Terrorist Asset-Freezing (Temporary Provisions) Bill (Allocation of Time)

House of Commons, 8 February 2010.

Sarah McCarthy-Fry (Labour, Portsmouth North)

I beg to move,

That the following provisions shall apply to the Terrorist Asset-Freezing (Temporary Provisions) Bill:

Timetable

1.-(1) Proceedings on Second Reading, in Committee, on consideration and on Third Reading shall be completed at today's sitting in accordance with the following provisions of this paragraph.

(2) Proceedings on Second Reading shall (so far as not previously concluded) be brought to a conclusion four hours after the commencement of proceedings on the Motion for this Order or at 8 pm (whichever is the earlier).

(3) Proceedings in Committee, on consideration and on Third Reading shall (so far as not previously concluded) be brought to a conclusion at 10 pm.

Timing of proceedings and Questions to be put

2. When the Bill has been read a second time-

(a) it shall (Notwithstanding Standing Order No. 63 (Committal of bills not subject to a programme order)) stand committed to a Committee of the whole House without any Question being put;

(b) the Speaker shall leave the Chair whether or not notice of an Instruction has been given.

3.-(1) On the conclusion of proceedings in Committee, the Chairman shall report the Bill to the House without putting any Question.

(2) If the Bill is reported with amendments, the House shall proceed to consider the Bill as amended without any Question being put.

4. For the purpose of bringing any proceedings to a conclusion in accordance with paragraph 1, the Chairman or Speaker shall forthwith put the following Questions (but no others)-

(a) any Question already proposed from the Chair;

(b) any Question necessary to bring to a decision a Question so proposed;

(c) the Question on any amendment moved or Motion made by a Minister of the Crown;

(d) any other Question necessary for the disposal of the business to be concluded.

5. On a Motion so made for a new Clause or a new Schedule, the Chairman or Speaker shall put only the Question that the Clause or Schedule be added to the Bill.

6. If two or more Questions would fall to be put under paragraph 4(d) in relation to successive provisions of the Bill, the Chairman shall instead put a single question in relation to those provisions.

Consideration of Lords Amendments

7.-(1) Any Lords Amendments to the Bill shall be considered forthwith without any Question being put.

(2) Proceedings on consideration of Lords Amendments shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement.

8.-(1) This paragraph applies for the purpose of bringing any proceedings to a conclusion in accordance with paragraph 7.

(2) The Speaker shall first put forthwith any Question already proposed from the Chair.

(3) If that Question is for the amendment of a Lords Amendment the Speaker shall then put forthwith-

(a) a single Question on any further Amendments to the Lords Amendment moved by a Minister of the Crown, and

(b) the Question on any Motion made by a Minister of the Crown that this House agrees or disagrees to the Lords Amendment or (as the case may be) to the Lords Amendment as amended.

(4) The Speaker shall then put forthwith-

(a) a single Question on any Amendments moved by a Minister of the Crown to a Lords Amendment, and

(b) the Question on any Motion made by a Minister of the Crown that this House agrees or disagrees to the Lords Amendment or (as the case may be) to the Lords Amendment as amended.

(5) The Speaker shall then put forthwith the Question on any Motion made by a Minister of the Crown that this House disagrees to a Lords Amendment.

(6) The Speaker shall then put forthwith the Question that this House agrees to all the remaining Lords Amendments.

(7) As soon as the House has-

(a) agreed or disagreed to a Lords Amendment, or

(b) disposed of an Amendment relevant to a Lords Amendment which has been disagreed to,

the Speaker shall put forthwith a single Question on any Amendments moved by a Minister of the Crown and relevant to the Lords Amendment.

Subsequent stages

9.-(1) Any further Message from the Lords on the Bill shall be considered forthwith without any Question being put.

(2) Proceedings on any further Message from the Lords shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement.

10.-(1) This paragraph applies for the purpose of bringing any proceedings to a conclusion in accordance with paragraph 9.

(2) The Speaker shall first put forthwith any Question which has been proposed from the Chair.

(3) The Speaker shall then put forthwith the Question on any Motion made by a Minister of the Crown which is related to the Question already proposed from the Chair.

(4) The Speaker shall then put forthwith the Question on any Motion made by a Minister of the Crown on or relevant to any of the remaining items in the Lords Message.

(5) The Speaker shall then put forthwith the Question that this House agrees with the Lords in all the remaining Lords Proposals.

Reasons Committee

11.-(1) The Speaker shall put forthwith the Question on any Motion made by a Minister of the Crown for the appointment, nomination and quorum of a Committee to draw up Reasons and the appointment of its Chairman.

(2) A Committee appointed to draw up Reasons shall report before the conclusion of the sitting at which it is appointed.

(3) Proceedings in the Committee shall (so far as not previously concluded) be brought to a conclusion 30 minutes after their commencement.

(4) For the purpose of bringing any proceedings to a conclusion in accordance with sub paragraph (3), the Chairman shall-

(a) first put forthwith any Question which has been proposed from the Chair, and

(b) then put forthwith successively Questions on motions which may be made by a Minister of the Crown for assigning a Reason for disagreeing with the Lords in any of their Amendments.

(5) The proceedings of the Committee shall be reported without any further Question being put.

Miscellaneous

12. Paragraph (1) of Standing Order No. 15 (Exempted business) shall apply so far as necessary for the purposes of this Order.

13.-(1) The proceedings on any Motion made by a Minister of the Crown for varying or supplementing the provisions of this Order shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement.

(2) Paragraph (1) of Standing Order No. 15 (Exempted business) shall apply to those proceedings.

14. Standing Order No. 82 (Business Committee) shall not apply in relation to any proceedings to which this Order applies.

15.-(1) No Motion shall be made, except by a Minister of the Crown, to alter the order in which any proceedings on the Bill are taken or to recommit the Bill.

(2) The Question on any such Motion shall be put forthwith.

16.-(1) No dilatory Motion shall be made in relation to proceedings to which this Order applies except by a Minister of the Crown.

(2) The Question on any such Motion shall be put forthwith.

17. The Speaker may not arrange for a debate to be held in accordance with Standing Order No. 24 (Emergency debates)-

(a) at today's sitting, or

(b) at any sitting at which Lords Amendments to the Bill are, or any further Message from the Lords is, to be considered, before the conclusion of any proceedings to which this Order applies.

18.-(1) Sub-paragraph (2) applies if the House is adjourned, or the sitting is suspended, before the conclusion of any proceedings to which this Order applies.

(2) No notice shall be required of a Motion made at the next sitting by a Minister of the Crown for varying or supplementing the provisions of this Order.

19. Proceedings to which this Order applies shall not be interrupted under any Standing Order relating to the sittings of the House.

20. The Speaker shall not adjourn the House at the sitting on the day on which the Bill is sent back to the House from the Lords until-

(a) any Message from the Lords on the Bill has been received;

(b) he has reported the Royal Assent to any Act agreed upon by both Houses.

As set out in my written ministerial statement of 5 February, the Terrorist Asset-Freezing (Temporary Provisions) Bill is being introduced as an urgent temporary measure to prevent assets from being unfrozen and returned to terror suspects as a result of the Supreme Court's decision to quash the 2006 terrorism order without a stay. That decision had effect from 4 February.

The Government have had urgent discussions with the relevant banks following the Supreme Court's decision not to grant a stay and those banks have confirmed that in the light of the Government's decision to bring forward immediate legislation providing retrospective legal authority for them to continue existing freezes, no funds will be unfrozen as a result of the Supreme Court's judgment.

Douglas Hogg (Conservative, Sleaford and North Hykeham)

I am grateful to the hon. Lady for giving way, but will she be good enough to tell us why, given the reports of the Newton Committee in 2001 and the Joint Committee in 2004, as well as the facts that the relevant litigation started in 2008, was in the Court of Appeal in October 2008 and came before the Supreme Court in October 2009, primary legislation was not put before the House long ago that could have been the subject of proper consultation and debate?

Sarah McCarthy-Fry (Labour, Portsmouth North)

We believe that we had strong grounds in law for introducing the secondary legislation under the United Nations Act 1946-and I should point out that the Court of Appeal agreed with us-so the matter is by no means clear-cut.

National security and public protection are priorities for the Government. We aim to ensure that there is no gap in the asset-freezing regime, that suspected terrorist funds cannot be diverted and used for terrorist purposes and that suspected terrorists do not get free access to the UK's financial system. That is why we are moving this motion to ensure that there is rapid discussion of the Bill today, and I am sure that hon. Members will contribute to that debate. We consider it necessary for the UK's national security to act swiftly to restore asset freezing on a temporary basis under primary legislation.

Neil Gerrard (Labour, Walthamstow)

My hon. Friend says that the banks have agreed to continue to freeze assets pending the passage of emergency legislation, so on what legal basis will they be freezing assets in that period?

Sarah McCarthy-Fry (Labour, Portsmouth North)

I take on board my hon. Friend's point, but I remind him that we are debating a motion to set out the time in which we will discuss the Bill. It would be better to discuss the issue that he raises when we get to Second Reading, or Committee, if the motion is agreed to.

Lembit Öpik (Liberal Democrat, Montgomeryshire)

I shall leave the detailed discussion of the Bill's content to my more expert colleagues. I am concerned about the frequency with which we seem to be allocating time to expediting legislation on an emergency basis. Why do the Government increasingly feel that they have to rush things through? We have had a long time to discuss this issue, as the right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg) has pointed out, but the Bill seems to have been jammed right up towards the end of the Session.

Sarah McCarthy-Fry (Labour, Portsmouth North)

Again, I take on board the hon. Gentleman's point, but, obviously, we are not in control of the Supreme Court's timetable. If we are to debate the issue of proper scrutiny and the length of time given to the Bill, it would be better to get the motion passed so that we can get on with discussions about whether this is the right way of proceeding. The measure is a temporary one that would be used while we introduce permanent measures, with time for Parliament fully to scrutinise our proposals.

Mark Hoban (Conservative, Fareham)

Let me be clear from the outset: we shall not oppose the programme motion because the time spent doing so would eat into the time allowed for proper debate of the Bill, but the Minister must accept that the Bill is being rushed through today because the Government have failed to put in place a proper timetable in which proper primary legislation could be produced. My right hon. and learned Friend the Member for Sleaford and North Hykeham (Mr. Hogg) rightly said that the Government have had plenty of notice regarding this matter: there have been repeated warnings to them about the basis on which the terrorist orders were being issued. Rather than rush through measures this afternoon, the Government could have acted earlier to ensure that there was a proper basis on which to make the orders.

We recognise, however, that the judgment that the Supreme Court issued on Thursday quashing the orders means that terrorists could have access to financial resources and the financial system, and that it is therefore vital that the Bill should complete its Commons stages today and receive Royal Assent as soon as possible. If the Bill is not enacted, terrorist suspects could have access to finances and could use them to facilitate terrorist acts. I think that we all agree that it would be better if we were not in this situation now and if the Government had read the warning signals clearly and introduced primary legislation sooner so that they would not be reduced to rushing through emergency measures today.

