explained just a few moments ago that the tier 1 registrations would be public but the tier 2 enhanced registrations would be private. I am not sure how he can argue that the tier 2 enhanced registration would give the public much more confidence if it is a secret.

[Tom Tugendhat]

The nature of the registration will not be a secret, but who has had to register will be kept private at the moment. I am already keeping this matter under discussion, so I am glad that the hon. Gentleman sympathises with my concerns. He and I are fully aware that journalism is a very powerful force in many of these areas.

[Mr Jones]

This baffles me, as it does the hon. Member for Dundee East. Tier 2 registration will not be private, will it? The order will have to be moved to put them on the list in the first place. Everyone will know, so what is the problem with providing transparency? I do not think you can have two tiers with different levels of transparency.

[Tom Tugendhat]

Let me clarify. Whoever is identified as being on the enhanced tier will be identified publicly. It is those companies that may be co-operating; at the moment, there is a discussion as to whether that should be public or private. The reason for that discussion is that some companies will be co-operating and we may feel that we wish to see that co-operation continue, even though we wish to have the compliance and registration so that we know who is doing what. The argument is that the Government should have the ability to have that information.

[Mr Jones]

If I am the CEO of a company and the Government put my company on the list, surely that will get out anyway. I would have to report it to my shareholders or board, so I am not sure about the benefits of keeping it a secret.

[Tom Tugendhat]

Forgive me, but I think the right hon. Gentleman has got this slightly the wrong way round. By definition, the company that would be identified would be a foreign company, not a UK company.

[Mr Jones]

Yes, but if I headed a French company—I am not suggesting that we use this power against the French for one minute—and had shareholders, surely I would have to tell them, and report at board meetings, that I had been on the list. It will get out anyway, so what is the point of keeping it quiet?

[Tom Tugendhat]

We are clearly speaking at cross purposes. The state that is on the enhanced register would be public. The company would be public. Those UK companies that are registering may not be. The right hon. Gentleman has it the wrong way round.

[Mr Jones]

I don’t think I have.

--- Later in debate ---

[Tom Tugendhat]

Okay. I am going to carry on, but I am very happy to continue this discussion on a later occasion.

New clause 11 will provide three principal benefits. First, it will give the Government and the public greater understanding of the scale and extent of the activity. Secondly, the offences and penalties for non-compliance will increase the risk to those who seek to engage in covert activities for foreign powers, either directly or through specified entities. Finally, it offers potential for earlier disruption of state threat activity where there is evidence of a covert arrangement between a person and specified foreign power or entity but it is not yet feasible to bring charges for a more serious state threat offence.

I want to be clear that we expect use of the enhanced registration requirement to be limited. It is an additional tool of assurance to bolster the package of measures within the wider Bill. The power to specify a foreign power or entity will be available to the Secretary of State when the Secretary of State considers it reasonably necessary to do so to protect the safety or interests of the United Kingdom. It will be subject to the affirmative procedure.

It is also vital to stress that the use of this requirement should not be taken to imply that every national of a specified foreign power or person associated with a specified foreign entity is to be mistrusted. The message here is quite the opposite: any person who complies with the obligation to declare an arrangement with a specified foreign power or entity is contributing to the safety and security of the United Kingdom by being open and transparent about that arrangement.

Although I am sure that members of the Committee will be keen to understand which foreign powers will be in scope of the enhanced registration requirement, I am sure they appreciate that it would be premature—if not damaging—to make undertakings on that at this stage. The Government will decide when the scheme is ready to be brought into force. For now, I will cover each amendment.

New clause 11 is the requirement to register foreign activity arrangements. A foreign activity arrangement is where activity is to be carried out, or arranged to be carried out, within the United Kingdom at the direction of a specified foreign power, part of a foreign power or an entity subject to foreign power control. The requirements could apply to any activities, but subsection (9) provides for this to be modified through regulations where necessary.

I wish to bring four key points to Members’ attention. First, I want to reflect on what we mean by a person required to register in this context under subsection (1). A person can be an individual, regardless of their nationality, or an entity. However, if a company or organisation is being directed by a foreign power or entity, the company or organisation would be responsible for registering the arrangement, not its individual employees.

We will shortly discuss new clause 13, which includes a requirement for specified entities to register their own activities. That is important because it makes clear our intention that an employee of a specified entity cannot be considered as being in a registrable arrangement with that entity. The approach was taken in response to sector feedback during our public consultation as a means of reducing the potential registration burden on companies and other organisations that may have many employees all engaged in the same activities.

Importantly, subsection (8) clarifies that there is no requirement for a foreign power itself to register. The scheme intends to increase assurance and transparency of activities being carried out for a foreign power where the involvement of that power might otherwise not be apparent.

[Stewart Hosie]

In new clause 11(1), “A person (‘P’)” might, as the Minister said, be an individual, an entity or a business. This is not at all clear. Is this the UK individual, entity or business or is it the overseas individual, entity or business that is directing a UK citizen? Is it a combination of the two?

[Tom Tugendhat]

Let me be completely clear, because subsection (8) makes it completely clear: there is no requirement for a foreign power itself to register. We cannot compel foreign powers or entities to register; this is a compulsion on UK entities or individuals.

The scheme intends to increase assurance and transparency to activities being carried out for a foreign power, where the involvement of that foreign power might otherwise not be apparent. As such, we would not expect other Governments to register with the scheme in respect of activity that they themselves are undertaking. As the later “interpretation” clause will make clear, that includes any person acting in the capacity of an office holder, employee or other member of staff of the foreign power, or a person whom the Secretary of State reasonably considers to be exercising such functions.

This scheme has been designed to avoid interference with our obligations under international law regarding the diplomatic and consular relations between countries, as well as the need to protect routine Government-to-Government engagement—the official visits of officials, military and other agencies of a state, for example.

Secondly, subsection (2) sets out the definition of “arrangement”, which requires there to be direction from a specified foreign power or entity to a person. That element of direction is important because it envisages a power relationship between the specified foreign power or entity and the person. The specified foreign power or entity has told the person to carry out the activity, or arranged for it to be carried out. While in practice it is entirely likely for a direction to be delivered in the language of a request, the context of the relationship between the specified foreign power or entity and the person being directed will ultimately determine whether it falls within scope.

[Stuart C. McDonald]

What happens if an intermediary is involved? What if a designated state power says to someone locally, “You arrange for these activities”, rather than saying to someone in the United Kingdom, “I want you to undertake these activities”? That falls within the terms of the new clause. That intermediary then instructs people in the United Kingdom to undertake activities. Does that not mean there is a gap in the clause and that people in the UK undertaking those activities would not have to register anything? It would be almost impossible to enforce against that intermediary requirement to register. Is there not a potential problem there?

[Tom Tugendhat]

My understanding is that—in fact, I will come back to that when I sum up, because the hon. Gentleman has raised an interesting point.

We consider a power relationship to include, for example, where the specified foreign power or entity has formally contracted a person’s support for an activity, or where it is paying a person to deliver a service. It could also include a situation where a specified entity is making a request of its subsidiary—again, the direction might be in the language of a request, but the power relationship would make it a direction. Where such formal structures are not established, a direction should include where a person is requested to act, but through the promise of compensation or coercion—for example, future payment, benefit or favourable treatment.

To be clear, though, it would not be enough for a specified foreign power or entity to simply provide funding in support of an activity—through subsidy or donation, for example. Nor could a generic request from a specified foreign power or entity be considered a “direction”—a request made through a public communication to a large distribution or mailing list, for example.

A power relationship, whether formal or informal, is necessary to ensure that unilateral activity on the part of the person is not within scope and nor is activity that is part of a collaboration and absent a power relationship. We shall set out in guidance what we intend by a direction so that it is clear to the public and to the courts what arrangements are registrable.

An arrangement also captures where a person is to arrange for activity to be carried out at the direction of a specified foreign power or entity, as well as where the person is to carry out the activity themselves. That is to ensure that a person in a direct arrangement with a specified foreign power or entity cannot avoid registration by simply contracting out the activity to a third party, creating a degree of separation between the specified foreign power or entity and the ultimate person who will carry out the activity.

Thirdly, I turn to the definition of “control”, where a specified entity is said to be subject to foreign power control. It is important that we capture the commonly used practice of foreign powers channelling state threat activity through private entities. To capture this effectively we have defined “control” under subsection (5) as being where a foreign power holds, be it directly or indirectly, more than 25% of the shares or voting rights of the entity, or the foreign power can appoint or remove officers of the entity.

Control can also be demonstrated where the foreign power has the right to direct or control the entity’s activities, allowing the Secretary of State flexibility if foreign powers exercise other significant forms of control that fall below those thresholds. The more than 25% threshold is in line with existing legislation on substantial control over an entity.

[Mr Jones]

I appreciate that it is difficult to identify control, but how would we get around the situation of a Russian oligarch who is clearly under the influence of the Kremlin, but whose company is owned through myriad different offshore companies? Would it have to be proven that the ultimate beneficiary was that individual to fall under this legislation? Those people, and even states, are very clever and hide who ultimately controls that company.

--- Later in debate ---

[Tom Tugendhat]

The right hon. Gentleman is identifying a problem that we have had with foreign ownership of companies for a very long time. That is why the Economic Crime and Corporate Transparency Bill is very important, because the ownership of companies is something that has been a challenge and he is correct to identify it. This Bill addresses certain elements of that control, but he is right that it does not address the totality, although it provides an important brick in the wall that we are building. That is why the Economic Crime and Corporate Transparency Bill and the companies registration are important.

[Mr Jones]

So, really, what we are enacting in this legislation will have to be dovetailed with the Economic Crime and Corporate Transparency Bill. The issue around Scottish limited partnerships has been quite controversial. Is the Minister saying that when the two come together, they will form the toolkit to tackle these individuals?

[Tom Tugendhat]

The right hon. Gentleman knows that there is not a single tool to deal with every task. The Bill will certainly help with a lot of things that already exist; the Economic Crime and Corporate Transparency Bill will add to it, and no doubt, in future years, different Governments will add further tools.

May I finally come to my fourth point? [Interruption.] I hear the hon. Member for Birmingham, Yardley chuntering. I will briefly summarise the procedural element of the new clause. The requirement is to register a foreign activity arrangement within 10 days of its being made, or otherwise before the activity is carried out. That is important because it may not be obvious to the Government under whose direction the person is acting. The prior registration of arrangements offers some opportunity for the Government to be informed before an activity pursuant to a foreign activity arrangement takes place. It also offers an opportunity to enforce the requirements of the scheme prior to an attempt to carry out covert influence activity.

Subsection (10) makes clear that an offence is committed if a person fails to comply with the requirement to register, and knows—or ought reasonably to know—that the arrangement is a foreign activity arrangement We will discuss the proposed range of offences shortly.