Keith Vaz (Labour, Leicester East)

I shall be brief and support the Minister in what she is trying to do. It is vital that the matter comes before the House, as it has done, as soon after the Supreme Court judgment as possible. Clearly, it could have been brought before the House on Friday, but it is much better that it should be before the House today in order to allow for proper scrutiny.

The motion deals solely with the allocation of time. If we deal with it quickly, all the proper points that have been raised by the hon. Member for Fareham (Mr. Hoban) and others as to why we are in this position can be addressed during the substantive debate. Of course we would like to know why this happened and why Parliament did not have an opportunity to vote on it previously, but I hope that we can make quick progress on the motion and have a proper debate on the substance.

David Heath (Liberal Democrat, Somerton and Frome)

I wish that that argument were more persuasive, and that there was an opportunity during the substantive debate to cover these matters. However, the accelerated procedure is predicated entirely upon the lack of opportunity to deal with these matters earlier, and we must ask the Government why that is the case. I am deeply unhappy with the accelerated procedure unless there are very strong reasons for it.

No one wants criminal terrorists to be able to use money to support terrorist operations, so it is a seductive argument to suggest that we must push the Bill through, whatever its merits, in the shortest possible time in order to fill the lacuna. But the lacuna is of the Government's making, and that is what they need to recognise.

Keith Vaz (Labour, Leicester East)

I am not disputing for one moment that we should scrutinise the Government and question them about why they have reached this position, but we had better get on with agreeing the motion so that we can spend appropriate time on the Bill. If the hon. Gentleman believes that the Bill must be passed today, he must accept that today will end at midnight, unless the Liberal Democrats have a way of extending it beyond midnight, so the quicker we get on to discussing the motion, the better.

David Heath (Liberal Democrat, Somerton and Frome)

The right hon. Gentleman, who has been in the House many years, knows that parliamentary procedure allows us to extend a day indeterminately, if we so choose. Such is the Alice in Wonderland world in which we live. I do not propose to do so, but the Minister must respond to the fact that, as has been pointed out by the right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg), that there have been a number of occasions when the procedures that underlie the Bill have been thrown into question, when the Government had the opportunity to act and chose not to. They chose not to act in the context of what they claim is an urgent requirement to have the legislation in place. I should have thought that a prudent Government who felt that that was the case would have introduced primary legislation at an earlier stage, as a belt-and-braces measure. They would not have waited for the Supreme Court to deliver its judgment. They would have put in place a properly debated, properly considered Bill in order to put the matter beyond doubt, and they have not done so.

The fast-track legislation justification in the explanatory notes is the key to the allocation of time motion. Under our procedures now, the Government are required to give answers to various questions about why we should accept the proposition. In response to the question,

"What efforts have been made to ensure the amount of time made available for Parliamentary scrutiny has been maximised?",

the Government simply say that this is the first opportunity since the quashing of the 2006 Order. As we have heard, it was possible to address the issue before the Supreme Court made that judgment, but they chose not to do so.

In response to the question,

"To what extent have interested parties and outside groups been given an opportunity to influence the policy proposal?"

the Government state:

"In light of the pressing need to put in place primary legislation . . . the Treasury have not had an opportunity to consult external stakeholders specifically about the Bill."

What an extraordinary thing not to have done if they knew that there was a possibility of having to introduce legislation.

A further justification is offered. In answer to the question,

"Has an assessment been made as to whether existing legislation is sufficient to deal with any or all of the issues in question?"

the Government state:

"No existing legislation is in place which would have the effect of saving temporarily the UN Terrorism Orders, or providing comparable powers to make asset freezes."

I accept the first part of that contention-that there is nothing precisely based on the UN terrorism orders; but on the statute book there are certainly comparable powers to make asset freezes, because over the past few years the Government have inundated us with Acts that deal with precisely that problem. There is the Terrorism Act 2000, and the Anti-Terrorism, Crime and Security Act 2001, part 2 of which deals specifically with the making of freezing orders.

The Government's case is undermined irrevocably by one Supreme Court judge, Lord Hope, who, in the judgment of Ahmed against the Government, said:

"Detailed provision is made in Schedule 3 for the content of freezing orders, including a system for the granting of licences authorising funds to be made available. Orders made under the Act are subject to the affirmative resolution procedure...and they cease to have effect after two years... To a large degree, the power to make freezing orders under this Act enables the Treasury to do what paras 1(d) and 2(d) of SCR 1373(2001) require. But it is more precisely worded, and it contains various safeguards."

That is what the Treasury do not like-the fact that existing legislation contains the safeguards that Parliament felt appropriate. The Treasury therefore chooses not to use that-

Sylvia Heal (Deputy Speaker, Halesowen and Rowley Regis)

Order. Could I remind the hon. Gentleman that we are talking about the allocation of time? I am sure that there will be an opportunity for him to develop those arguments later.

David Heath (Liberal Democrat, Somerton and Frome)

But, Madam Deputy Speaker, my point is precisely about the allocation of time, because it is precisely about the justification for the fast-track procedure that is stated quite clearly in the explanatory memorandum. The case for the fast-track procedure is that no other legislation is in place, yet Lord Hope in the Supreme Court makes it abundantly clear that other legislation is in place. He says:

"Yet the Treasury have, it seems, chosen not to make use of the powers given to them by this Act, preferring to use the general power under section 1 of the 1946 Act."

He goes on to say:

"In my opinion the rule of law requires that the actions of the Treasury in this context be subjected to judicial scrutiny."

That is a powerful judgment that fatally undermines the Government's case that no other legislation will enable them to safeguard the national interest. They simply choose not to use what is already in place.

Lembit Öpik (Liberal Democrat, Montgomeryshire)

Is my hon. Friend effectively saying that, when faced with the inconvenience of checks and balances on human rights, this Government prefer to declare an emergency, have a debate and try to sweep them away-in rather the same way that they had three goes at banning Brian Haw, who still happens to live in Parliament square?

David Heath (Liberal Democrat, Somerton and Frome)

My hon. Friend is absolutely right; he has got it in one. That is why the allocation of time motion is before us today. There is one abhorrent point in it, incidentally. Given the difficulties inherent in such legislation, and the Supreme Court's judgment, I find it extraordinary that, if another place makes suggestions to us about how the legislation might be improved, all those amendments will be dealt with in one hour by this House. These matters strike at the fundamental liberties of citizens: by Executive decision, their assets can be frozen on the basis of suspicion. This House would not be doing its job properly if it were to accept that.

At the end of the day, the legislation is before us because the Government have been found to be acting ultra vires and failing to secure proper parliamentary approval. Other Commonwealth jurisdictions have had no problem in that respect: the Australian and New Zealand Governments had no problem in going back to their Parliaments and asking for their approval properly. However, the arrogance of this Government and, in particular, the Treasury means that they do not understand what Parliament is for, and they do not understand the proper scrutiny of Bills. That is why the motion is before us today, and I invite my right hon. and hon. colleagues to vote against it.

Douglas Hogg (Conservative, Sleaford and North Hykeham)

I, too, rise to express my considerable anxiety at what we are doing.

First, I accept that we will have to enact the Bill today. Leaving aside the fact that the Government have a majority, the truth is that the Bill has to go through because we are where we are, but the Government's conduct in this matter is wholly lamentable, and within the rules of order I wish to spell out why. First, the timetable provides for very brief discussion. All stages of this Bill have to be finished by 10 o'clock tonight. The hon. Member for Somerton and Frome (Mr. Heath) made a good point about the Lords amendments as they are provided for in the timetable motion. Given that the Bill was published at the end of last week, those in the other place will have a little more time to reflect on what has happened, and I have no doubt that they will come forward with amendments. However, this House will be given only one hour to consider those amendments. That is wholly lamentable.

Lembit Öpik (Liberal Democrat, Montgomeryshire)

Does it strike the right hon. and learned Gentleman as ironic that the Government want to rush this through in such a way that they could build in further failings in the legislation, which could be prevented if we had proper scrutiny? Once again, they are legislating in haste and allowing themselves the risk of repenting at leisure.

Douglas Hogg (Conservative, Sleaford and North Hykeham)

Yes, I agree with that. Nor is it necessary, because the provisions of the Bill-I will not expand on those at the moment, Madam Deputy Speaker-enable previous Acts to be validated and declared legal, so we could take a more leisurely approach in the knowledge that if the banks refused to transfer money, they would be protected by the language of the statute that we will pass in due course.

The truth is that this House has had almost negligible time for consideration. The Bill was published on 5 February. It puts into primary legislation the language of the statutory instrument that attracted such serious criticism in the Supreme Court. Lord Hope said, in terms, that it was an affront to democracy-that it struck at the heart of democracy-and this House is being asked to echo those provisions by the end of today's business. That is a scandal. It is no surprise, either, that Lord Hope should have been so concerned, because the freezing provisions in the 2006 order are very wide in their impact. Furthermore, the designation procedures whereby individuals are designated as persons caught by the provisions are not subject to any proper review. Anybody who supposes that judicial review is a proper remedy in this class of case is making a very serious mistake. Speaking of mistakes, the penalty for infringing the offences in the legislation that we will pass in three hours or so is seven years' imprisonment, which is a very serious tariff.

One of the problems inherent in the timetable motion is the fact that right hon. and hon. Members have not had a chance to consider amendments. The Bill was published on 5 February-last Friday-and today is Monday. Sensible people do not set about drafting amendments until they have had an opportunity to consult. There can have been no consultations; it is therefore not surprising that there are so few amendments. What is more, none of the amendments deals with the central issue-whether there should be a proper judicial review or appeal process as to the scope of freezing orders or as to designation. That is not because such amendments are not required or justified in law-clearly, the Supreme Court was looking for precisely that class of amendment-but rather because this thing has been so rushed that right hon. and hon. Members have not had an opportunity to formulate them. That shows how dangerous this timetable motion is.

The Minister said, "Well, of course, until the last moment we were confident of winning in another place." That is a lamentable approach to the matter. First, the issues were very grave and required primary legislation. Secondly, as I said in my intervention on the Minister-if she would be good enough to listen-Lord Newton of Braintree, who has had huge ministerial and other experience in this place and elsewhere, headed a committee that said, in terms, that legislation of this class should be primary legislation. That view was repeated in 2004 by the Joint Committee on Human Rights. Let nobody say that the Government have been caught by surprise. They have known for a long time.

Furthermore, the litigation that gave rise to the Supreme Court judgment began in 2008, entered the Court of Appeal in October 2008 and reached the Supreme Court in October 2009. There was ample time to introduce primary legislation, or at least draft proposals, that could be consulted on among those with an interest in the matter. That was all the more necessary and important because the principal legislation involved is secondary legislation that never went through the parliamentary process. The measures had no Committee stage, Second Reading or Report, yet they will enable the Treasury on "reasonable suspicion" to designate a person, leaving them unable to deal with their financial affairs.