The offences relating to the other part of the scheme—where the registration of political influence activities are concerned—come with a higher bar for the prosecution to meet. Given the likely attention that the measure will receive if a foreign power, part of a foreign power or an entity subject to foreign power control is specified through regulations under subsections (3) and (4), a person should not be capable of avoiding prosecution by claiming they were unaware of the requirement to register. That said, we are mindful that a person who is unwittingly acting for a specified foreign power or entity should not be criminalised. That is why the test is such: a person can be prosecuted only if they ought reasonably to know that they were acting for a specified foreign power or entity.

New clause 12 makes it an offence to carry out activities, or arrange for an activity to be carried out, in the UK pursuant to a foreign activity arrangement that has not been registered. The requirement to register a foreign activity arrangement, which is an arrangement with a specified foreign power, part of a foreign power or entity subject to foreign power, applies to the person who is party to that arrangement—in such a case, that is the person directed by the specified person.

In practice, many other people could be involved in the activity or activities pursuant to that arrangement. For example, if the person party to an arrangement with a specified foreign power is a company, multiple employees could be all engaged in registerable activities within the UK under the arrangement. While I have already explained that the responsibility for registration would rest with the company in this example, and that that is necessary to avoid the burden of each individual employee being required to register separately, the effect of the new clause is to make it an offence to carry out an activity, or arrange for the activity to be carried out, pursuant to a registerable arrangement that has not been registered.

There are two main justifications for the offence. First, it will reduce the likelihood that activities pursuant to an unregistered arrangement with a specified person will be carried out, supporting the overall aims of the scheme. It makes it clear that all individuals have a role to play in ensuring that the requirements of the scheme have been complied with. Where there is doubt that an organisation or company has registered its arrangement with a specified person, it is a good outcome if its employees take necessary steps to clarify that their registerable activities are covered by registration.

--- Later in debate ---

[Mr Jones]

How does the Minister define “foreign power control”? What would be the evidential test? I have heard him argue, for example, that all Chinese companies are ultimately under the control of the Chinese Communist party. Is that the evidential test? Or to take the Russian example, would the evidential test be a company being owned by an oligarch who is close to Putin? Clearly, if the Chinese Communist party wants to control a Chinese company, it can. Would that be the threshold at which a company would be caught by the measures?

[Tom Tugendhat]

The right hon. Gentleman is right to ask. Control over an entity means 25% of a shareholding—that is one thing that we have already identified—or it could also be formal mechanisms within the company, including voting power or other forms of control. Some foreign powers enact legislation to oblige entities to comply with their security services or intelligence agencies—the right hon. Gentleman knows what I am referring to—giving them a right to exercise an element of control over those entities outside formal governance structures.

[Stewart Hosie]

Further to the point made by the right hon. Member for North Durham, the control criteria could be indirect control of more than quarter of the stock, indirect control of more than a quarter of the voting rights, or an indirect ability to appoint or remove an officer of the entity. That is dreadfully subjective. Unless the criteria are really nailed down, people could absolutely fall foul of the measures without knowing that they are being controlled in any way.

[Tom Tugendhat]

I do not think that is the case. The hon. Gentleman should realise that foreign control of any kind is under the general provision of the so-called ordinary provision, while the enhanced provision would be specifically identified, so individuals required to register under the enhanced provision would be aware that they are contracting within an organisation or entity that falls under it. All those contracting with a foreign entity will know that they have to register under the ordinary provision, so the legislation covers both cases.

[Mr Jones]

That does not clear things up for me. I have mentioned China. I am sure if I googled long enough I would find a speech that the Minister has given where he suggests that all Chinese companies are controlled by the Chinese Government, if they wish to have foreign influence. There is clear, direct evidence about doing business in Russia—it is not the law, but there is coercion regarding the individuals around Putin. If we are saying that the Chinese Communist party can control most companies, is the Minister saying that all those companies will have to register?

[Tom Tugendhat]

The right hon. Gentleman knows very well that what we express in private and what we say from the Dispatch Box cannot always be absolutely aligned. I am not going to identify every single Chinese company in one go. He knows that there are different elements of control. The Companies Act 2006 sets out the nature of those different elements.

[Mr Jones]

I am sure the Minister will get some China hawks on the Back Benches of the Conservative party arguing that all Chinese companies should have to be registered under the scheme. I think the measure needs some clarification before it goes any further. There are also certain individuals that the Minister’s party has taken money off who very clearly have connections with the Kremlin and who control companies in this country through front people; the ownership is actually individuals who we would not want to be associated with.

[Tom Tugendhat]

The right hon. Gentleman knows very well my own views on foreign influence on political parties. Sadly, we have seen such influence in all political parties, where parties or members of political parties have unwisely, sometimes rashly and often extremely foolishly, taken money off Chinese, Russian or other individuals. That is completely wrong and I know he and I share complete revulsion at it. I am very glad that we are sorting some of that situation out. It is a problem that the whole of the United Kingdom and many other political parties around the world have to face. We need to deal with it, and that is what the Bill is doing.

New clause 13 is the second aspect of the enhanced registration requirement. It will require the registration of activities to be carried out within the United Kingdom by a specified person. The first aspect of the enhanced measure, which we dealt with earlier, was the registration of arrangements with a specified person. Although arrangements are important, we recognise that activities within the United Kingdom will be carried out by the specified person themselves and not just those they direct. I should be clear: “specified person” in the context of the requirement can only be a specified entity subject to the foreign power control. I have already explained that foreign powers themselves are not required to register under the foreign influence registration scheme. We are therefore proposing that the specified entity subject to foreign power control, for example a company or organisation, be required to register its activities within the United Kingdom before they are carried out. An offence would be committed where the specified entity had failed to register its activity and it knew or ought reasonably to know that the activity in question was not registered.

To ensure that the requirement is practical and proportionate, the requirement to register is to be fulfilled by the entity and not its individual employees. Although we recognise that an employee is also capable of being directed by its employer to engage in the same registerable activities, we considered it disproportionate to require each individual to register in such a scenario. There would also be practical difficulties, not just in administration but also in consistency. If each individual employee were required to register the same activity, that increases the likelihood that the information provided is materially different and possibly even contradictory.

Finally, hon. Members may wonder why, compared with the requirement to register an arrangement, there is no 10-day period within which the registration must be made. The requirement to register an arrangement within such a period is necessary, as it may not be immediately clear that a person is acting at the direction of a specified person, as the person receiving the direction is separate to the specified person directing the activity. Where the specified person—the entity subject to foreign power control—is acting itself, it should already be clear and it is therefore enough that the registration takes place before the activities are carried out.

I want to finish my remarks by reiterating that if we did not include that requirement there would be a clear gap. A person who is separate from the specified entity, for example a different organisation, would be required to register an arrangement that involves being directed to act in the United Kingdom, but there would be no requirement for the specified entity itself to register its own activities. Leaving such a gap would not make sense in the context of countering state threats. I also want to stress again that we intend the use of the enhanced measure to be limited. It is there as an additional tool of assurance and its use will be subject to parliamentary approval through affirmative procedure. I ask the Committee to support the clauses.

[The Chair]

Before we move on to the debate, may I raise a matter to the Committee that has been brought to my attention? The 1922 Committee elections for Select Committees happen at 2 o’clock this afternoon, which is an obvious clash with the meeting of this Committee. I understand that it would be possible for the Minister to move an amendment to the sitting time this afternoon to 2.15, if he wished to do so. Any objection from any member of the Committee would of course make that fall. Before we enter a discussion—although I would rather not discuss it too long—would the Minister be prepared to move that the Committee should sit at 2.15?

[Tom Tugendhat]

I would be prepared to move that, if the Committee were supportive.

[Maria Eagle]

Would it be possible to extend the sitting by 15 minutes, so that no time is lost? If we were to do that, I would have no objection.

--- Later in debate ---

[Mr Jones]

My hon. Friend makes an interesting point. That is why I do not think the provision will be used in practice. That is the problem and, as I have said, I am never in favour of putting such provisions on the statute book. A more narrowly defined set of criteria applied to all countries would be better than the complicated system that we have here.

The other point is about transparency. Clearly, the public record for tier 1 will be there—it is published. Why the second tier should be done differently, I do not know. The information is going to get out anyway. It is not going to be a great surprise if a company is on this list. If I was running a company and was suddenly put on the register, I would not tell people that—I would not tell the investors and shareholders. I do not understand why the Government are treating the second tier differently from the first tier.

[Tom Tugendhat]

May I interrupt with a point of fact? Any company that is designated under the highest tier will be public by definition. That element will be public. It is the UK element that is having to register. The right hon. Gentleman gave an example of a completely spurious French company, which would of course never be on the enhanced list, as we are such good allies with the French. That company would be publicly declared. That is not the bit that is being kept out of the publication. It is the UK element registering it.

National Security Bill (Eleventh sitting)

Tom Tugendhat Excerpts

Committee stage
Thursday 8th September 2022 Public Bill Committees

[The Chair]

May I ask the Minister to respond?

[The Minister for Security (Tom Tugendhat)]

This is the first time that I have spoken on behalf of Her Majesty’s Government. It is an enormous privilege to be here. I realise that I enter this process—this lion’s den—at a moment when other lions have been through the Bill a few times before—there are an awful lot of Christians in this Committee and only one lion.

Before I say anything further, I pay enormous tribute to the Bill team, who have been phenomenal. The very fact that this has continued at all in such a professional way—

[Maria Eagle]

It hasn’t!

[Tom Tugendhat]

It has. That is because they have held it together and been a phenomenal asset to the Home Office. I am grateful to them.

On the various points that have been made, the hon. Member—

[Mr Jones]

Right honourable.

[Tom Tugendhat]

My apologies: the right hon. Gentleman. He is quite right. He asked some questions, as did the hon. Member for Garston and Halewood, or the right hon. Member for Garston and Halewood—

[Maria Eagle]

Right first time.

[Tom Tugendhat]

I will endeavour to find out what the reason is. You will understand, Ms Ali, that I was not appraised of this situation. I have spent rather a long time reading the Bill in the past 36 hours and not so much time asking about the movements of former Ministers.

On the point made by the right hon. Members for North Durham and for Dundee East about time, I will endeavour to do what I can to ensure that we have time available. Let us see how we go today. If time is needed, I will talk to the Whips team about it.

[The Chair]

The Minister has addressed the key points. I have nothing further to add in response to the point of order, so we will now begin our proceedings.

Clause 41

Variation of measures

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

[The Chair]

With this it will be convenient to consider the following:

Clauses 42 to 44 stand part.

That schedule 6 be the Sixth schedule to the Bill.

[Tom Tugendhat]

As the comparable sections in the terrorism prevention and investigation measures legislation make clear, clauses 41 to 44 are technical elements that improve the regime and make it work in practice. Clause 41 mirrors TPIMs by making provision for the measures imposed to be varied while they are in force. That will allow changes to be made to the restrictions where necessary, in response to changes in the individual’s personal or family circumstances or to the assessment of the risk they pose. Those provisions will be important in ensuring that the regime is able to respond dynamically and flexibly to changing circumstances, and that the individual is able to live as normal a life as is possible without posing a threat to the British people.

The provisions will also be important to securing the effective operational management of state threats prevention and investigation measures. Critically, the underlying requirement that the measures imposed must always be necessary and proportionate remains, and that is explicitly the case for any variation that has the effect of strengthening the measures imposed.

[Holly Lynch (Halifax) (Lab)]

It is a pleasure to serve under you as Chair once again, Ms Ali. They say a week is a long time in politics: never has that been truer than this week. I am very pleased to see the Minister in his place, but—for the second time over the course of this Committee—not quite as pleased as the hon. Member for North Cornwall that he once again has a Minister in place. I welcome the Minister to his role; as others have said, he is the fourth Minister we have had over the course of this Bill. We welcome the opportunity to continue to work together, now that we can make some vital progress on this really important piece of legislation. I also look forward to working with him on this policy area beyond just the legislation that is in front of us.

Turning to the detail of this group of clauses, clause 41 makes provision for the measures imposed under a part 2 notice to be varied in a number of different circumstances, as the Minister has outlined. Subsection (2) makes it possible for the Secretary of State to vary a relocation measure in a part 2 notice if considered necessary

“for reasons connected with the efficient and effective use of resources in relation to the individual”.

We are satisfied with those measures, and recognise the necessity of the remaining provisions in the clause.

Clause 42 provides a power for the Secretary of State to revoke a part 2 notice at any time by serving a revocation notice, whether or not in response to a request by the individual. The Secretary of State may exercise that power where they consider it is no longer necessary for the part 2 notice and the measures imposed under it to remain in force. The explanatory notes say that

“although the measures may no longer be necessary at the time that the Part 2 notice is revoked (for example because the individual has been detained in prison), they may subsequently become necessary again (when the same individual is released from prison, perhaps following an unsuccessful prosecution for a criminal offence).”

As I have said before, the assumed prosecution rate for state threats in the Home Office impact assessment is just 33%, so I am concerned that we might need that level of flexibility, depending on the circumstances.

Subsection (6)(a) of the clause also provides a power for the Secretary of State to revive for a period of a year a notice that has previously expired without being extended, without the need for evidence of new state threat activity. Surely if a person continues to be a threat, the notice should not be allowed to expire; alternatively, if the notice has been allowed to expire because the person is no longer deemed a threat, reviving a notice without any new information surely could not be justified. On that basis, I would be keen to hear any further rationale for the provisions in subsection (6)(a).

When considering the revocation of part 2 notices, it is also worth considering what Jonathan Hall QC described as the “TPIM Catch-22” in his annual report on the terrorism equivalent of these part 2 measures:

“On the one hand, in order to test whether an individual would revert to terrorism-related activity in the absence of TPIM measures, there may be no alternative but to reduce or remove measures; for example, by allowing an individual to associate or move more freely.

“On the other hand, association and movement measures have been imposed precisely to counter the risk of terrorist-related activity. In the absence of evidence of risk reduction, to do so might put members of the public at risk of harm.”

It is not easy to step down from STPIMs once they have been imposed and there is a clock ticking on the restrictions imposed on a suspect, so what efforts are we making to establish best practice on this, so that clauses 41 and 42 can be deployed as effectively as possible?

Clauses 43 and 44, also in this group, make provision for circumstances in which a part 2 notice is “quashed” or directed to be revoked as a result of court proceedings, and schedule 6 rightly provides other circumstances in which an individual who is convicted of an offence under clause 50 has a right of appeal against that conviction.

Other than the points we have raised, we are satisfied that these measures strike an appropriate balance.

--- Later in debate ---

[Tom Tugendhat]

Let me answer some of the questions that have just come up. The hon. Member for Halifax and the right hon. Member for East Dunbartonshire, if I am correct—

[Stewart Hosie]

Dundee East.

[Tom Tugendhat]

Forgive me; the right hon. Member for Dundee East. They have raised some interesting points. The first is on the notice to be revived without new evidence of a lapse. The reason for that variation is to allow for prison sentencing. Should an individual find themselves being sentenced for a crime in the middle of an STPIM, that allows the STPIM to be paused for the purpose of imprisonment and revived afterwards, without having to go through the whole process again. The purpose is practical, rather than that of having a massive legal effect. Therefore, I believe it is entirely proportionate with the requirements of security.

[Stewart Hosie]

That seems a slightly illogical formulation. If the prison sentence is substantially longer than the maximum the STPIM could provide for, it seems preposterous that the remainder of the STPIM’s time would be added to the end of a sentence once it was fully discharged. That does not appear to be fully thought through.

--- Later in debate ---

[Tom Tugendhat]

Perhaps the hon. Member will appreciate that not everybody who spends time in prison will do so for the offence for which the STPIM might have been applied. It is perfectly possible that somebody might spend six months in prison for something completely unconnected—a driving offence, a minor theft, or whatever—and therefore a pause would be entirely in keeping with that. The STPIM is about controlling different people’s ability to move and communicate, in which circumstances prison would simply not be a relevant application because the prison sentence effectively supersedes the controls that would have been put in place. In that sense, it is merely a way of recognising that, in certain circumstances, different applications would apply.

Clause 39 requires police to keep under review criminal investigations. STPIMs are a civil measure to protect against national security threats when a criminal prosecution is not possible. They are not overlapping; they are compatible and, indeed, complementary.

Question put and agreed to.

Clause 41 accordingly ordered to stand part of the Bill.

Clauses 42 to 44 ordered to stand part of the Bill.

Schedule 6 agreed to.

Clause 45

Appeals

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

[Tom Tugendhat]

The clause set out the rights of appeal of a person subject to an STPIM notice and the function of the court on considering such an appeal. Those rights of appeal are in addition to the automatic review of each case and ensure that the individual subject to a notice is able to appeal against all relevant decisions taken by the Secretary of State using the powers contained in the Bill—for example, to extend or revive a notice, to vary the measures or to refuse an application for measures to be varied.

In determining an appeal brought under the clause, the court must apply judicial review principles. That is a particularly intense level of scrutiny and will ensure that the Secretary of State’s decisions are subject to independent consideration. Clause 45 makes clear the powers of the court on considering an appeal, which include to quash the extension or revival of the notice or the measures within, or to give directions to the Secretary of State for the revocation of the notice or in relation to the variation of the measures specified in the notice. As I have said already, a key feature of the Bill is the extensive and multi-layered approach to judicial oversight, which will ensure that the courts can be involved at every stage of the process, and that every decision of the Secretary of State can be reviewed by the judiciary and can be overturned if the court so decides.

To recap, there is an initial permission stage before measures are imposed. There is then the automatic full review of the decision to impose measures, and there are the extensive rights of appeal contained in the clause. Taken together, those provide important safeguards.

--- Later in debate ---

[Mr Jones]

I warmly welcome the Minister to his position. He and I go back a long way: when I was a Minister in the Ministry of Defence, he was a bright, fresh young officer, and I think we both have fond memories of our time working together. One of the dangers he faces is being appointed to a position that he knows a lot about. That is always a downer for any Minister and strikes fear into the civil service. I wish him well, and he will do a good job.

Throughout the entire Bill, there should be an ability for the individual to have recourse to appeal. That is not because I am somehow soft on terrorism or on the individuals we are dealing with. It is because we must have a system whereby, when the state takes hard measures to limit someone’s freedom, they need the counterbalance of the ability to appeal. That is why I welcome the measures. My problem with the Bill is that, although this measure is present in this part of the Bill, there are no safeguards in other parts of the Bill. Those types of appeal mechanisms balance state power and the individual.

I have two specific points on the process, which I support. How will the appeals be done in the court? Some of the information that the Secretary of State will rely on will be highly classified, so how will the process work? It will mean the disclosure of some information that we would not want disclosed in open court. I shall not rehearse the arguments on part 3, but it is clear that, if part 3 is retained, the individual will not have recourse to legal aid for an appeal. I am opposed to that. That is not because I am on the side of individuals who wish us harm, but we must ensure that we have a system that is robust in ensuring that justice is done, and people must not be arbitrarily detained or subject to those restrictions if they clearly have legitimate arguments against what the state is trying to apply.

[Tom Tugendhat]

Before I come to the right hon. Member for Dundee East’s words, I will just address the very generous tribute from the right hon. Member for North Durham. I remember that I used to call him sir; he never called me sir, and he still will not. I do not feel special in that; I do not think he has ever called anyone sir in his life. It was very kind of him.

On the question raised by the right hon. Member for Dundee East, clause 38 means that there has to be a review wherever a STPIM notice is imposed, which is in clause 35. The individual can attend the automatic review. I will come on to that element, because as the right hon. Member for North Durham rightly says, there is likely to be material that is extremely sensitive. That is why the procedure relates to what is already established with special advocates. The right hon. Member knows much more about Special Immigration Appeals Commission hearings, and the various ways in which advocates can have access to information that is relevant to a court but is not then shared with somebody for whom that would not be conducive. That is the way that the proceedings will work, and I think that provides the right balance between disclosure, justice and protection.

Question put and agreed to.

Clause 45 accordingly ordered to stand part of the Bill.

Clause 46

Jurisdiction in relation to decisions under this part

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

[Tom Tugendhat]

Members will be pleased that this is very brief. Clause 46 makes an important but largely technical provision. The purpose is to provide absolute clarity that the High Court is the appropriate forum for judicial proceedings arising from decisions relation to STPIMs, or in Scotland, the Outer House of the Court of Session. That is important given that such proceedings may rely on closed material, which we will come on to next.

Question put and agreed to.

Clause 46 accordingly ordered to stand part of the Bill.

Clause 47

Proceedings relating to measures

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

[The Chair]

With this it will be convenient to consider that schedule 7 be the Seventh schedule to the Bill.

[Tom Tugendhat]

Clause 47, and schedule 7, to which the clause gives effect, make further provision for court proceedings in relation to decisions taken under the Bill. I will spend slightly longer on those measures, given the important issue raised by some of the key aspects of those provisions.

Subsection (1) makes clear that an appeal against a court decision in STPIM proceedings may only be brought on a point of law. That limitation is appropriate. The court of first instance has the expertise in fact finding for national security determinations. It has developed expertise and a body of knowledge in an experienced judiciary who hear national security cases. That means it is right that the court of first instance, which has significant expertise, has the final determination on points of fact.

In such cases, it is therefore right to limit the right of appeal to a point of law, as higher courts will not have available the national security information or expertise to make a fair determination on the facts. The approach is reflected from the provisions in the Terrorism Prevention and Investigation Measures Act 2011, and the Special Immigration Appeals Commission.

Schedule 7 makes further provision relating to court proceedings under the Bill, including, in particular, powers to make rules of court about various matters. Critically for the operation of the scheme, the rules will make provision that court proceedings in relation to STPIMs will operate with both open and closed elements given the sensitivity of the evidence that will be a key component of why an individual cannot be prosecuted and why the use of a STPIM is necessary. It would fundamentally undermine the scheme if closed proceedings, where sensitive intelligence and national security arguments can be made, were not available. The individual, and his or her chosen legal representatives, can be present at the open hearings, and see all the material used in those hearings, but they cannot be present at the closed part of the proceedings or see the closed material.