That is lamentable. The timetable motion will pass, I know, and the Bill will pass into the other place. In view of the timetable motion, I suspect that it will be largely unchanged when it returns. True, it has a sunset clause, but that expires at the end of this year, so for nearly 12 months, potentially unjust legislation will be on the statute book. That is the fault of this Government-arrogant, uncaring, undemocratic and smug. Happily, the general election is coming soon.

Sarah McCarthy-Fry (Labour, Portsmouth North)

I have listened with interest to hon. Members' contributions on the motion. The main thrust of the arguments can be made on Second Reading and during debate on the clauses; I just want to put a couple of points on the record.

Our terrorist freezing Orders in Council were made in good faith. The Court of Appeal agreed with the Government on the matter in October 2008. I point out that one of the Supreme Court judges, Lord Brown, in the minority, considered that the United Nations Act 1946 gave the Treasury wide enough powers to draft the Al-Qaida and Taliban (United Nations Measures) Order 2006 as it did.

I emphasise that the Bill will establish a temporary measure. We have published a longer Bill intended to undergo proper scrutiny; I am sure that one of the arguments that we will have this evening involves how much time people consider is enough for proper scrutiny.

I hesitate to contradict the hon. Member for Somerton and Frome (Mr. Heath), who speaks for the Liberal Democrats, but the powers under the Anti-terrorism, Crime and Security Act 2001 are not comparable. They can be used only against threats emanating from outside the UK, not domestic threats such as UK-based terrorists. With that, I hope that I can persuade him not to oppose the motion, which I commend to the House.

Question put.

The House proceeded to a Division.

Sylvia Heal (Deputy Speaker, Halesowen and Rowley Regis)

I ask the Serjeant at Arms to investigate the delay in the Aye Lobby.

Terrorist Asset-Freezing (Temporary Provisions) Bill

Liam Byrne (Labour, Birmingham, Hodge Hill)

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

The whole House would wish that today's provisions were not required, yet we are realists, and we know that the real world demands action of the kind proposed in the Bill. Terrorism continues to pose a threat to the United Kingdom. Indeed, the Home Secretary recently apprised the House of the fact that the terrorist threat is now judged as severe-in other words, highly likely at any time.

As hon. Members know, terrorist organisations, including al-Qaeda, have executed or planned a succession of attacks with the aim of causing mass casualties. Many of our constituents have been affected or caught up or murdered. Yet the economics of that threat are frighteningly simple. The cost of a terrorist attack is low, yet its impact is devastating. The attacks on London on 7 July 2005, for example, cost the perpetrators just £8,000, yet the price paid by the British people was immeasurably greater.

For that reason, we seek to fight back with every appropriate weapon, which must include control of finance, assets and cash. Without resources, terror networks are unable to plan, organise or execute attacks, for which reason the United Nations requires that all states:

"Freeze without delay...assets"

and

"resources of persons who commit, or attempt to commit, terrorist acts or participate in or facilitate the commission of terrorist acts".

Our tools therefore must include action against terrorist finance, which is now an important part of the UK's counter-terrorism strategy.

Douglas Hogg (Conservative, Sleaford and North Hykeham)

rose-

Liam Byrne (Labour, Birmingham, Hodge Hill)

Before I give way to the right hon. and learned Gentleman, I should make clear that my remarks this afternoon will touch on the background to the Bill, its contents, and some of the safeguards that it is vital for the House and another place to debate.

Douglas Hogg (Conservative, Sleaford and North Hykeham)

That is very important and we look forward to hearing what safeguards will be put in place. However, it would be helpful to know why, having had ample time, the Government have never before put the provisions into primary legislation, and have relied always on statutory instruments, which were not subject to proper scrutiny.

Liam Byrne (Labour, Birmingham, Hodge Hill)

That is a fair point, and I will talk about it later in my remarks. Suffice it to say, the United Nations Act 1946 was fairly clear, and it is probably worth reading the relevant clause for the benefit of the House:

"If...the Security Council of the United Nations call upon His Majesty's Government in the United Kingdom to apply any measures to give effect to any decision of that Council, His Majesty may by Order in Council make such provision as appears to Him necessary or expedient for enabling those measures to be effectively applied, including...provision for the apprehension, trial and punishment of persons offending against the Order."

In the eyes of the Government, that was an effective legal base on which to introduce terrorism legislation.

John Gummer (Conservative, Suffolk Coastal)

I am happy that the Government felt that that was the effective legal base. The issue that many of us want to raise is this: if such matters are not debated in Parliament, the disadvantage is that the necessary safeguards are often not put in place. The problem-on both sides of the House-is that the Government seem not to believe that Parliament is the proper place for such decisions.

Liam Byrne (Labour, Birmingham, Hodge Hill)

Parliament is the proper place to debate those safeguards. That is why, alongside this temporary Bill, we published a full Bill that will transpose the relevant orders into statutory legislation. We will debate that question a little later, but it is vital that the House is given a full opportunity to pressure-test the proposals in that second, main Bill.

Humfrey Malins (Conservative, Woking)

As we know, the measures are fairly draconian, but what does the Minister think was the original intention? Was the standard that the Government would have only to say that a person was involved in terrorism, or would they have needed a reasonable suspicion or evidence? What was the standard or test originally and what is it today? Could it be that the original test required something higher?

Liam Byrne (Labour, Birmingham, Hodge Hill)

Perhaps the hon. Gentleman will intervene again to clarify one point. When he refers to the "original test", is he referring to the original test in Orders in Council or in the United Nations Act 1946?

Humfrey Malins (Conservative, Woking)

I might be wrong, but I think I am referring to the original test not in Orders in Council but in the 1946 Act.

Liam Byrne (Labour, Birmingham, Hodge Hill)

The 1946 Act did not set out any such test; rather, it set out a broad power for the Government to introduce measures, including those for

"the apprehension, trial and punishment of persons offending against the Order."

That was the legal basis that was tested by the Supreme Court. The Supreme Court's judgment in taking away the foundation on which the Government had rested was reasonably narrow. The Supreme Court refused to read "expedient" as wide enough to cover reasonable suspicion-that is perhaps the point that the hon. Gentleman was making. Rather, it concluded that it would be wrong to give "expedient" such an expansive meaning where the result is such an interference with individuals' rights.

David Howarth (Liberal Democrat, Cambridge)

That is the crucial point. The Court made its decision because the order undermines fundamental rights. The Court was making the point that the Government should not undermine fundamental rights, and especially not without any parliamentary procedure. The right hon. Gentleman seems to be rearguing his case before the Supreme Court. He does not seem to accept the fact that he lost the case.

Liam Byrne (Labour, Birmingham, Hodge Hill)

The reason why I am here this afternoon is that we lost the case. The point that I was hoping to make is that under the terms of the United Nations Act 1946, which I have read out, it is quite easy to see how the Government proceeded in good faith, because that Act appeared to give quite generous provision for the Government to bring forward proposals giving effect to UN Security Council resolutions.

Neil Gerrard (Labour, Walthamstow)

The real issue is not so much the 1946 Act, but Security Council resolution 1373, the terms of which the Supreme Court referred to in determining that the orders should be quashed. The court talked about reasonable suspicion and whether it was a basis for taking action.

Liam Byrne (Labour, Birmingham, Hodge Hill)

I will address that point slightly later, because it touches on the issue of designation, on which it is important to debate the test that the Government must meet. Just to clarify, the Supreme Court struck down the legal basis for the Terrorism (United Nations Measures) Order 2006. However, two further terrorism orders depend on the same provision in the 1946 Act, which is why they are the subject of the legislation before us today. There is a fourth order-the Al-Qaida and Taliban (United Nations Measures) Order 2006-of which the Supreme Court struck down article 3(1)(b), which concerns United Nations Security Council resolution 1267, and I will touch on that in more depth in a moment or two.

The history of our fight on this front is not long. The asset-freezing regime introduced by the Security Council dates back only to 1999, when it was established as part of the fight against the Taliban. It was quickly extended to include Osama bin Laden and persons associated with al-Qaeda. In the weeks following 11 September 2001, the UN created a separate requirement on member states to freeze the assets involved in terrorism more generally, where individuals were identified by member states. The way in which the Government responded allowed us to act quickly. Using secondary legislation under the 1946 Act, we ensured that our freezing regime was in place by 10 October 2001, just 12 days after the United Nations made its resolution in New York.

The United Kingdom was the first nation to be judged fully compliant with the international standards set by the Financial Action Task Force. Today, around £375,000 in suspected terrorist assets is frozen. That includes around £150,000 frozen under the secondary legislation in the terrorism orders. A much smaller figure is frozen under the Terrorism Act 2006, on which the Supreme Court passed judgment.

When, therefore, the Supreme Court struck down the legal basis on which we acted in good faith, we thought it imperative to act rapidly to present this Bill before the House. Our use of the United Nations Act 1946 was, as I have argued, logical because it says that the Government can make provisions through Orders in Council when "necessary or expedient". As my hon. Friend the Exchequer Secretary has already pointed out, the Court of Appeal agreed with the judgment; the Supreme Court did not, which is why we find ourselves here this afternoon.

David Howarth (Liberal Democrat, Cambridge)

That brings us to the issue of what the Government are doing now about the Supreme Court's judgment. Why have they not simply used the 2001 Act to freeze the assets of such individuals, as Lord Hope in the Supreme Court said specifically that, in his opinion, that Act would apply?

Liam Byrne (Labour, Birmingham, Hodge Hill)

I am not sure whether the hon. Gentleman is referring to the 2001 Act or the 2001 order.

David Howarth (Liberal Democrat, Cambridge)

I am referring to sections 4 and 5 of the Anti-terrorism, Crime and Security Act 2001. Lord Hope said that the freezing regime in that Act applied to the individuals before the Court in the Ahmed case.

Liam Byrne (Labour, Birmingham, Hodge Hill)

We did not do so for the simple reason that that is not a sufficiently general defence. Indeed, the 2001 Act deals with threats emanating from outside the UK, whereas the terrorism order regime that we are seeking to legislate for today touches on threats that emanate from inside the UK, specifically from UK individuals.

David Howarth (Liberal Democrat, Cambridge)

This sounds like a point of detail, but it is crucial to what is happening today. Section 5 of the 2001 Act applies the freezing regime not just to individuals abroad, but to any individual in this country who is assisting that individual. What the Minister says applies only to circumstances where the whole plot is domestic. That did not seem to apply in the cases before the Court; how many other cases are there where the plot is entirely domestic?

Liam Byrne (Labour, Birmingham, Hodge Hill)

I could not speculate on how many cases the security services are monitoring where the threat is entirely domestic, but let me be clear that the provision to which the hon. Gentleman is alluding would not cover UK persons unless we could demonstrate a link to external persons who pose a direct threat to the UK or to UK nationals. In the case of a UK plot, the link would, as the hon. Gentleman says, be absent. The point of the regime is that it is designed to enable preventive action. That is why, as is common in much national security legislation, the thresholds in question include reasonable suspicion.

Douglas Hogg (Conservative, Sleaford and North Hykeham)

The right hon. Gentleman will be familiar with much of the anti-terrorism legislation in place, so he will know that most Acts have provided for at least limited repeal or review of the orders made thereunder. The right hon. Gentleman has known for a long time that he might have to legislate in this context, but his Bill provides for no form of review or appeal against the scope of the freezing orders or, for that matter, against designation. Why did he not make such provisions in the Bill?

Liam Byrne (Labour, Birmingham, Hodge Hill)

I hope to touch on the question of judicial review later in my remarks, but there are three basic points to be made in response to the right hon. and learned Gentleman. First, the Government were relying on the United Nations Act 1946 in good faith. Before the Supreme Court passed judgment, it would not have helped our case to bring legislation forward that showed that we were worried about that or that we wanted to provide for a different legal basis.

Secondly, that judgment having been passed, it is surely right for the Government to bring forward comprehensive legislation to deal with the problem that we are trying to solve. I personally do not think that such legislation should be whipped through the House. Even for a period as short as eight weeks, such proposals, if transposed into legislation, should benefit from Select Committee pre-legislative scrutiny and be subject to a review by Joint Committees, which would take a considerable period. However, because the Supreme Court did not grant a stay in its judgment, about £16,500 linked to about 14 people could, under the Terrorism Act 2006, suddenly be made available. My view was that the best strategy was to put in place temporary legislation to help ensure that the banks kept those assets frozen while the House was able to take the time to put on the statute book a more substantive answer to the Supreme Court's judgment.

Mark Hoban (Conservative, Fareham)

When the matter was discussed with the Treasury last week, plan A was to put a Bill on the statute book in eight weeks. The sudden conversion to greater time being spent and more pre-legislative scrutiny arises simply as a consequence of the Supreme Court's judgment on Thursday to quash the orders. What else has accounted for the Chief Secretary's change of mind?

Liam Byrne (Labour, Birmingham, Hodge Hill)

There is the simple idea that eight weeks is not an ideal time in which to pass the legislation. The legislation could have gone through in eight weeks, but if it is possible to give the House more time to debate it, that is surely right. What changed last week was the Supreme Court's decision not to grant a stay. It would have been unreasonable to ask the banks to keep the money frozen for the amount of time it would have taken the House to give the matter proper consideration.

Andrew Dismore (Labour, Hendon)

My right hon. Friend has published the draft Bill, which is available in the Vote Office, and I welcome his invitation to my Committee to scrutinise it. Were we required to do so, however, it would not take us eight weeks to produce a report on the Bill. I have half scrutinised it already, and I can tell him now what the issues are, including lack of right of appeal and the test to designate someone in the first place.

Liam Byrne (Labour, Birmingham, Hodge Hill)

I look forward to that debate ensuing.

Mark Hoban (Conservative, Fareham)

The route available now to the Government -the emergency Bill today and a longer period of scrutiny-could have been the plan originally discussed between ourselves and the Treasury when the issue first arose. Suddenly, the Government have had a change of heart. We could have had the emergency legislation before us today and the longer discussion period for the Bill, but when the Supreme Court issued its original judgment, the longer Bill was the preferred option. There was no sense then from the Treasury that there was a plan B. It has suddenly arisen as a consequence of last Thursday's judgment.

Liam Byrne (Labour, Birmingham, Hodge Hill)

The answer to the hon. Gentleman is simple. The Supreme Court said that it was willing to consider a stay, but its judgment on Thursday was that it was unprepared to grant that stay. Therefore, the Government had to ensure that assets already frozen under the Terrorism Act-the orders that had effectively been quashed- remained frozen. That gives the House the opportunity to consider in more detail and depth the provisions of the orders that we will seek to put into primary legislation in a much longer period. That debate will produce a better piece of legislation at the end of it.

If passed, the Bill will restore the UK's terrorist asset-freezing regime in primary legislation, but only as a stop-gap. It will allow the House to scrutinise our proposals while eliminating any risk of a gap in our asset-freezing regime. I would like to outline briefly the Bill's effects, before touching on some of the questions around safeguards.

The Bill seeks to maintain the Treasury's power under the Orders in Council to designate persons if they meet both required conditions of the legal test: first, reasonable suspicion that the person is involved in terrorist activity; and secondly; that the designation is necessary for public protection. The effect of a designation is: to forbid dealing with a designated person's funds and economic resources; to forbid making funds or economic resources available to such persons; and to forbid funds or economic resources being made available to a person when the designated person will obtain significant financial benefit. The orders will continue to provide for licences to permit access to funds and to ameliorate the effect of the sanctions. The Treasury will remain open to the full range of legal challenge of its asset-freezing decisions. However, the Bill seeks retrospective provision for the legal authority for banks and any other institution to maintain existing freezes between the date of the Supreme Court judgment and Royal Assent.

Douglas Hogg (Conservative, Sleaford and North Hykeham)

The Chief Secretary said that the Treasury will be subject to the full weight of judicial review, but he will be the first to acknowledge that that is a limited remedy, which falls far short of the specific appeal mechanisms that should be in place to determine the justice or otherwise of particular orders as they affect particular individuals, and the designation of those individuals.

Liam Byrne (Labour, Birmingham, Hodge Hill)

I shall discuss judicial review in a little more detail shortly. The point that I am making is simply that this Bill does not give the Treasury any retrospective protection in relation to decisions made between the handing down of the Supreme Court judgment and Royal Assent.

There are five safeguards that I wish to mention in order to provoke what I think is an important debate about the dimensions of the Bill. Let me begin by dealing with the question of who is included in its ambit. The orders that we propose to underpin ensure that-as I have said-individuals and organisations can be designated only if a reasonable suspicion test is met, and if a second test establishes that action is needed to protect the public. Freezes will be removed from those for whom the legal test fails. The Treasury has a track record of actively reviewing designations and revoking them when they no longer meet the legal tests. Of the 51 United Kingdom designations made under orders to date, 18 have been revoked following a Treasury review-for example, when criminal charges have been dropped, or when an individual is no longer considered to pose a significant threat.

The Treasury must be satisfied that there are reasonable grounds to suspect a person, and reasonable grounds for suspicion must always be based on fact. The facts are provided in a statement of case prepared by the police or the security services, and the basis for action is endorsed by the financial action taskforce. The Treasury does not casually make up a determination of what is in the interests of public protection and what is not. In determining whether a person constitutes a threat, it will consider the advice of the police and the security services.

Andrew Dismore (Labour, Hendon)

Is either the whole or the gist of the factual matrix to which my right hon. Friend has referred available to the person whose assets are to be frozen, in accordance with the requirements of asset-freezing?

Liam Byrne (Labour, Birmingham, Hodge Hill)

Yes, and when individuals wish to challenge decisions that entail closed-source evidence, the special advocacy procedure is also available.

The second question on which I want to touch is whether the proposed acquisition of powers by the Executive strikes the right balance between protecting national security and protecting the rights of our citizens. The Bill aims to ensure that the Government's actions are proportionate, and that they intervene only to the extent that is necessary to disrupt terrorist finance. That approach mirrors international best practice for terrorist asset-freezing, which in turn reflects standards set out by the financial action taskforce. The orders therefore include a licensing regime which ensures that designated persons have access to legal aid and living expenses. A wide range of other expenses can also be allowed when it is judged safe for that to be done.

The licensing regime is now sophisticated and well developed, and helps us to guarantee the proportionality of asset-freezing. Last week, in her statement to the House on licensing, the Exchequer Secretary announced a new approach that will safely lighten the impact of the regime on the families of designated individuals. The Treasury will continue to report to Parliament each quarter on the operation of the asset-freezing regime.

Robert Syms (Conservative, Poole)

Is the test of reasonable suspicion carried out individual by individual or organisation by organisation? If an organisation with 2,000 or 3,000 members were deemed to be a threat to the state, would it be possible to freeze the funds of those 2,000 or 3,000 people, or would they be dealt with on a case-by-case basis?

Liam Byrne (Labour, Birmingham, Hodge Hill)

I am grateful for the opportunity to clarify the position. They would be dealt with on a case-by-case basis, and in line with code A of the Police and Criminal Evidence Act 1984, which provides the Government with guidance on reasonable grounds for suspicion.

Andrew Dismore (Labour, Hendon)

My right hon. Friend mentioned the licensing regime, which governs people's living expenses. I do not see any provision in the draft Bill that provides for an appeal or review at the instigation of the individual concerned if he claims that the amount allowed is not enough. Is there any way in which such an individual can question the amount?

Liam Byrne (Labour, Birmingham, Hodge Hill)

Yes, indeed. Licensing decisions can be, and are being, challenged in court to ensure that they are appropriate.

The third safeguard on which I want to touch is what qualifies an official to make a decision, because it is important for the House to consider the accountability of the decision taker. Decisions are not taken by unelected officials. Asset-freezing decisions are made personally, assiduously and carefully by the Exchequer Secretary, and officials advising her draw their counsel from either the police or the Security Service, and, where appropriate, that may include information from criminal trials. Wider evidence must also be provided, where it exists, but the final decision rests with the Minister.

The fourth question on which I want to touch is transparency and whether decisions are taken in secret or in a transparent manner. It is essential that these decisions are made in a transparent manner, so the orders will continue to ensure that designated persons are informed of their designation along with an explanation, that the public are informed of the person's name and location by a notice on the Treasury's website, and that the House is informed through a quarterly report on the operation of the regime, including information on new designations, reviews and de-listings, the amount of funds frozen and licensing statistics.

Finally, there is the critical question of how decisions taken by the Exchequer Secretary are open to challenge; we might discuss this further later. The orders we seek to underpin provide a clear route by which any individual affected by a designation or a licence can contest the Exchequer Secretary's decision. They can make an application to the High Court to have that decision set aside. Courts can then judge whether the grounds of a decision were reasonable, and can scrutinise the Minister's decision that the designation was necessary for public safety. That scrutiny will include all the material before the Treasury when the decision was made and any material available that should have been considered. The courts have the power to quash Treasury designations if they are found not to have met the strict criteria set out in the orders. At the point of the designation, the Treasury issues a legal expenses licence, which includes legal aid. That means that the designated person is able to seek legal assistance immediately and challenge the Treasury's decision.

Andrew Dismore (Labour, Hendon)

Presumably, that is on the basis of the test of judicial review, according to my reading of the draft Bill. However, as long ago as the 2003-04 Session, my predecessor at the Joint Committee on Human Rights had already indicated that

"judicial review provides only a very limited protection against legislative orders of this kind".

My Committee comes back to that point time and again in other aspects of counter-terrorism policy, too. How can my right hon. Friend be sure that what he is proposing will be human rights compliant, bearing in mind the wealth of evidence to the contrary?