--- Later in debate ---

[Mr Jones]

I think the Minister has explained that. I take the point made by the right hon. Member for Dundee East, but as I said earlier on, I think the rules are a sensible safeguard in terms of what we need. Frankly, with no access to legal aid they are for the birds, because no one will be able to use them. We will come on to that debate later.

I want to ask the Minister about the issue of juveniles, which is an increasing problem for our security services. For example, the “Extreme Right-Wing Terrorism” report that we just produced in the Intelligence and Security Committee found that, increasingly, those individuals are young people—some as young as 15. If we are going to apply the rules in some possible circumstances to those individuals, what are the protections for them? If the Minister does not know the answer, I am quite happy for him to write to explain the situation. We are perhaps fixated on thinking that this is about Islamic terrorists and grown-ups, but certainly according to the ISC report, very sadly, in many cases those who are now coming before the courts are minors.

[Tom Tugendhat]

Let me quickly answer the question on who is the appropriate advocate. That is somebody appointed by the Attorney General under schedule 7(10)(1). The person has to be an appropriate law officer, so a barrister or a solicitor. That is how it is determined.

On the question of genuine national security, I understand the point made by the right hon. Member for Dundee East. He will understand that this is a matter of concern for many of us who are devoted, as he knows I am, to the application of the rule of law and the access to justice that this country and many countries in Europe have secured over the past century. That is vital to the provision and protection of liberty in our country. I appreciate his point and the right to a fair trial is essential.

However, it is simply the reality of life in our world that sometimes we need to frame that justice within certain provisions to allow it to be real, and not to be silenced by the inability to bring together evidence that would otherwise protect British people. That means that we have to find ways of balancing it. That is why these court proceedings, which are less than ideal and not the ones that we would like to see, are sadly necessary because of the security restrictions that apply.

On the point made by the right hon. Member for North Durham, he knows that I spent some time in the past few decades hunting people who sought to do our country harm, and he is absolutely right. Sadly, it was not always the people who we see on the various TV shows. Very often, it was people who came at it from a very different angle. I therefore appreciate his point; I will look into it and come back to him.

Question put and agreed to.

Clause 47 accordingly ordered to stand part of the Bill.

Schedule 7 agreed to.

Clause 48

Reports on exercise of powers under this part

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

[The Chair]

With this it will be convenient to discuss the following:

Clause 49 stand part.

New clause 2—Reviews of Parts 1, 3 and 4

“(1) The operation of Parts 1, 3 and 4 of this Act must be reviewed by a person, or people, appointed by the Secretary of State.

(2) The operation of Part 3 must be reviewed by the person appointed by the Secretary of State under section 36(1) of the Terrorism Act 2006.

(3) The operation of Parts 1 and 4 must be reviewed by either—

(a) the person appointed by the Secretary of State under section 36(1) of the Terrorism Act 2006, or

(b) a different person appointed by the Secretary of State.

(4) Reviews under this section must be carried out in respect of—

(a) the 12-month period beginning with the day on which any section in this Part comes into force, and

(b) each subsequent 12-month period.

(5) Each review under subsection (1) must be completed as soon as reasonably practicable after the period to which it relates.

(6) The person or people mentioned in subsections (2) and (3) must send to the Secretary of State a report on the outcome of each review carried out under subsection (1) as soon as reasonably practicable after completion of the review.

(7) On receiving a report under subsection (6), the Secretary of State must lay a copy of it before Parliament.

(8) Section 36(6) of the Terrorism Act 2006 shall be read such that the ‘expenses’ and ‘allowances’ mentioned therein may include the discharge by the person or people of their functions under this section.”

[Tom Tugendhat]

Clause 48 requires the Secretary of State to report to Parliament every quarter on the exercise of her powers under this part of the Bill. The Committee will recognise the parallel to similar measures in the TPIM Act 2011. Although details of the operation of the system and of particular cases will necessarily be sensitive and cannot be disclosed publicly, the clause acts as an additional safeguard by welcoming public scrutiny of the use of the regime and powers, and offers reassurance that crucial information about the operation of the regime will be public and kept up to date. Crucially, that information will include the extent of the Secretary of State’s use of her powers and the number of cases in which measures are imposed. It will also include details of court judgments handed down in the relevant period that relate to the use of those powers.

Clause 49 requires the Secretary of State to appoint an independent reviewer to review the operation of part 2 annually. First, the reviewer is required to undertake a review of the operation of the STPIM regime as soon as is reasonably practical at the end of each year, and a report on the outcome of the review must be sent to the Secretary of State as soon as is reasonably practical after the review has been completed. Then, the Secretary of State is obliged to lay the report before Parliament. That replicates the approach in TPIMs, for which the annual reports have been an effective way of examining the Government’s use of their powers.

The independence of the Independent Reviewer of Terrorism Legislation, combined with their unrestricted access to Government papers and intelligence, has led to real insight and informed reports that have aided the functioning and development of the TPIM regime. Using the same approach for STPIMs will ensure similarly robust scrutiny. Omitting the clause would undermine the level of oversight and transparency of the regime. I hope the Committee agrees that the provision is important for the effective operation of STPIMs.

New clause 2, tabled by the hon. Member for Halifax, proposes commitments to review annually the operations of parts 1, 3 and 4 of the Bill. I thank the hon. Lady for tabling the new clause and I understand the intention behind it. Appropriate oversight of national security functions—particularly the use of intrusive powers—is important. A range of oversight mechanisms are in operation and govern both the UK’s intelligence agencies and the police, which are the primary bodies that will utilise the new powers in the Bill.

As I have just mentioned in addressing clause 49, the Government have made a commitment to an independent reviewer of part 2 of the Bill. Although there may well be merit in extending oversight of the legislation beyond part 2, careful consideration must be given to how that is done. In some cases, it could create an undesired overlap of duplication of responsibility. The Committee discussed that earlier—a little bit before my time—in the context of the hon. Lady’s proposal for an independent body to monitor disinformation. There are further examples of potential duplication, such as the powers in clause 22, which are already the responsibility of the Investigatory Powers Commissioner.

The new clause also proposes that part 3 of the Bill be reviewed by the Independent Reviewer of Terrorism Legislation. As the Committee knows, part 3 contains measures to freeze civil damages awarded to claimants who are seen as representing a real risk of using their award to fund acts of terror, and measures to restrict access to civil legal aid for convicted terrorists. As a result, it is already in the remit of the Independent Reviewer of Terrorism Legislation to review those measures. An explicit commitment to oversight of part 3 of the Bill is therefore unnecessary and would duplicate the existing discretion of the Independent Reviewer of Terrorism Legislation to review and report on terrorism-related legislation.

With those points in mind, the Government cannot accept new clause 2 at this stage. Although I fully appreciate the purpose behind the new clause, I ask the hon. Lady to withdraw it for now. The Government take oversight of the Bill seriously, and we will consider the best way to approach it. I will be in touch with her about that.

[Holly Lynch]

I am grateful for the way the Minister has approached the new clause. I accept entirely the volume of work he has had to do in the past 24 to 36 hours.

We feel quite strongly about some of the proposals we are advocating for in new clause 2. There is an acceptance of the real value of the work undertaken by the independent reviewers right across the agencies that work with this type of legislation. We think we are largely doing the Government a favour in putting these proposals forward.

--- Later in debate ---

[Mr Jones]

The amendment from my hon. Friend the Member for Halifax is, as I said earlier, part of a broader piece about ensuring that we get the balance right between giving our security services, agencies and people the powers that I personally support, and providing proper scrutiny for the individual and for the operation of the Bill. That is the thing that has been missing from the Bill. Knowing Sir Brian Leveson, the Investigatory Powers Commissioner, I know that system works well in terms of warrantry and so on. If we are going to give powers to our agencies to do their job rightly, we have to ensure that they are robust and reviewed as things change.

I know the Minister is only a day or a bit into his job, so he might not be able to accept an amendment today, but I think this aspect needs to be looked at throughout the Bill. It was certainly raised with his predecessor, though I cannot remember if it was his immediate predecessor or the one before that.

My other point is to do with this issue of laying before Parliament. I support that, but the report will be very anodyne in terms of what it can provide in public, so I might look to the Intelligence and Security Committee. I am not looking for work for that Committee, but it has the ability to access material that cannot, for obvious reasons, be put in the public domain. The Minister will soon learn about the battles going on at the moment with parts of the Cabinet Office, Home Office and various other agencies about our role and access to material. We already get, for example, the independent commissioner’s report, but we have an ongoing row about our access to the annex, which we had in the past but for some reason are now not allowed to have. Given the role of Parliament and for its reassurance, will the Minister consider the ISC having access to the information that cannot be put in the public domain? That would be helpful. I accept that some people think the ISC just agrees with everything the agencies do, but it is another review body that can give assurance to the public and Parliament that the powers are proportionate.

We know that once we implement the Bill, we will learn and powers will change. I am not against Brian Leveson, the independent tribunals and the Investigatory Powers Commissioner—they do a fantastic job. They have helpfully pointed to some of the lessons that need to be learned, for example, from the terrorist attacks in London and Manchester. The ability of parliamentarians at least to ask the questions and have access to the information that cannot be put in the public domain would be an added layer of scrutiny, allowing the public to know at least that we have a full spectrum to ensure that such things are done proportionately and are working effectively.

[Tom Tugendhat]

I thank hon. Members for the tone of this discussion. I appreciate that scrutiny is important. This is about protecting not just the rights of individuals, but the agencies that are carrying out such important work on our behalf. Their heroism and courage on operations need to be protected, so that the agencies are not later found in legal difficulty in areas where they have acted not only with integrity but with enormous courage. I therefore appreciate the tone.

Briefly, I will touch on the question of scrutiny and laying before the House. I will make an absolute commitment to bring forward reports as soon as possible. I appreciate that there have been a few issues of late, which may have delayed things. I assure the hon. Member for Halifax that I will do my best to ensure that those timelines are reduced and are as sharp as possible. I absolutely appreciate her point. The issue of being laid before both Houses is made absolutely clear in the publication.

To touch on the question of who the commissioner might be, that has not been resolved as yet. I appreciate the hon. Lady’s point and there is merit on both sides of the argument, but either way, there is huge merit in ensuring that whoever is doing TPIMs has a very close connection with whomever is doing STPIMs. Whether that is a newly appointed individual or the extension of a role, I am happy to ensure that they work closely together.

[Holly Lynch]

We have been probing that during the passage of the Bill. Because that role is so crucial to the oversight that needs to follow the rest of the provisions in the legislation, can the Minister, as an absolute minimum, confirm that that person will be in post and that that issue will have been resolved by the time the Bill is enacted, so that that is not an ongoing question that starts to run into the legislation being enacted?