Liam Byrne (Labour, Birmingham, Hodge Hill)

I am confident that the courts have the necessary latitude to consider the two tests that an individual needs to fail to become designated. First, there must be reasonable evidence that they are involved in terrorist activity, and the courts are perfectly able to consider the evidence on which the Minister relied when making that decision. Secondly, the courts are able to consider whether the freezing of an individual's assets is necessary in order to protect the public. Even if there is information from closed sources, procedures are available that ensure that courts are able to review that material, too.

Douglas Hogg (Conservative, Sleaford and North Hykeham)

The right hon. Gentleman is doing his best to reassure the House, but does he understand that there is a fundamental difference between judicial review and reviewing the merits? Judicial review is essentially designed to determine whether the Minister is acting properly, but reviewing the merits is basically designed to determine whether an order is just; and whereas the provisions deal with the former, they do not deal with the latter.

Liam Byrne (Labour, Birmingham, Hodge Hill)

I understand that, but I think that the protection in place is appropriate, because in the first instance we are dealing with whether there is reasonable suspicion-and reasonable suspicion is the right point on which to rely, because we are seeking to act in a pre-emptive manner in order to ensure that the economic resources available to somebody involved in terrorist activity are not used for a terrorist attack or the maintenance of terrorist infrastructure. The test of reasonable suspicion is a lower one, but clear guidance as to what constitutes reasonable suspicion is available. It is important that the courts are able to look at the evidence available to a Minister, on which that Minister relies, and investigate whether they made a proper and rational decision based on it. Thus, a second test also needs to be considered: whether the asset-freezing order put in place is needed for the protection of the public.

Neil Gerrard (Labour, Walthamstow)

Let us be clear that the court will see that evidence but the person who is the subject of the order will not see it, because the special advocate procedure is being used. It is, thus, difficult for that person to produce counter-arguments to the evidence put before the court.

Liam Byrne (Labour, Birmingham, Hodge Hill)

Only closed-source evidence is used in the special advocate procedure, but we must ensure that appropriate checks and balances are in place. I am satisfied that against the test of reasonable suspicion judicial review is an appropriate way to ensure that Ministers act rationally and in the spirit of the law.

I wish to say a word about the sunset clause, which is important for the House to debate. We proposed a sunset clause period in this Bill ending 31 December 2010, but amendments have suggested that that is too long. The House must strike a balance between urgency and careful deliberation. The Bill is designed to solve the urgency problem; given that a stay of judgment was not handed down by the Supreme Court, it is important that assets frozen under the Terrorism Act 2006 remain frozen. Two further terrorism orders rely on the same UN Act for their legal substance and there is therefore a risk that they are vulnerable to being struck down. In addition, there is a problem in respect of those individuals covered by clause 3(1)(b) of the Al-Qaida and Taliban (United Nations Measures) Order 2006. However, these assets are frozen under EC regulations. The only issue with freezing things under EC regulations is that sanctions are not attached, so the Government will introduce secondary legislation to attach sanctions to those EC regulations.

John Gummer (Conservative, Suffolk Coastal)

The Minister is being his usual charming self in explaining these matters, but I wish to press him again. There is a fundamental difference between the courts making a decision as to whether a Minister has acted properly and a decision as to whether a Minister has acted justly. The thing that I do not understand is why the Government do not think it proper to make sure that the issue of justice is involved when an appeal takes place, because that is why we are fighting terrorists. Justice is crucial to the whole argument and not to refer to it is worrying.

Liam Byrne (Labour, Birmingham, Hodge Hill)

I do not want to take a single word away from the opportunity that we will have to debate this legislation at more length. The right hon. Gentleman makes a good point to show why the House needs some time to debate our proposed transposition of the Orders in Council, on which we are relying, into primary legislation. These are exactly the kinds of debates that we need to test. The only point that I should make this afternoon is that the judicial review test is the norm in a number of other national security contexts and courts have demonstrated readily that it can be adapted to ensure an appropriately robust level of scrutiny of ministerial decisions.

Let us return to the final question of a sunset clause. If, as I hope, the House agrees this legislation over the two days, it will need to turn its mind to considering the right procedures for debating the full legislation in order to tease out some of the questions that have just been posed. This legislation equips the Executive with strong powers and I could not be confident that, given the looming elections and recesses, this job of scrutiny could be safely dispatched and a full Bill could be taken through both Houses before 31 July 2010-the date that I believe was proposed by the Liberal Democrats. We are therefore asking for a sunset clause of 31 December, in order to ensure that the draft Bill, published last week, is debated in full.

In conclusion, in these times of severe threat to our national security we cannot afford to fail to take the necessary steps to disarm terrorists or to disarm them of their financial power. Without primary legislation of the kind before the House, we will leave gaps in our defences that will give flexibility and capability to people who intend serious harm to the British public. The Bill provides for the safeguards for the citizen set out in the orders to remain in place. Those safeguards, I would argue, are tried and tested defences against the misuse of power by the Executive. At the same time, the Bill will provide Parliament with the proper time needed to consider and debate permanent legislation in full and I therefore commend the Bill to the House.

Mark Hoban (Conservative, Fareham)

Let me make it clear that we will support the Bill tonight. We agree with the Government that there need to be proper controls in place to prevent terrorists and suspected terrorists from having access to their financial resources and the financial system. However, the Government need to recognise that we are here tonight, pushing through this emergency retrospective legislation, because they failed, despite many warnings, to put the asset-freezing regime on to a proper legislative footing. If they had heeded those warnings, we could have dealt with these issues through the proper consideration of a proper Bill, rather than with the three-clause emergency Bill before us today.

Each of us wants to ensure that our country is protected from terrorist threats. There are many aspects to those threats, but one of the essential elements is finance-the money to buy the plane tickets, to buy chemicals, or to rent a lock-up garage. Although the three orders at the heart of the Bill cover only 33 people and £151,000, that would be sufficient to fund terrorist activity. By denying terrorists or those suspected of participating in terrorist acts access to their funds and the financial system, we are restricting their ability to mount further terrorist acts.

If we freeze the assets of terrorists or suspected terrorists, it helps us to thwart the acts that they were planning, which is something that the Prime Minister emphasised when he was Chancellor. In a speech at Chatham House on 10 October 2006, he set out clearly the importance of this issue, ranking the importance of tracking terrorist assets alongside that of the code breakers of Bletchley Park during the second world war. He said that

"we can create what some will call a modern 'Bletchley Park' with forensic accounting of such intricacy and sophistication in tracking finance and connections that it can achieve, for our generation, the same results as code breaking at the original Bletchley Park did sixty years ago."

He stressed that it was important not just to be able to track assets but to take the right steps to freeze those assets. He went on to say:

"Tomorrow the Privy Council will lay before Parliament a new terrorism order which will give the Treasury the power to stop funds reaching anyone in the UK suspected of planning terror or engagement with terror."

Of course, it was the 2006 order that was quashed by the Supreme Court on 27 January. Now we know what the Prime Minister meant when he went on to say:

"And, as terrorist finance operates on a global scale, we know that we are only as strong as our weakest links."

So what was the weakest link? It is now clear that it was the order about which the Prime Minister boasted. The modern-day Bletchley Park was neutered because the order was quashed.

John Gummer (Conservative, Suffolk Coastal)

I think my hon. Friend is being too kind to the Government. The problem is that this attitude is not limited to these issues-the Government, on almost every issue, would prefer legislation that is not debated in the House and that does not receive proper scrutiny to legislation that goes through the House. My hon. Friend ought not to limit his comments to this situation, serious though it is.

Mark Hoban (Conservative, Fareham)

My right hon. Friend is right. The Government have sought to limit scrutiny of legislation on a series of measures and they have sought to override the interests of Parliament. At the heart of the reasons behind the need for the Bill today is the fact that the Government overrode the interests of Parliament-they circumvented Parliament and they are paying the price for that by having to force through this Bill.

I was referring to the Prime Minister's speech at Chatham House. He went on to say:

"And such is the threat that the message must go out: we will not yield, relax, rest, ever become complacent or lower our guard."

But it seems that the complacency to which the then Chancellor of the Exchequer referred was complacency at the heart of the Treasury, which failed, despite repeated warnings, to put the orders on a proper basis that would withstand legal challenge. As I shall set out in more detail later, the Treasury has had plenty of warnings about the legislative basis for the orders, but it was complacent and it failed to act, thereby putting us in the position that we are in today of needing to pass the legislation to safeguard our nation's interests.

This is another example of the Government's cavalier attitude to Parliament. The orders, which deny fundamental human rights, were put in place without proper parliamentary scrutiny. Let me give my right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer) a few more examples. The Supreme Court announced that it was quashing the orders on the same day that the Exchequer Secretary was brought before the House to explain why there had not been proper parliamentary scrutiny of another Treasury decision that related to terrorism. Later this month, we are to debate a package of reforms that will strengthen the House and weaken the Executive's grip on it, but the relevant order has been written in a way that minimises the chance of those reforms going through. Even in their dying days, the Government have yet to learn that one cannot ignore Parliament. Today's emergency Bill is a reminder of what can happen when one does. If the Government had respected Parliament and put primary legislation in place, they would have avoided having to rush through these emergency measures today.

I do not particularly want to rehearse the details of the case that the Supreme Court heard or the reasons for the Court's judgment, but I think that we need to understand why the Government are having to introduce this Bill today. As I have said, we all recognise the importance that finances and access to the financial system play in terrorism. The three orders that are covered by the Bill restrict the ability of those who are suspected of involvement in terrorist acts to access their money and the system, but that process is intrusive, as Lord Hope made clear in paragraph 38 of the Court's judgment. He said:

"The effect of the regimes that the"

terrorism order and the al-Qaeda order

"impose is that every transaction, however small, which involves the making of any payments or the passing of funds or economic resources whether directly or indirectly for the benefit of a designated person is criminalised. This affects all aspects of his life, including his ability to move around at will by any means of private or public transport."

He went on to say, in paragraph 39:

"For example, HAY has been denied access to any funds since September 2005. His only permitted subsistence support is in kind provided by his wife. She is permitted, by licence from the Treasury, to access welfare benefits, which are the family's sole source of support. But she may spend money only on what the Treasury determines are 'basic expenses'. Until recently she was required to report to the Treasury on every item of household expenditure, however small, including expenditure by her children."

The impact of the restrictions on the lives of the people who are affected by the orders should not be underestimated. In paragraph 31, Lord Hope referred to three suspects-A, K and M-and explained the effects of the orders on them. He said:

"A and K no longer live with their families, and their current whereabouts are unknown. Their solicitor, with whom they have not been in contact for a number of months, attributes their disappearance to the damaging effects upon them and their families of the regimes to which they were subjected by the Treasury. It placed an extraordinary burden on their wives, created significant mental health difficulties and led ultimately to the breakdown of their marriages. M's marriage has also broken down, but he has continued to have a close relationship with his children. He lives at his ex-wife's address where his children live also."

Jacqui Smith (Labour, Redditch)

Given the hon. Gentleman's understandable concerns about the impact of such measures on families, does he welcome, as I do, the Treasury's recent decision not to investigate or impose on spouses restrictions such as those he is concerned about? Many of us share his concerns about spouses, but the Treasury has already acted on those issues.

Mark Hoban (Conservative, Fareham)

I am trying to illustrate the impact that the regime has. The Treasury has relaxed some of the rules and there has been a change in relation to the nature of the three orders. There has also been reform of the system of licensing and exemption. In the 2009 order, there is much greater acceptance of the terms; indeed, the Treasury is trying to migrate a number of the people who are covered by the earlier orders on to the 2009 order.

The judgment continues:

"A, K and M have never been charged or arrested for terrorism related offences."

So the Government have introduced an intrusive regime that denies people who are suspected of crimes some of their fundamental rights under the European convention on human rights, including those under article 1 on protection of property, article 8 on respect for privacy and family life and article 6 on the right to a fair trial. As Lord Brown argued in paragraph 192:

"The draconian nature of the regime imposed under these asset-freezing Orders can hardly be over-stated...Undoubtedly, therefore, these Orders provide for a regime which considerably interferes with the...rights".

He went on:

"Similarly, it is indisputable that serious questions arise as to the sufficiency of protection of the article 6 rights of those designated."

David Howarth (Liberal Democrat, Cambridge)

Before the hon. Gentleman moves on to the fundamental rights aspect of the orders, may I bring him back to an earlier quote from the Supreme Court's judgment, which stated that A and K have disappeared? How does it help the fight against terrorism that people who are suspected of taking part in terrorism simply go underground?

Mark Hoban (Conservative, Fareham)

The hon. Gentleman has a point. I assume, and hope, that while A and K might have disappeared in the eyes of their solicitors and the judges, they have not disappeared in the eyes of the police and security services. Perhaps the Minister can clarify that point later. It would be a perverse reaction to the orders for A and K to disappear without trace.

What was the basis of the orders? As we have established, they were introduced under section 1 of the United Nations Act 1946, which was enacted to enable the implementation of the UN charter and Security Council resolutions. Measures under section 1 of the Act are introduced by Orders in Council, so there is no primary legislation or secondary legislation under either the affirmative or the less onerous negative procedure. So those fundamental breaches of human rights were put into force by the Executive-the Government-and not by Parliament. The Supreme Court has ruled that the orders go beyond what is required to implement the relevant Security Council resolution and are therefore ultra vires, but how did they go beyond the resolution? It was because of the reasonable suspicion test. Article 4(2) of the Terrorism (United Nations Measures) Order 2006 states:

"The conditions are that the Treasury have reasonable grounds for suspecting that the person is or may be-

(a) a person who commits, attempts to commit, participates in or facilitates the commission of acts of terrorism".

The Court took the view that these provisions exceed the powers given to the Treasury under section 1 of the 1946 Act. In paragraph 61 of his judgment, Lord Hope said:

"I would hold that, by introducing the reasonable suspicion test as a means of giving effect to"

resolution 1373,

"the Treasury exceeded their powers under section 1(1) of the 1946 Act. This is a clear example of an attempt to adversely affect the basic rights of the citizen without the clear authority of Parliament"

Douglas Hogg (Conservative, Sleaford and North Hykeham)

The fact that the Treasury adopted the reasonable suspicion test, which has proved unsatisfactory in the eyes of the Supreme Court, demonstrates the lack of wisdom of legislating by way of secondary legislation. Does my hon. Friend agree that if this matter had gone before the House in primary legislation, there would have been substantial protest from us and, no doubt, other right hon. and hon. Members regarding the use of the reasonable suspicion test, which is a low standard of proof?

Mark Hoban (Conservative, Fareham)

My right hon. and learned Friend makes an important point, and it was because of the lack of parliamentary scrutiny that the Supreme Court reached the conclusion that it did on the orders.

Let me continue to quote from paragraph 61. It goes on to say that

"fundamental rights cannot be overridden by general or ambiguous words. The absence of any indication that Parliament had the imposition of restrictions on the freedom of individuals in mind when the provisions of the 1946 Act were being debated makes it impossible to say that it squarely confronted those effects and was willing to accept the political cost when that measure was enacted. In my opinion"

the terrorism order

"is ultra vires section 1(1) of the 1946 Act".

So if there had been a proper parliamentary process that had sanctioned depriving those who were suspected of involvement in terrorist acts of their rights, the Supreme Court would not have quashed the orders, but in the absence of that process, the Court felt that the powers were outside the scope of the Act.

As several right hon. and hon. Members have said, there were plenty of warnings. In addition to the way in which the case was pursued through the courts, there were three other warnings to the Government about the risk that they were taking in using the 1946 Act as the basis of the terrorist freezing orders. Those warnings were the Foreign Affairs Committee report on Sierra Leone in 1999, the Newton committee report of 2003, and the precedents used in other common law jurisdictions. I shall say a little about them to demonstrate that the Government had the warnings but chose not to hear them.

The Foreign Affairs Committee looked at how the Government imposed sanctions on Sierra Leone using the 1946 Act, and highlighted the need to use primary legislation to underpin the future use of those powers. In its 1999 report, the Committee drew attention to the way in which a resolution of the Security Council about the imposition of sanctions against Sierra Leone had been implemented by an Order in Council, but the Security Council resolution did not define Sierra Leone, leaving the extent of its application ambiguous. The Order in Council defined it in terms that removed any ambiguity but arguably went beyond the scope of the resolution. In the same way, in the present order the Government arguably went beyond the scope of the Security Council resolution that they were seeking to implement.

In its report, the Committee said that the way in which the Order in Council was dealt with was unacceptable as it was subject to no parliamentary procedure. Had it been necessary-this goes back to the point made by my right hon. Friend the Member for Suffolk, Coastal-for a Minister to appear before a Standing Committee on Delegated Legislation or to defend the order on the Floor of the House of Lords, it was likely that wider attention would have been given to its true meaning and extent.

In paragraph 23 of its report the Select Committee recommended that

"the United Nations Act 1946 be amended so that delegated legislation made under section 1 was subject to affirmative resolution in both Houses of Parliament."

So the Foreign Affairs Committee highlighted the problem that we see today, where the order overreached the Security Council resolution, and recommended that the affirmative resolution procedure should be used in the future.

A second warning arose from Lord Newton's review of the Anti-terrorism, Crime and Security Act 2001, which conferred powers on the Treasury to make freezing orders on residents of a country or territory outside the UK. Comment has already been made about the number of Acts on the statute book that could be used to freeze assets. A point that Justice made in its submission on the Bill was to ask why parts 1 and 2 of that Act and parts of the Terrorism Act 2000 and the Prevention of Terrorism Act 2005 could not have been used in place of the Bill. It would be helpful if the Minister addressed that issue when winding up the debate, as it has triggered widespread concern.

The 2001 Act was reviewed by a Committee of Privy Counsellors chaired by Lord Newton. Lord Newton said in his report that powers under part 2 were unlikely to be used while the 2001 order was in place. He argued in his conclusions that

"freezing orders for specific use against terrorism should be addressed again in primary legislation, based on the well-tested provisions of the Terrorism (United Nations Measures) Order 2001".

This is another warning that the basis of the orders should be explicit in primary legislation. In retrospect, the 2001 order might not be seen as robust as later iterations, but the point that Lord Newton made about primary legislation is still valid.

The third warning was the way in which other nations have implemented the orders. Having originally opted for implementation using their equivalents of the 1946 Act, New Zealand and Australia subsequently set up the orders using primary legislation. Lord Hope responded to this by stating in paragraph 50 of the judgment:

"The regimes that both Australia and New Zealand have introduced by means of primary legislation are exacting. But they contain various, albeit limited, safeguards and in so far as they interfere with basic rights of the individual that interference has been expressly authorised by their respective legislatures."

That is not the route that the Government have chosen to go down.

So there were warnings from the Foreign Affairs Committee and Lord Newton's committee and the precedent from other common law jurisdictions that primary legislation was the preferred route, but the Government chose to ignore those and we have to put through this emergency legislation today.

No one should be under any illusions about the gravity of the measures in the Bill. Because the Supreme Court quashed the orders on Thursday morning, those subject to the orders could have accessed their bank accounts and the financial system with impunity since then. The Treasury sought the co-operation of the financial services sector to ensure that this could not happen, even though those subject to the order have the same right as you and I to use those assets.

I should like to ask the Minister about the period between the Supreme Court's quashing of the orders on Thursday and the Bill gaining Royal Assent. Can she confirm that the provisions in clause 2 are sufficient to protect banks and other financial institutions from claims made by those subject to the freezing orders if, between 4 February and Royal Assent, they sought to withdraw money from their bank accounts? Has the Treasury granted an indemnity to any financial institution covered by this?

Where the Treasury has been given powers to grant further directions in clause 1(3)(a), can the Minister clarify under which order-the 2001 order, the 2006 order or the 2009 order-new directions would be issued where a terror suspect has been recently identified?

The final point that I want to raise with the Minister, to which I will return at greater length in the Committee stage, is the sunset clause. As I indicated in an intervention on the Chief Secretary, until last Thursday there was only one plan in town. It was to publish a longer, substantial Bill that would put the freezing orders on a proper footing through primary legislation, with a view to completing the parliamentary process by no later than 31 March 2010. That is the document that was published last week.

The view then was that that would give time for adequate scrutiny and it would have allowed Parliament to debate the measures properly. That is the offer that was on the table, and we reiterated to the Exchequer Secretary last Thursday that we were content to continue down that route, as well as participating in discussion of the Bill today. We believe it is right for this to happen, and it would reduce the period during which the Government were dependent on this emergency Bill. That is the basis of the amendment that we will move later.

The issue demonstrates the importance of reviewing the patchwork of anti-terrorism legislation. In its submission, Justice asked why parts 1 and 2 of the Anti-terrorism, Crime and Security Act 2001 and parts of the Terrorism Act 2000 and the Prevention of Terrorism Act 2005 could not be used in place of the Bill. Surely it is time to move beyond a piecemeal approach to national security legislation, and consolidate the legislation and ensure that it is compatible with fundamental rights and freedoms.

The Bill is necessary, because without it those suspected of involvement in terrorist activity could have been free to use their financial assets and the financial system. We do not know how they would have used this freedom, but it would have been reckless for the Government not to take steps to restrict that access, given the Supreme Court's ruling. But in supporting the Government's actions today, we cannot and will not ignore the fact that the Government are in this mess because they failed, despite all the warnings, to put the orders on to a proper basis. To deny people's right to the freedoms that we take for granted, they bypassed Parliament and failed to seek Parliament's approval for the action that they took. The Government's repeated failure to respect Parliament has led them to the position that they are in today.

In 2006 the Prime Minister said that

"as terrorist finance operates on a global scale, we know that we are only as strong as our weakest links.".