[Tom Tugendhat]

The hon. Member will be aware that I have been in post for only a few hours, so I will be cautious about making commitments that I cannot keep, but I can assure her that I will do my absolute damnedest to make sure that they are in post, because I can see exactly the point that she makes and I appreciate it. As I say, this is about protecting the rights not just of those who are subject to the provisions but of those carrying out the protection of our state and our nation.

Question put and agreed to.

Clause 48 accordingly ordered to stand part of the Bill.

Clause 49 ordered to stand part of the Bill.

Clause 50

Offence

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

[Tom Tugendhat]

The clause provides for a criminal offence of breaching a measure specified in a part 2 notice without reasonable excuse. This echoes, as do many of the provisions, a similar provision in the TPIM regime, and includes cases in which a person has permission from the Secretary of State to contravene a measure and does not adhere to the terms or conditions of that permission. For the sake of enforceability, it is vital that a part 2 notice is reinforced with effective penalties if the subject does not comply. Hence the maximum penalty on conviction is a custodial sentence not exceeding five years, unless the travel measure is breached, in which case the maximum sentence is 10 years.

[Holly Lynch]

The clause provides for an offence of contravening without reasonable excuse any measure specified in a part 2 notice. That, again, mirrors section 23 of the Terrorism Prevention and Investigation Measures Act 2011. According to the Government’s most recent transparency report, in December 2020 the total number of individuals who had been served a notice since TPIMs were introduced in 2011 was 24, so compliance is relatively high. But so are the stakes when someone breaches the terms of such measures.

According to the “Statistics on the operation of police powers under the Terrorism Act 2000 and subsequent legislation” quarterly report from the Home Office, the number of people who have been prosecuted and convicted under section 23 of the TPIM Act, meaning that they contravened an order, is 10. Like TPIMs, the primary function of STPIMs is to be able to control and monitor those who represent a serious threat to our national security but cannot yet be prosecuted. We have been assured that the primary function of an STPIM is to be able to manage a person while an investigation into a part 1 offence is established, rather than simply creating a situation where a prosecutable breach is highly likely.

We note the particular focus on travel in clause 50, and that under subsection (2) an individual who travels without permission loses any reasonable excuse defence. Given that we anticipate that there might be a higher number of foreign nationals and dual nationals in this cohort due to the state threat nature of the offences, it is possible that we might have higher numbers of requests to attend overseas births and deaths of family members and loved ones among the cohort. However, the risk of permitting that travel, which might mean a return to a very hostile state that we fear is sponsoring the individual’s activity, presents a massive challenge. To ensure there are robust decision-making processes around those considerations and to have good reporting and a review of those elements of the clause would be welcome additions.

[Stewart Hosie]

As the Minister said, the clause creates a criminal offence of contravening without a reasonable excuse a measure in a part 2 notice, but there is no defence of reasonable excuse if the subject leaves the UK when they are restricted from doing so. In normal circumstances, a breach of a part 2 notice would leave the individual subject to five years’ imprisonment on indictment, or 12 months’ imprisonment on a summary conviction in Scotland, but that becomes nine years’ imprisonment on indictment for a breach of a travel measure.

I wish simply to get to the bottom of why some of the breaches of a part 2 notice appear to be disproportionately harsh. The Minister said that much of this provision mirrors the provisions of TPIMs; does this bit—the doubling of the tariff for a breach of a travel measure—mirror the TPIMs provisions? If it does, how often was such a penalty imposed for such a breach under the existing provisions?

[Tom Tugendhat]

It is quite clear that any order given must have consequences if it is disobeyed—I do not think anyone in this room would disagree with that—and it is important that the penalties for disobedience against a lawfully given order must be proportionate. The penalties are proportionate, and it is normal to have an increased penalty for an aggravated offence, whatever that may be. In the circumstances, travelling abroad would be considered an aggravation and therefore have a greater penalty attached. That is entirely appropriate, so it is entirely reasonable to have that increased sentence.

Question put and agreed to.

Clause 50 accordingly ordered to stand part of the Bill.

Clause 51

Powers of entry etc

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

[The Chair]

With this it will be convenient to consider that schedule 8 be the Eighth schedule to the Bill.

[Tom Tugendhat]

The clause gives effect to schedule 8, which provides the police with powers of search, entry, seizure and retention in a number of scenarios relating to STPIMs. For the sake of ease, I will cover the clause and the schedule together.

Before I go into the detail of the clause, I remind the Committee that STPIMs will be a tool of last resort. The Government will use every other tool at our disposal before resorting to such significant measures. Again, I remind the Committee that these measures mirror those in the TPIMs regime.

In order to effectively enforce the regime and check an individual is complying with the measures under their STPIM, the police will have the powers they need to enter premises, conduct necessary searches and seize and retain items as necessary. They will also be able to arrest the individual for a “breach of” offence if they fail to grant police access.

Schedule 8 provides powers to the police to enter and search premises without a warrant to locate an individual for the purpose of serving an STPIM notice or another specified notice on them; to search an individual or premises when serving an STPIM notice for the purpose of discovering anything that might breach any measures specified in the STPIM notice; to search premises on suspicion that an individual subject to an STPIM notice has absconded; and to search an individual subject to an STPIM notice for public safety purposes. It provides a power to police with a warrant to search an individual or premises to determine whether an individual is complying with the measures specified in the STPIM notice. There are also powers for a constable to seize and retain items found in the course of such searches.

I remind the Committee that the STPIM itself is kept under review and requires a court’s permission to impose the measure. That means that a court will have already agreed with the assessment of the Secretary of State that the individual meets the meet five conditions in clause 33, which the Committee has already agreed to. That means it is proportionate in terms of a national security determination for the police to be able to undertake the aforementioned activities without a warrant. The powers will be essential to managing and enforcing the measures imposed under STPIMs and, importantly, they provide the right balance between effective powers and safeguards for the rights of the individual.

[Holly Lynch]

I have a couple of queries on schedule 8, which provides powers of entry, search, seizure and retention in a number of scenarios relating to part 2 notices.

I have queried the use of the word “constable” in legislation before, but it seems to be standard. Paragraph 9(9) states:

“The warrant may be executed by any constable.”

Previous schedules specify certain ranks and specialisms, such as counter-terrorism officers, to undertake such duties. Are we satisfied that further stipulations on who may execute a warrant are not required?

Sub-paragraph (10) states that a warrant issued by a court to search the individual, the individual’s place of residence, or other premises specified by the warrant, expires after 28 days. That period feels a bit odd to me. We want officers to have the flexibility they need, but I cannot imagine a scenario in which they have grounds to apply for a warrant but then take more than 20 days after it is issued to execute it. I am grateful to counter-terrorism police for sharing a bit more about their operations and how these warrants are used, which has provided some reassurance on this front, but will the Minister confirm that a warrant cannot be executed more than once in the 28-day period?

[Stewart Hosie]

Clause 51 applies schedule 8, which makes provision about various powers of entry, search, seizure and retention—to enter and search premises for the purpose of personally serving, to search for items that breach the notice, and to search when there is a suspicion of absconding. A warrant is required to search people or premises for the purposes of determining whether an individual is complying with the measures specified in the notice, and the warrant is to be granted only if necessary.

However, some of the powers in paragraph 10 appear to be rather broad, allowing a person to be searched without a warrant to see whether they might be

“in possession of anything that could be used to threaten or harm any person”.

I am not quite sure what that means. Unlike in the case of other warrantless powers, there is no requirement even for suspicion that someone is likely to threaten or cause harm. What is the justification or the reason for that?

Paragraphs 11 and 12 contain very strong powers to retain certain items which are seized, with no time limit other than

“as long as is necessary in all the circumstances.”

There follows a non-exhaustive example of what could represent necessity, but necessary for what? Is there provision for a person to challenge the ongoing retention of property seized by police under these powers? Is there a model for this drafting that has been used elsewhere? If there is, and if a piece warrantless search and retention legislation exists, how frequently is such a measure used?

[Tom Tugendhat]

The hon. Member for Halifax asked about the use of the term “constable”. It is standard, and she will realise that mostly it will be counter-terrorist police who lead on STPIMs, and who the most appropriate person is will be reviewed by the operational commander. The use of the term “constable” and the equivalent ranks in other forces and relevant services is standard for these purposes.

The provision on when a warrant may be executed is operationally beneficial to those who may have reason to delay or have to wait for a window to open when action can be taken. I will not go into the potential operational requirements on any element, but clearly they will vary: in some circumstances, it will be appropriate to act immediately; in others, it may be necessary to wait.

The provision on retention for

“as long as is necessary”

is also standard, including in the Police and Criminal Evidence Act 1984. The Bill also contains provisions allowing people to apply to have property returned.

Question put and agreed to.

Clause 51 accordingly ordered to stand part of the Bill.

Schedule 8 agreed to.

Clause 52

Fingerprints and samples

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

[The Chair]

With this it will be convenient to discuss that schedule 9 be the Ninth schedule to the Bill.

[Tom Tugendhat]

The clause will give effect to schedule 9, which makes provision for the taking and retention of biometric material from individuals subject to a part 2 notice. I will cover the clause with the schedule.

The biometric data retention provisions relating to state threats prevention and investigation measures are in line with those existing elsewhere in the statute book, including in TPIMs, which have been well established for more than 10 years. The schedule makes separate provisions for taking the fingerprints and samples of an individual subject to a specified prevention and investigation measure in England, Wales and Northern Ireland to that of Scotland. That ensures that provisions are in line with different police procedures and legislation.

constable may take biometric data, which could include physical data, from an individual subject to a part 2 notice. The individual will be informed of the reason for the fingerprints or sample being taken. Police can require an individual to attend a police station for the purpose of providing biometric data, and that material may be checked against other such material held under a variety of other powers. The schedule requires the destruction of relevant material, including fingerprints, DNA profiles or relevant physical data, unless there is a power to retain, which I shall come to.

The purpose of the provisions is to ensure the right balance between the protection of the public and individual civil liberties. Under paragraph (11), any samples taken from the individual must be destroyed as soon as a DNA profile has been derived from that sample or, if sooner, within six months of taking the sample. Paragraphs (8) and (9) contain powers to retain biometric data. Where there is no relevant previous conviction, fingerprints, DNA profiles and physical data may be retained for six months after the end of the relevant part 2 notice being in force.

Under paragraph (9), a national security determination can be made by a chief officer of police, enabling the police to retain for up to five years data relating to an individual who may pose an enduring national security threat. All national security determinations that can be reviewed must be reviewed by the biometrics commissioner, who has continued oversight of the retention and use of such data.

We recognise the importance of safeguarding individuals’ right to privacy, so paragraph (12) sets out the limitation of uses for any retained material taken from a person subject to a part 2 notice, which are in the interests of national security, for the purposes of investigation foreign power threat activity, for the purposes of a terrorism investigation, for the detection and prevention of crime, or in the interests of identification only.

[Holly Lynch]

I listened intently to the Minister. Schedule 9 makes provision for the taking and retention of fingerprints and non-intimate samples from individuals subject to a part 2 notice. Schedule 9, like schedule 3, is subject to several Government amendments. As the explanatory notes explain, fingerprints and non-intimate samples have the same meaning as that given in section 65 of PACE 1984. I would be grateful to the Minister for some clarity on that, which he may need to provide in writing. There is a lot going on in relation to biometrics in different parts of the Bill.

Paragraphs (6) to (11) make provision relating to the destruction and retention of material taken from individuals subject to a part 2 notice. The explanatory notes say that where an individual has no relevant previous convictions, fingerprints and DNA profiles may be kept for only six months after the part 2 notice ceases to be in force. Paragraph (11) goes on to state that, as provided in the Protection of Freedoms Act 2012, material taken under PACE, for example, or that is subject to the Terrorism Act 2000 or the Counter-Terrorism Act 2008, need not be destroyed if a chief office of police determines that it is necessary to retain that material for purposes of national security. Given that we are dealing almost exclusively with matters of national security in schedule 9, can we assume that the majority of biometric evidence taken from individuals subject to part 2 notices may be held indefinitely under this provision?

I am reliably informed that the biometric retention provisions in the Bill are designed to bring the powers into line with similar provisions in terrorism legislation. Schedule 9(8) deals with the retention of biometrics collected in the course of the service of a part 2 notice under the STPIM provisions. That provides us with a retention of six months prior to a national security determination being made, and is therefore in line with the provision under schedule 6 of the Terrorism Prevention and Investigation Measures Act 2011.

A separate provision for the retention of biometrics can be found in paragraph 22 of schedule 3. It provides for a retention period of three years for those detained under schedule 4 provisions, in line with biometrics collected under section 41 of the Terrorism Act 2000 and section 41 of the Counter-Terrorism Act 2008, which qualify terrorism offences.

Beyond the initial retention period, both provisions are capable of retention by way of a national security determination process. I have lost track—I do not know whether other Members have—of whether we are keeping biometrics for an initial six months, as schedule 9 seems to outline, or for three years, which is the case elsewhere in the Bill. I suspect the Minister is unable offer absolute clarity right now—although I have no doubt that the civil servants think it is absolutely crystal clear—but I would be grateful if he could outline, perhaps in writing, the rationale for the different provisions.

Government amendment 32 specifies that the chief constables of the Ministry of Defence police and the British Transport police, and the director general of the National Crime Agency, are added to paragraph 9(4) of schedule 9. The responsibilities of the Civil Nuclear Constabulary are different from those of other forces, but is the Minister certain that it does not need to be added to the list?

[Stewart Hosie]

I am aware that similar provisions were debated in relation to schedule 3, and concerns were raised then that the provisions may end up allowing the indefinite retention of the material of people who have accepted cautions—indeed, even youth cautions—meaning that they were never charged, never mind convicted. The Minister has not provided much of a justification for that, other than that he wants the legislation to mirror the provision in other Acts. He used the same argument in his introductory remarks.

That is not enough. Provisions on the ability to retain material indefinitely on whatever grounds must be justified in their own terms in this legislation. I know that the Minister is new to the job, so if he cannot do that now, he can write with that explanation, as the hon. Member for Halifax said. Notwithstanding the fact that we all want the maximum powers necessary to tackle the state threat and the terrorist threat, if his explanation is not compelling or convincing, the provisions will need to be revisited at a later stage.

[Tom Tugendhat]

I do appreciate that elements are being raised about which I will write to various Committee members, and I will follow up on areas that I have not covered in detail.

Although the operational use of biometrics remains the same across provisions, we are taking a different approach to the powers provided under STPIMs and the powers in schedule 3. That ensures the right balance and proportionality in tackling foreign state threat activity while protecting individuals’ right to privacy. Although there is the option to make a national security determination under both regimes, under our police powers the initial retention period is longer than for STPIMs to reflect the seriousness of an arrest made for suspected involvement in foreign power threat activity.

Following arrest for involvement in foreign power threat activity, an individual’s biometric data may be retained for three years, with the option of extending that, irrespective of whether there is no further action, or whether they are charged or acquitted. Certain national security offences under this Bill will be added to the list of qualifying offences in PACE to reflect the seriousness of the offence that justifies longer retention periods.

Question put and agreed to.

Clause 52 accordingly ordered to stand part of the Bill.

Schedule 9

Fingerprints and samples

Amendments made: 25, in schedule 9, page 133, line 1, leave out paragraph (f).

This amendment removes paragraph (f) from a list of provisions under which fingerprints, data and other samples may be taken. Paragraph (f) is not needed because its contents are already covered by paragraph (g).

Amendment 26, in schedule 9, page 133, line 9, at end insert—

“(ia) any of the fingerprints, data or samples obtained under paragraph 1 or 4 of Schedule 6 to the Terrorism Prevention and Investigation Measures Act 2011, or information derived from such a sample;”.

This amendment inserts a reference to the provisions of the Terrorism Prevention and Investigation Measures Act 2011 under which fingerprints, data or samples may be taken, so that fingerprints, data or samples obtained under paragraph 1 or 4 of Schedule 9 may be checked against fingerprints, data or samples taken under that Act.

Amendment 27, in schedule 9, page 133, line 13, leave out paragraph (k).

This amendment removes paragraph (k) from a list of provisions under which fingerprints, data and other samples may be taken. Paragraph (k) is not needed because its contents are already covered by paragraph (g).

Amendment 28, in schedule 9, page 133, line 30, after “paragraph 8” insert “, 8A”.

This amendment is consequential on Amendment 31.

Amendment 29, in schedule 9, page 134, line 4, at beginning insert—

“(Z1) This paragraph applies to paragraph 6 material taken from, or provided by, an individual who has no previous convictions or (in the case of England and Wales or Northern Ireland) only one exempt conviction.”

This amendment is consequential on Amendment 31.

Amendment 30, in schedule 9, page 134, line 4, leave out “Paragraph 6” and insert “The”.

This amendment is consequential on Amendment 29.

Amendment 31, in schedule 9, page 134, line 26, at end insert—

“8A (1) This paragraph applies to paragraph 6 material taken from, or provided by, an individual—

(a) who has been convicted of a recordable offence (other than a single exempt conviction) or of an offence in Scotland which is punishable by imprisonment, or

(b) who is so convicted before the end of the period within which the material may be retained by virtue of paragraph 8.

(2) The material may be retained indefinitely.

8B (1) For the purposes of paragraphs 8 and 8A an individual is to be treated as having been convicted of an offence if—

(a) in relation to a recordable offence in England and Wales or Northern Ireland—

(i) the individual has been given a caution or youth caution in respect of the offence which, at the time of the caution, the individual has admitted,

(ii) the individual has been found not guilty of the offence by reason of insanity, or

(iii) the individual has been found to be under a disability and to have done the act charged in respect of the offence,

(b) the individual, in relation to an offence in Scotland punishable by imprisonment, has accepted or has been deemed to accept—

(i) a conditional offer under section 302 of the Criminal Procedure (Scotland) Act 1995,

(ii) a compensation offer under section 302A of that Act,

(iii) a combined offer under section 302B of that Act, or

(iv) a work offer under section 303ZA of that Act,

(c) the individual, in relation to an offence in Scotland punishable by imprisonment, has been acquitted on account of the individual’s insanity at the time of the offence or (as the case may be) by virtue of section 51A of the Criminal Procedure (Scotland) Act 1995,

(d) a finding in respect of the individual has been made under section 55(2) of the Criminal Procedure (Scotland) Act 1995 in relation to an offence in Scotland punishable by imprisonment,

(e) the individual, having been given a fixed penalty notice under section 129(1) of the Antisocial Behaviour etc. (Scotland) Act 2004 in connection with an offence in Scotland punishable by imprisonment, has paid—

(i) the fixed penalty, or

(ii) (as the case may be) the sum which the individual is liable to pay by virtue of section 131(5) of that Act, or

(f) the individual, in relation to an offence in Scotland punishable by imprisonment, has been discharged absolutely by order under section 246(3) of the Criminal Procedure (Scotland) Act 1995.

(2) Paragraphs 8, 8A and this paragraph, so far as they relate to individuals convicted of an offence, have effect despite anything in the Rehabilitation of Offenders Act 1974 or the Rehabilitation of Offenders (Northern Ireland) Order 1978 (S.I. 1978/1908 (N.I. 27)).

(3) But a person is not to be treated as having been convicted of an offence if that conviction is a disregarded conviction or caution by virtue of section 92 or 101A of the Protection of Freedoms Act 2012.

(4) For the purposes of paragraphs 8 and 8A—

(a) an individual has no previous convictions if the individual has not previously been convicted—

(i) in England and Wales or Northern Ireland of a recordable offence, or

(ii) in Scotland of an offence which is punishable by imprisonment, and

(b) if the individual has previously been convicted of a recordable offence in England and Wales or Northern Ireland, the conviction is exempt if it is in respect of a recordable offence, other than a qualifying offence, committed when the individual was aged under 18.

(5) In sub-paragraph (4) ‘qualifying offence’—

(a) in relation to a conviction in respect of a recordable offence committed in England and Wales, has the meaning given by section 65A of the Police and Criminal Evidence Act 1984, and

(b) in relation to a conviction in respect of a recordable offence committed in Northern Ireland, has the meaning given by Article 53A of the Police and Criminal Evidence (Northern Ireland) Order 1989 (S.I. 1989/1341 (N.I. 12)).

(6) For the purposes of sub-paragraph (4)—

(a) a person is to be treated as having previously been convicted in England and Wales of a recordable offence if—

(i) the person has previously been convicted of an offence under the law of a country or territory outside the United Kingdom, and

(ii) the act constituting the offence would constitute a recordable offence under the law of England and Wales if done there (whether or not it constituted such an offence when the person was convicted);

(b) a person is to be treated as having previously been convicted in Northern Ireland of a recordable offence if—

(i) the person has previously been convicted of an offence under the law of a country or territory outside the United Kingdom, and

(ii) the act constituting the offence would constitute a recordable offence under the law of Northern Ireland if done there (whether or not it constituted such an offence when the person was convicted);

(c) a person is to be treated as having previously been convicted in Scotland of an offence which is punishable by imprisonment if—

(i) the person has previously been convicted of an offence under the law of a country or territory outside the United Kingdom, and

(ii) the act constituting the offence would constitute an offence punishable by imprisonment under the law of Scotland if done there (whether or not it constituted such an offence when the person was convicted);

(d) the reference in sub-paragraph (4)(b) to a qualifying offence includes a reference to an offence under the law of a country or territory outside the United Kingdom where the act constituting the offence would constitute a qualifying offence under the law of England and Wales if done there or (as the case may be) under the law of Northern Ireland if done there (whether or not it constituted such an offence when the person was convicted).

(7) For the purposes of paragraph 8, 8A or this paragraph—

(a) ‘offence’, in relation to any country or territory outside the United Kingdom, includes an act punishable under the law of that country or territory, however it is described;

(b) a person has in particular been convicted of an offence under the law of a country or territory outside the United Kingdom if—

(i) a court exercising jurisdiction under the law of that country or territory has made in respect of such an offence a finding equivalent to a finding that the person is not guilty by reason of insanity, or

(ii) such a court has made in respect of such an offence a finding equivalent to a finding that the person is under a disability and did the act charged against the person in respect of the offence.