Today proves that the weakest link was the Treasury, the Department that the Prime Minister ran. It was the Department that failed to put the orders on to a proper footing. It failed to respect Parliament. It failed to respond to the warning signs from home and abroad. In passing the Bill tonight, we are bailing out the Prime Minister and getting the Government out of a hole, but it is the right thing to do to safeguard our country.

Jacqui Smith (Labour, Redditch)

I welcome the Bill and the speed with which the Government have introduced it. Nobody would want any Bill to have to pass all its stages in one day, and for the House to miss the opportunity of pre-legislative scrutiny, but I am wholly convinced that the serious risk of no effective provisions being in place for terrorist asset freezing following the Supreme Court decision and, significantly, following the Supreme Court's refusal to suspend that judgment, justifies the unusual action being taken by the Government today.

Opposition Members have made much about the Government somehow failing to heed the warning signs of legal action against the orders, but the High Court's quashing of the order in early 2008 was overturned later that year by the Court of Appeal.

Douglas Hogg (Conservative, Sleaford and North Hykeham)

I can understand the right hon. Lady taking a legalistic point of view, but surely she should also go to the high ground and look back to 2001 and Lord Newton's Committee, or to 2004 and her hon. Friend the Member for Hendon (Mr. Dismore) and his Joint Committee on Human Rights. They did not interpret the matter on legalistic grounds; they based their contention on the fact that the measures should have been in primary legislation on broad, ethical grounds.

Jacqui Smith (Labour, Redditch)

My point is that there was not only significant legal advice that the 1946 Act was a legitimate ground for introducing Orders in Council in order to translate UN Security Council resolutions, but legal justification between October 2008 and the point at which the Supreme Court upheld once again those individual appeals. The idea that every time a piece of legislation-primary or secondary-faces a challenge in the courts, the Government should rush to Parliament to pass separate legislation in order to mitigate the challenge is ridiculous. If anybody would like to estimate the time that we would spend here legislating on that basis, they would find that none of us would get home on any night at all.

As my right hon. Friend the Chief Secretary to the Treasury said, we continue to face a serious threat from terrorism; and, despite the hard work of our police and our security and intelligence agencies at home and abroad, recent events have demonstrated that the threat remains from the al-Qaeda leadership, their immediate associates, their affiliates throughout the world and from rogue individuals who espouse their view and ideology. The scope and nature of that threat mean that we need a broad approach to tackling it. With the rule of law and the protection of human rights at its heart, the first priority of any counter-terror strategy must be to catch and prosecute those responsible for planning, facilitating and carrying out attacks, and to take action through our courts. The almost 200 successful convictions since 2001 are evidence of our commitment to, and success in, pursuing that route.

However, the threat is such that we should also use the broadest range of methods, including non-prosecution where necessary, to disrupt activity and make the UK as hostile as possible to terrorist planning and facilitation. An important element of that must be cutting the finance that funds attacks and networks. Terrorists need money to plan and carry out attacks, although, as my right hon. Friend identified, it is worrying how little an amount can cause terrible damage and loss of life. As he said, it is estimated that the 7/7 attacks on London cost £8,000. The improvised explosive devices that are used to attack our forces abroad can cost much less even than that.

Terrorist organisations also need money to sustain networks and provide financial support to terrorists and their families. The sums are likely to be greater, but they provide for the infrastructure of terror. We need to ensure that those who radicalise individuals and peddle the ideology that supports terrorism are tackled as they raise the funds for such work. It is suggested that work to limit funding internationally is successfully hampering the work of al-Qaeda. That activity is welcome, but it shows how important action on terror financing can be.

In recent years, that work has been scaled up throughout Government, involving the Serious Organised Crime Agency and the private sector. Work is in place to deter terrorists from using the financial system, to detect them when they do and to use financial tools to disrupt them. I understand that financial intelligence and investigation tools are used to support all counter-terrorist investigations, and we have excellent, specialist terrorist financial investigation capacity in this country.

Asset freezing is only one element of that work, but it is important. As my right hon. Friend said, our asset-freezing regime is based on international recognition, through the UN, of its significance in helping to counter the terror threat. As we have heard, the UN maintains under Security Council resolution 1267 a list of individuals and entities connected to al-Qaeda and the Taliban.

Security Council resolution 1373, adopted in September 2001, broadened that approach, recognising that individual states needed to take action against those within their territories who funded terrorism, even if they were not on the UN-held list. Given the fragmented terror threat and the growing phenomenon of individuals who self-radicalise or act alone following radicalisation, the legislation before us seems an important and appropriate development of the asset-freezing regime. That may well explain, as my right hon. Friend and my hon. Friend the Exchequer Secretary have explained, why the Anti-Terrorism, Crime and Security Act 2001, which confines itself to restraints on terrorists or acts that have been inspired overseas, may be insufficient. Given the fragmented terror threat, it is not inconceivable that wholly domestically organised and determined terrorist threats and networks may be operating, and we need an asset-freezing tool to use against them, too.

At the heart of the Supreme Court ruling was neither the principle of asset freezing nor even its practice in the UK, although the judges rightly commented on the onerous requirements, as other Members have said. At its heart was the translation of Security Council resolutions into UK law.

David Howarth (Liberal Democrat, Cambridge)

It is important for the House to understand why the Supreme Court did not consider the human rights aspect of the legislation. It thinks, and thought, that, because of the al-Jedda case, the implementation of Security Council resolutions takes precedence over all human rights under the European convention. That seems to be a wholly different position from saying that it is all right in human rights terms to pass such legislation.

Jacqui Smith (Labour, Redditch)

I was not making that argument; I was arguing that the Supreme Court made its decision on the basis of the translation of UN Security Council resolutions into UK law, rather than on the detail of the legislation's implementation or even on some of the other questions, which Members from all parts have rightly raised.

Douglas Hogg (Conservative, Sleaford and North Hykeham)

The right hon. Lady is right in part, but she will also accept that Lord Hope's judgment, for example, was to the effect that the provisions in the orders were, in a democratic state, incompatible with civil and political rights.

Jacqui Smith (Labour, Redditch)

Surely the key element is that, given the significant and onerous nature of the proposals, it was wrong to implement them without sufficient parliamentary oversight and scrutiny. The Government are attempting to put right the first stage of that today.

Given the seriousness of the threat, and given that there was legal advice to support the use of the 1946 Act, it is understandable that the Government thought it suitable. Its use has been ruled ultra vires, and the right response is to bring forward primary legislation, first, as quickly as possible in order to plug the gap.

Members from all parts of the House, but Opposition Members in particular, have criticised the speed with which the legislation has been brought forward, and I am sure that the Government would have liked more time for parliamentary consideration and external consultation. That, presumably, is why they asked the Supreme Court to suspend its decision: to maintain the asset-freezing orders in place while Parliament had the chance to consider the issue. That request was of course dismissed. It would be useful if my hon. Friend the Exchequer Secretary could confirm that its dismissal has potentially freed up considerable assets for terrorist use, enabling the people whom the orders covered to make free use of those assets and any financial institutions that they like. It is also worth pointing out that had not the Government moved quickly with this proposed emergency legislation, the financial institutions that have implemented the freeze could have been placed in a position whereby legal action could be taken against them.

If the Supreme Court decision is really about the will of Parliament, it is a bit hard to understand why Parliament could not be given sufficient time to consider the implications of the proposed legislation. Rightly, the Bill is temporary: its provisions will fall by the end of 2010. We should have more time to consider the nature of the provisions and the safeguards in place. This asset-freezing regime is onerous on individuals and their families. I am pleased that in introducing a new order last August to replace the 2006 and 2001 orders, the Government ensured that any restrictions are more carefully tailored to areas of genuine concern. They have made the safeguards more explicit and freed up the situation of spouses and families. Furthermore, in the last quarter, as reported in last November's report to the House, 35 licences had been issued. These licences ensure that living requirements and finance for legal assistance can be met while other assets are frozen. I hope that my hon. Friend the Minister will take the opportunity, as far as she is able, to outline those restrictions and safeguards and tell the House what kinds of licences have been issued to ensure exemptions for necessary expenditure for living costs.

It is clear that dealing with this will take more time than we have today. That is why I welcome the publication of the pre-legislative scrutiny of the draft Terrorism Asset-freezing Bill, which was published at the same time as this Bill, and which gives Committees of the House, hon. Members and external stakeholders a proper opportunity to look in detail at the provisions, safeguards, restrictions and processes that are being put in place. However, I hope that consideration of that Bill will be brought forward as quickly as possible so that the House has the opportunity for the important full scrutiny. The scale of death and destruction willed by terrorists costs money. The building of networks comes at a price. In doing the job of countering this threat, it is necessary to recognise that reality and use a range of tools to tackle it. Asset freezing is an important tool in doing that, and we must ensure that those whom we task to keep us safe have it at their disposal. The Bill will ensure that protection in the short term; for that reason, I hope that we pass it today.

Vincent Cable (Liberal Democrat, Twickenham)

We have heard three speeches in support of the Bill. I have to say that Liberal Democrat Members are not yet persuaded, but we will listen to the remainder of the arguments.

Under Security Council resolution 1373, the UK Government are obliged to take action to prevent and suppress the financing of terrorist acts and to freeze without delay the funds or other financial assets of persons who commit or attempt to commit terrorist acts. If there were purely a technical problem in giving effect to that resolution, we would all be bending over backwards to help the Government to achieve their aim; certainly, we do not want floods of money going into the acquiring of terrorist weaponry. However, that is not the issue; the issue is the position of the Supreme Court. I do not usually read Supreme Court rulings-I spend my time reading much more exciting things such as tables of economic statistics-but I was amazed by the trenchancy of the language, with references to "draconian", "drastic", "oppressive" and "paralysing" activities within the framework of these orders. The Bill has been described as very bad legislation. More importantly, in some ways, the legislation- not in our view but in the view of the Supreme Court justices-is unnecessary. That is why we remain highly sceptical about its validity.

More positively, I appreciate the fact that the Government have consulted quite extensively over the past few days. I have been consulted more extensively than at any time in my past five years in this job-even more than I was at the height of the banking crisis. In my more generous moments, I think that a spirit of consensus has broken out within Government; in my more cynical moments, I think that the Government are in a hole and desperately trying to get everybody on board. However, we will approach this constructively. My hon. Friend the Member for Cambridge (David Howarth) and I have tabled a series of amendments that are intended to be constructive and to deal with what we think are the defects in the Bill, particularly the lack of clarity in the safeguards governing reasonable suspicion and the appeals process.

I pay tribute to the non-governmental organisations, Justice and Liberty, which have produced at very short notice-it is only 24 hours since the legislation was published in draft form-extremely impressive and detailed notes cross-referencing the legal points. That is particularly helpful to people like me who are not lawyers and tend to approach these complex legal and constitutional issues with all the enthusiasm of an ordinary member of the public faced with a mathematical economic treatise.