(8) If an individual is convicted of more than one offence arising out of a single course of action, those convictions are to be treated as a single conviction for the purposes of calculating under paragraph 8 or 8A whether the individual has been convicted of one offence.”

This amendment and Amendment 36 make provision for the indefinite retention of fingerprints, data and other samples taken from a person who is or previously has been convicted of a specified offence.

Amendment 32, in schedule 9, page 134, line 40, at end insert—

“(d) the Chief Constable of the Ministry of Defence Police,

(e) the Chief Constable of the British Transport Police Force, or

(f) the Director General of the National Crime Agency.”

This amendment enables the Chief Constables of the Ministry of Defence Police and the British Transport Police Force and the Director General of the National Crime Agency to make a national security determination in relation to fingerprints, data and other samples.

Amendment 33, in schedule 9, page 135, line 32, after “8” insert “, 8A”.

This amendment is consequential on Amendment 31.

Amendment 34, in schedule 9, page 137, line 34, leave out paragraphs (h) to (j).

This amendment removes reference to the Royal Navy Police, the Royal Military Police and the Royal Air Force Police from the definition of “police force”. Those forces should not be included in that definition because members of those forces do not have the power to obtain fingerprints, data or other samples under Schedule 9.

Amendment 35, in schedule 9, page 137, leave out lines 38 to 40.

This amendment removes reference to the tri-service serious crime unit from the definition of “police force”. Members of that unit should not be included in that definition because they do not have the power to obtain fingerprints, data or other samples under Schedule 9.

Amendment 36, in schedule 9, page 137, line 40, at end insert—

“‘recordable offence’ has—

(a) in relation to a conviction in England and Wales, the meaning given by section 118(1) of the Police and Criminal Evidence Act 1984, and

(b) in relation to a conviction in Northern Ireland, the meaning given by Article 2(2) of the Police and Criminal Evidence (Northern Ireland) Order 1989 (S.I. 1989/1341 (N.I. 12));”.

See Amendment 31.

Amendment 37, in schedule 9, page 138, leave out lines 5 to 19 and insert—

“‘responsible chief officer of police’ means—

(a) in relation to fingerprints or samples taken by a constable of the Ministry of Defence Police, or a DNA profile derived from a sample so taken, the Chief Constable of the Ministry of Defence Police;

(b) in relation to fingerprints or samples taken by a constable of the British Transport Police Force, or a DNA profile derived from a sample so taken, the Chief Constable of the British Transport Police Force;

(c) otherwise—

(i) in relation to fingerprints or samples taken in England or Wales, or a DNA profile derived from a sample so taken, the chief officer of police for the relevant police area;

(ii) in relation to relevant physical data or samples taken or provided in Scotland, or a DNA profile derived from a sample so taken, the chief constable of the Police Service of Scotland;

(iii) in relation to fingerprints or samples taken in Northern Ireland, or a DNA profile derived from a sample so taken, the Chief Constable of the Police Service of Northern Ireland;”.

This amendment and Amendment 38 make provision identifying the responsible chief officer or police in relation to fingerprints or samples taken by a constable of the Ministry of Defence Police or the British Transport Police Force.

Amendment 38, in schedule 9, page 138, line 22, at end insert—

“(2) In the definition of ‘responsible chief officer of police’ in sub-paragraph (1), in paragraph (c)(i), ‘relevant police area’ means the police area—

(a) in which the material concerned was taken, or

(b) in the case of a DNA profile, in which the sample from which the DNA profile was derived was taken.”—(Tom Tugendhat.)

See Amendment 37.

Schedule 9, as amended, agreed to.

Ordered, That further consideration be now adjourned. —(Scott Mann.)

Foreign Interference: Intelligence and Security

Tom Tugendhat Excerpts

Monday 17th January 2022 Commons Chamber

[Priti Patel]

First, I am sure that the hon. Gentleman will continue to work with the intelligence and security services and co-operate with them at the highest level with regards to the alert that has been published and also to the areas that he has referred to. It is a fact that, across this House, we will come together to do everything possible to protect the integrity of our democracy and all hon. Members from such malign interference and threats. I also look forward to working with you, Mr Speaker, to close down some of the permissive loopholes that have been so publicly exposed in the last few days.

[Tom Tugendhat (Tonbridge and Malling) (Con)]

It is a great pleasure to hear my right hon. Friend’s statement today. The work she has done on defending this country from foreign interference, and on protecting British nationals under threat of Chinese state propaganda and influence, has been impressive, from her work on the Foreign Affairs Committee to her work in the Department on protecting British nationals overseas. May I ask, building on the questions that my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith) rightly asked, what more we are going to do to ensure that this dirty money does not come into our community? She will remember that the work she did on the Committee in 2019 raised the idea of a foreign agents registration Act, which would have exposed to criminal prosecution those who put money into our system to undermine our democracy.

[Priti Patel]

My hon. Friend knows my views on the whole area of foreign agent registration. This is not shining a spotlight any more; this is putting the full beam of transparency on to the dirty money that comes into our country. If I may have your indulgence for a second, Mr Speaker, let me say that for those of us who have spent time reading banking reports and financial reports, following the money that has had the most corrosive influence in some of our institutions has been self-evident. I have already referenced the new legislation that will come forward. This is an area that we are keen to pursue, working with our colleagues across Government, and that is something that my Department will lead on.

Afghanistan Policy

Tom Tugendhat Excerpts

Monday 13th September 2021 Commons Chamber

[Victoria Atkins]

First, I thank the Scottish Government and, indeed, all the devolved Administrations for their constructive work with us so far. It genuinely is a great example of the United Kingdom really pulling together.

I very much hear some of the hon. Gentleman’s criticisms in respect of numbers. I suspect that he and I will not be able to find accommodation on that. We have been careful to ensure that those people whom we can welcome, we can welcome and integrate well, which is why, working with local authorities, we have settled on the 5,000 figure. I remind the hon. Gentleman that the ACRS, which is for members of civil society, vulnerable people and so on, is in addition to those who are welcomed under ARAP. Unless things have suddenly changed over the past 24 hours or so, it is truly one of the most ambitious schemes in the world, so we should be really proud of it.

On looking after people who have been evacuated here, the hon. Gentleman will be pleased to hear that the tariff applies throughout the devolved nations as well. There are additional funds for education and so on.

On the Nationality and Borders Bill, I would argue that the very generosity of our country, though the resettlement scheme, shows our commitment as a Government to ensuring that there are safe and legal rights, which act as a balance against those people traffickers who exploit people at great personal risk—we saw only this weekend terrible news from the channel—for their own criminal ends. We want to encourage people to use safe and legal routes and we want to go after those people traffickers.

[Tom Tugendhat (Tonbridge and Malling) (Con)]

First, I pay enormous tribute not only to my hon. Friend the Minister but to the Home Secretary, whom I was texting barely half an hour before I came into the Chamber about an Afghan who is currently near a border, and she was personally sorting out the transit documents that I hope will enable him to come through. I also pay enormous tributes to the councils throughout the entire United Kingdom that have done enormous amounts to help us all to find accommodation for those in desperate need.

Does the Minister recognise that in many ways Afghanistan is many different communities, so people need to be looked at and addressed in different ways? What outreach has she done to the different community groups inside the United Kingdom? How is she looking to help those people who have links to various different elements in Afghan society to find their own home within that society here in the UK?

[Victoria Atkins]

I thank my hon. Friend for his absolute commitment to this issue. He has knowledge and expertise in respect of the region that I think it is fair to say few in the House possess: we are genuinely better informed when my hon. Friend stands to speak on Afghanistan and the implications in the region.

On my hon. Friend’s thanks to the Home Secretary, I join him in making that point about both the Home Secretary and, if I may say so, the Immigration Minister, my hon. Friend the Member for Torbay (Kevin Foster), who has done extraordinary amounts of work behind the scenes. He never asks for credit or kudos but I am determined to give him credit in Hansard for everything he has done.

This weekend, I had the pleasure of trying to help some Opposition colleagues with their queries. This is a genuine team effort and we desperately want to help the people we can help. As part of that, we of course must include—and I am determined to do so—Afghan civil society in this country. I have already met many groups that have had helpful and constructive ideas about how we can all reach out and help people to integrate, and I am extremely grateful to them. This is an ongoing process and I very much look forward to working with such groups to ensure that we offer the warm welcome that the Prime Minister has promised.

EU Settlement Scheme

Tom Tugendhat Excerpts

Wednesday 7th July 2021 Commons Chamber

[Stuart C. McDonald]

Lots of questions and loopholes have been identified. The fact that the Home Office had to issue hundreds of pages of guidance, even in the two or three weeks prior to the end of the transition period, shows that the issue has been difficult for it to address.

I come to what this debate should be about, which is looking forward to what can be done. We absolutely maintain that even now a declaratory scheme would be far preferable—people would still apply to the settlement scheme to prove their status, but at the very least the huge uncertainty would be removed and security would be delivered for them. Short of that, surely to goodness the transition period should be extended. There are a million reasons why that would be sensible—not least covid. Outreach work has been curtailed and embassies and scanning centres have been closed. People are not ready.

It is important to remember that this is not just a question of EU nationals being ready, but of employers, the Driver and Vehicle Licensing Agency, Department for Work and Pensions staff, landlords, local authority staff and bank staff having to be ready and NHS staff having to understand. As I said, the Home Office itself was still pumping out hundreds of pages of guidance in June and making tweaks to the system. I do not think the Home Office was ready for the end of the transition, and I do not think it can expect all those other organisations to be ready either. As I will mention, there is also an enormous backlog of cases.

Alternatively, the Government could at least remove the requirement for a reasonable excuse and keep the scheme open for the duration. It has to be open anyway, both for late applications and for people with pre-settled status who then go on to try to secure settled status. Why not simply allow people to come forward as it becomes necessary to secure their rights?

To be absolutely fair, the guidance on the reasonable excuse provision is reasonably generous, and more generous than it could have been, so I thank the Minister for that. But the very existence of that test plants huge seeds of doubt in people’s minds—if I have any doubt about whether my excuse will be accepted, am I putting myself at risk of enforcement action? I say that we should continue to encourage people to come forward, not discourage them.

That last proposal would be better than nothing, but it would not protect people from the impacts of the hostile environment in the meantime. That hostile environment is supposed to be undergoing an end-to-end review in the light of Wendy Williams’s Windrush report. The fact that the review has not yet been completed should be another ground for extending the grace period. More fundamentally, the hostile environment should be entirely suspended until the review takes place and its findings are implemented. All these are real, sensible, constructive options, open to the Government, that would ease the pain of the process. I hope the Government listen.

I turn now to a tiny number of examples of how difficult, technical and confusing the process has become. I am highlighting what groups such as the Joint Council for the Welfare of Immigrants and the3million are telling me. I do that to press the Minister for a response and to underline the case that there has at least to be an extension to the transition period.

First, I turn to the question of those who applied before the deadline but are still waiting for a decision. How on earth is it that, as I understand it, the backlog has risen to 570,000 cases? Back in October 2019, the resolution centre was able to conclude just over 400,000 cases, but in each of the three months up to the deadline, as I understand it, fewer than half that number were concluded each month, despite additional staff having been drawn in from the Post Office and elsewhere. Is that backlog not enough in itself to justify an extension?

Can the Minister tell us how many applications received in June were dealt with in the five-day target? According to EU settlement scheme statistics, applications from children comprise 15% of the total, with decisions on 25% of applications still pending; they also comprise around a quarter of applications pending for over three months. Why is that?

In theory, the full rights of people with outstanding in-time applications are protected while they wait—and that, of course, is welcome. But what is the reality on the ground? Already, all sorts of reports are coming in to representative groups about employers and landlords—and also the Home Office’s own Border Force staff—getting the checks wrong. That does not surprise me, because the situation is messy.

Some people with outstanding in-time applications will provide their prospective employer or landlord with a certificate of application to show that they have made the application. Some will provide a physical certificate, printed off, that leads to the employer contacting the employer checking service or the landlord checking with the landlord checking service. Others still will not have a certificate of approval but just an acknowledgement email; that, too, should lead to the checking service being consulted.

But in the last few days, the Home Office has started sending digital certificates of application to avoid the need for anyone to use the checking services, which can take a couple of days. The applicant will provide a code to the prospective employer or landlord, and when that is input into the system it should confirm that an application is outstanding. I hope hon. Members followed that, because all of us in this House are employers, but given that the guidance was issued only a couple of weeks before the deadline, I suspect that there are huge swathes of employers and landlords out there who do not have the first clue what somebody means when they approach them for a new tenancy or a new job and say, “Here’s my digital code. This should tell you that I have an application outstanding.”

[Tom Tugendhat (Tonbridge and Malling) (Con)]

I am absolutely delighted to hear this speech, because the hon. Gentleman is explaining the complexities of leaving a Union that we were part of for about 40 years, yet somehow he seems to assume that leaving this Union is really hard but that leaving one that includes the military, finance, pensions, homes and everything else is going to be incredibly easy. I am not quite sure whether he will explain that disconnect.

[Stuart C. McDonald]

The point, as I have said, is that the Government could have made this process a hell of a lot easier. Government decisions have made this difficult, not anything else.

We know from research that discrimination is widespread when private actors have to undertake even basic checks, such as passport and visa checks, and it is blindingly obvious that the half a million people who are in the queue are going to face discrimination on stilts if they have to explain these processes. Other than telling employers and landlords to follow guidance, what more is being done to clamp down on and prevent this discrimination? What monitoring, even, is being done?

In theory, public bodies should find this easier, yet we hear of cases of universities not being prepared to confirm that students are eligible for home fee status, or the Student Loans Company not confirming eligibility for student finance until their status is decided. Just an hour ago, I learned of a universal credit case being turned down because, even though the national insurance number and date of birth all matched up, the Department for Work and Pensions could not verify the digital share code. What is the Home Office doing to identify and accelerate these cases to ensure that no one is denied the educational opportunities that they are entitled to? How will people be compensated when they have been wrongly refused entry to the UK, work or housing, or been charged for NHS treatment or incorrectly denied home fees or student finance because of a failure to apply the law correctly?

Another huge problem is that use of the checking service provides a landlord or employer with only a six-month guarantee of protection from prosecution, but why would an employer or landlord take on someone when they can have a guarantee of only six months’ rent or six months’ work? That is why it was wrong to end the transition while over 500,000 people were in this perilous position. A freedom of information request in May showed that 100,000 people had been waiting for over three months for a decision. That is a hell of a long time to be in this semi-legal limbo.

Finally on this particular topic, I understand that there are also significant numbers of cases where people have completed parts of the application process online but not the whole process—for example, even just the final “submit” stage. Is the Home Office taking steps to identify and reach out to those people as well?

Turning to people who apply late, or have applied late and are waiting for a decision, it is welcome that they can continue to access healthcare and that, if I understand it correctly, they can continue to exercise rights that they are currently exercising, such as keeping an existing job or social security benefit if they apply with 28 days’ notice. However, the huge gap here is that there is no right to take on a new job or new accommodation in England, or to claim a new social security benefit or use other services, so an important first question is why the Home Office thinks this is consistent with the withdrawal agreement, which states that pending a decision on any application, all rights will be deemed to apply to the applicant.

It is easy for the Government to say, “Well the process is quick and therefore these issues should not be widespread. Get the application in and then get on with your job hunt or social security application”, but, in practice, it is not that simple. We know that over 100,000 people had been waiting for more than three months in May, and remember, too, that, as we know from Windrush, it is precisely when people are making new job applications or applying for social security or a tenancy that they suddenly realise that they have not applied and should have done. Waiting for three months at these moments of crisis could destroy lives, with employment, accommodation and financial support all missed out on.

The Home Office has mentioned a process for accelerating certain cases, which is welcome, but how does that work? How can we ask on behalf of our constituents that their case is accelerated for these very good reasons? What will the criteria be for accelerating cases, what will the timescales be, and what does that mean for other cases and how long they will take?

Finally, on late applications, I previously asked the Minister what would happen if someone incurred health charges because they had failed to apply for the settlement scheme, but, having realised their error, they then went on to apply late and successfully showed that they had a reasonable excuse. If I recall correctly, the Minister suggested at the Home Affairs Committee that it would be ridiculous to then insist on those charges being paid. After all, they had had a reasonable excuse for a late application, but, as I understand it—I would love to be corrected—that is exactly what will now happen in England. How can that be justified? Why is it that someone who is considered to have reasonable grounds to apply late can still be held liable for healthcare charges incurred before submission of their justifiably late application? It seems an incredibly strange situation.

What about those who have not applied at all? I want everyone to apply, though late—I am sure we all do—so what is the Government’s strategy here? Is there not a danger that the reasonable excuse test is going to put people off, especially if, as suggested in the guidance, it has to be more strictly interpreted the more time goes on? Why is that advice there? Those who encounter border enforcement, whether the Home Office version or delegated private actors such as employers, are going to have 28 days’ notice to apply, but what has been done to make sure that some of the people most likely to have missed a deadline—vulnerable and marginalised groups, and maybe those with health issues or with poor English—understand what that notice means and what exactly is required of them? For example, is it going be available in different languages, will they be signposted for advice and what happens if that 28-day deadline is missed?

It is much more likely that people who have not applied will become aware of the problem only through an encounter not with Border Force, but with an employer, the DWP, a landlord or somebody else, so what work has been done to ensure that, rather than just saying no, they signpost and, in the case of Government Departments, assist them in ensuring that an application can be submitted. The Government are committed to funding grant-funded organisations supporting EU citizens with late applications until September. Why is it only to September? Can we have funding for beyond that as well?

Finally, I turn to the issue for those who actually get settled or pre-settled status. Even if somebody is successful, that is not the end of their problems, and others, as I have said, will speak about the lack of a physical proof of status. There are more than 2 million people with pre-settled status, and many of them will struggle to prove the five-year residence required for settled status. What support will be available to help them with equally vital applications, and what happens to those who fail to apply at the time when their pre-settled status expires?

The settlement scheme may have been designed to be straightforward, but its interplay with our complicated immigration system means that it just cannot be. I struggle to follow its implications, and I suspect many hon. Members will have struggled to follow them as well, yet guidance for employers and landlords was issued just a couple of weeks back. This has, I am afraid, at the end of the day, ended up being a rush job. Even if all our other ideas are rejected, at the very least we need a longer transition period, and for the umpteenth time, I do ask that the Minister meets the3million campaign group.

In closing, during the referendum the now Chancellor of the Duchy of Lancaster also promised that, after Brexit, Scotland would have immigration powers. That seems to have gone the same way as his promise to EU nationals. We have debated the devolution of immigration or at least some immigration powers before, and it is on these occasions that the normally very measured Minister tends to start engaging in tub-thumping rhetoric rather than the arguments in the discussion. I am not going to repeat all those arguments today, but report after report from the Scottish Government, academics, thinktanks and immigration lawyers offer myriad reasons why this should be done, and templates for how this could be done.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for the Home Department (Kevin Foster)]

As the first Home Office Minister to come to the Dispatch Box since this afternoon’s news, I would like to pay tribute to my colleague and right hon. Friend the Member for Old Bexley and Sidcup (James Brokenshire), and say that we will miss him as a Minister in the Home Office. We obviously still look forward to continuing to work with him as a Member of this House, and wish him the very best for the future.

I am very grateful to the SNP for the opportunity to use the time allocated for today’s debate to highlight the great success of the EU settlement scheme, our approach to late applications, and how welcome it is that so many of our friends and neighbours who arrived during the time of free movement want to make our United Kingdom their home on a permanent basis. I appreciate the generally constructive tone of my debates with the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Stuart C. McDonald): even though we disagree on some fundamental points, he has given some very constructive input, both during his time as my direct shadow and now in his slightly different role as the SNP’s lead spokesperson on home affairs.

As this House is aware, the deadline for applying to the scheme for those resident in the UK by the end of the transition period was last Wednesday, 30 June. As of that date, in excess of 6 million applications have been received by the scheme. More than 5.4 million of those have already concluded and more than 5.1 million grants of status have been issued, with literally thousands being decided every day.

[Tom Tugendhat]

I am delighted to hear my hon. Friend making these statements. Is he aware that if he had applied for settled status in France, he would probably be queuing up even now, and that if he had done the same in Belgium, he would even now be waiting for documents to be approved? The Home Office has secured a remarkable achievement: even when we were members of the European Union, the paperwork needed to be legally resident in France, Italy, Germany, the Netherlands, and in many other countries around the EU was significantly more complicated than the procedure that my hon. Friend has set up.

[Kevin Foster]

I thank my hon. Friend for his comments: obviously, he has a unique perspective on these issues, given his chairmanship of the Select Committee on Foreign Affairs. It is always worth reflecting that on the day the French system opened for applications for UK nationals living in France, the EUSS had already received over 4 million applications. That just shows the scale of the scheme, and most people had the ability to apply from home, using an app on their smartphone to verify their identity in conjunction with their national passport. We are very pleased, and we hope that others will learn lessons from our success at getting so many applications in and so many settled and concluded already when it comes to how they approach the position of UK citizens living in their own nations.

To be clear, any application posted on 30 June is also considered to be in time. In recognition of the time it can take for post from all parts of our Union, especially the highlands and islands, to be delivered, we will assume any application received in the post until midnight tonight was posted in time. This is to ensure there is no prospect of an in-time application being ruled out purely on the basis of when it was delivered to the Home Office. Overall, these numbers are significant just in themselves: despite all the warnings about our potential willingness and ability to deliver, literally millions of EU citizens in the UK and their family members now have their status protected and their rights secured under UK law.