In terms of the nature of the problem to be addressed, let me deal first with the question whether this legislation is necessary. We have had an extended discussion, prompted by my hon. Friends the Members for Somerton and Frome (Mr. Heath) and for Cambridge, about whether it would be possible to use the alternative powers that are available, with a lengthy exchange on the Anti-terrorism, Crime and Security Act 2001. I was surprised to see Ministers swatting aside the judgments of Supreme Court justices as if they had perpetrated some elementary undergraduate error in failing to understand what the existing Acts were all about. It is possible that Lord Hope and his colleagues do not have a basic understanding of the law, but that strikes me as being rather unlikely. However, let us assume for the moment that they are wrong-that they completely misinterpreted what the 2001 Act was all about and failed to realise that there were limitations on its use. In that context, it is worth quoting what Justice said in its summary of the alternative legal powers:

"there are already a great many provisions in UK law that give effect to the government's obligations under resolution 1373. These include sections 14-19 of the Terrorism Act 2000 (criminalising the use of funds or other property for purposes connected with terrorism); Parts 1 and 2 of the Anti-Terrorism, Crime and Security Act 2001"

and

"the Prevention of Terrorism Act 2005 (control orders). Even the provisions of the Proceedings of Crime Act 1998 may be used to seize funds that result from terrorist activity."

I hope that Ministers will give us a clear explanation as to why these powers are not usable or not appropriate, because the Supreme Court evidently thinks that they are.

John Gummer (Conservative, Suffolk Coastal)

Does the hon. Gentleman agree that the fact that there is a significant amount of doubt about this brings us back to the point that if the Government had introduced in the House the provisions that they put through outside the House, then precisely these issues could have been raised by Members of Parliament, which is the way that Parliament ought to be used?

Vincent Cable (Liberal Democrat, Twickenham)

I am sure that that is right. The right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg) referred to the fact that the Supreme Court justices had described this whole process as an offence against democracy, and that is a striking way of summarising what the right hon. Gentleman says about Parliament being the democratic forum in which these debates are properly conducted.

Let me turn to the reasons why the Supreme Court justices considered these powers, which we are legitimising for a further period-the best part of a year-as draconian, drastic, oppressive and paralysing, and go over some of the points that were made. The Government quoted Lord Brown in support a few moments ago because he ruled in their favour on one order. None the less, Lord Brown said in his comments:

"The draconian nature of the regime imposed under these asset-freezing Orders can hardly be overstated. Construe and apply them how one will-and to my mind they should have been construed and applied altogether more benevolently than they appear to have been-they are scarcely less restrictive of the day-to-day life of those designated (and in some cases their families) than are control orders. In certain respects, indeed, they could be thought to be even more paralysing."

As for the orders' impact on family life, the former Home Secretary, the right hon. Member for Redditch (Jacqui Smith), intervened a few moments ago to say that the Government had made an announcement to the effect that the family provisions would be relaxed. However, as I understand it, they are being enforced currently, and were described by a Supreme Court justice in the following terms:

"The overall result is very burdensome on all the members of the designated person's family. The impact on normal family life is remorseless and it can be devastating".

That language is not moderate, especially coming from people in a profession normally associated with understatement.

The deputy president, Lord Hope, concluded in discussing the orders:

"The consequences of the Orders that were made in this case are so drastic and so oppressive that we must be just as alert to see that the coercive action that the Treasury have taken really is within the powers that the 1946 Act has given them."

That is strong stuff. We should take note of it, not merely of the purely legal points being disputed.

We return to two central principles. The first is the point about reasonable suspicion. The notes prepared for us by Justice and Liberty state that other countries with similar approaches to the law have also grappled with this problem: what is the right balance between absolute proof and reasonable suspicion? Even the Australians, who could hardly be accused of being soft on terrorism and who have had to cope with bombings in Bali and elsewhere, apply a tougher standard of proof. A Minister must be persuaded that an individual is involved in terrorism. That is a somewhat stricter test than reasonable suspicion, which is why my colleague and hon. Friend the Member for Cambridge and I have tabled amendments to strengthen the safeguards on that point.

On appeals, it is worth recalling again what Lord Rodger, another justice, said:

"the harsh reality is that mistakes in designating will inevitably occur and, when they do, the individuals who are wrongly designated will find their funds and assets frozen and their lives disrupted, without their having any realistic prospect of putting matters right."

That is why appeals should be heard on issues of substance and not simply of procedure.

Douglas Hogg (Conservative, Sleaford and North Hykeham)

rose-

Vincent Cable (Liberal Democrat, Twickenham)

I know that the right hon. and learned Member for Sleaford and North Hykeham and the right hon. Member for Suffolk, Coastal (Mr. Gummer) have been trying strenuously to communicate in this debate, so I will give way.

Douglas Hogg (Conservative, Sleaford and North Hykeham)

I am grateful to the hon. Gentleman. Will he also keep in mind page 19 of the 2004 report by the Joint Committee on Human Rights? It makes the point that judicial review, which is the only protection afforded by the draft Bill and indeed the order, affords

"only a very limited protection against legislative orders of this kind, except where they contravene European Community law."

We must recognise that judicial review per se is not an examination of the merits of an order.

Vincent Cable (Liberal Democrat, Twickenham)

Exactly. That is the point that I made, and I am grateful for the clarification.

It is to the Government's credit that they have acknowledged the problems arising from the case and are now discussing a sunset clause. There is a debate to be had about what a realistic period is. The Government propose 10 months, and I think that the Conservatives have proposed until the end of March. It is difficult to see how a Select Committee could do a proper review or both Houses could take a proper approach to the review of legislation by the end of March.

Equally, though, one should not overestimate how much time such things take. Reviews can run concurrently rather than consecutively, and the hon. Member for Hendon (Mr. Dismore) helpfully suggested that his Committee works fast. We are not at all persuaded that 31 July is too far away for a proper scrutiny of legislation with proper debate and all the necessary stages in Parliament.

In conclusion, problems arise when legislation is introduced very rapidly on a 24-hour basis. Long before I got involved in politics-in the year I got married, which was just over 40 years ago-my wife and I discovered while we were making wedding preparations that her family and most of our friends who were British subjects were being declared stateless by the British Parliament, because they happened to be east African Asians. On the basis of a panic and "facts" that subsequently turned out to be wholly incorrect, they were, in effect, systematically stripped of their British citizenship.

That was not the first case of fast-track legislation, and the Bill before us will not be the last, but we must learn from experience that legislation taken in great haste and panic is often very bad legislation. Liberty's evidence on emergency legislation to the Constitutional Committee sums up not just the Commonwealth Immigrants Act 1968 but the Bill perfectly:

"When legislation is introduced into Parliament and passed within a few weeks or even days it is impossible for Parliament fully to analyse and debate the proposals put before it. It is also extremely difficult for NGOs and civil society to have the time to examine the proposals and brief parliamentarians on the likely impact...Legislation drafted in haste will inevitably contain errors, be they minor or more substantial. Even more worryingly, the policy behind such legislation will at best be ill-thought out and at worst may be motivated by political objectives to be 'seen' to be responding to an event or judgment."

That is exactly where we are today.

Neil Gerrard (Labour, Walthamstow)

It is good that for the first time, we are debating what is in the orders, at least to some extent. It has been mentioned that we should have had an opportunity to do so before now. I recall from the passage of the Counter-Terrorism Act 2008 that that Bill included a section dealing with asset-freezing orders and some aspects of how they could be challenged. The right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg), the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) and I tabled some amendments that would have permitted us to debate those clauses, but as so often happens on Report, as a result of the timetabling motion, our amendments were never reached, so no debate on the orders ever took place.

What we are being asked to do today is to overturn the Supreme Court's decision. It is important to recognise that that does not simply involve dealing with a technical error. The Supreme Court did not overturn the orders on a technical issue; it quashed them in strong language, as was pointed out. In this emergency legislation, we are effectively bringing into law orders that were quashed by the Supreme Court in strong language.

It is interesting to read the retrospective bits in the Bill. One will protect the banks during the period from the Supreme Court's decision to Royal Assent. What would the position be of somebody who gave money during that period to someone who was subject to a freezing order? Would they have any protection?

The orders put into effect UN Security Council resolution 1373, which concerns preventing and suppressing the financing of terrorist acts and criminalising

"the wilful provision or collection...of funds...with the intention that the funds should be used...to carry out terrorist acts".

We used the United Nations Act 1946 to bring the orders into force. They allowed the Treasury to designate individuals against whom measures should be taken, and the Bill will keep them in force. It then becomes a criminal offence for any person to make available any funds-there is no de minimis level-to the designated person. Licences are granted to allow the designated person to receive payments for their daily living expenses, but the operation of those licences has been such that those people and their families have had to produce detailed accounts for the Treasury of every penny that they have spent.

I hope that, when we eventually debate the draft Bill after it has been published, we will look into the need for a requirement to consider whether there is evidence that could lead to a prosecution before using the designation mechanism. As it stands, there is no necessity to establish a connection between the designation and any suspicion of involvement in terrorist activity.

The description of the orders as "draconian" by the Supreme Court has already been mentioned, as has their effect on the individuals concerned. Sometimes, their effects have been quite astonishing. For instance, in 2008, some people who were the subject of these orders wrote to the Treasury to ask whether it was permissible under the orders to buy new boots, trainers and shoes. The Treasury responded that this raised complex issues about what constituted a basic expense as opposed to an extraordinary expense, and that these were matters for which ministerial approval would be required. That was the extent to which the orders were impinging on the lives of the individuals who were subject to them.

Robert Syms (Conservative, Poole)

Under the legislation, no one is allowed to give economic assistance to someone placed under such an order. That leaves the individual or family totally dependent on the regime that the Treasury has set up. Anyone who gives such assistance is at risk of becoming the subject of an order themselves.

Neil Gerrard (Labour, Walthamstow)

Absolutely; it is a criminal offence to give such assistance.

There were queries about whether paying for an Oyster card or allowing someone to borrow a car would constitute giving them economic assistance. There was constant correspondence between the solicitors representing those individuals and the Treasury to try to determine exactly where the boundaries of the orders lay. Any new legislation must ensure that there is absolute clarity on what people are permitted to do while under designation, and on what constitutes a criminal offence.

The important issue of the basis on which people are designated-the ground of reasonable suspicion-has been raised a number of times. Lord Brown said in another case in which he was discussing this standard of proof:

"To suspect something to be so is by no means to believe it to be so; it is to believe only that it may be so".

We are talking about a very low standard of proof. In quashing the order, the Supreme Court judges' statements made that clear. Some of the arguments in this debate have suggested that the Supreme Court's reasons related to the use of the United Nations Act 1946. I suggest that there is far more to it than that.

Douglas Hogg (Conservative, Sleaford and North Hykeham)

The hon. Gentleman is making an interesting point about reasonable suspicion. Perhaps he will accept this analogy. Police officers can arrest on reasonable suspicion, but a charge requires a much higher level of proof, and a conviction requires a yet higher one. In other words, the ground of reasonable suspicion is right at the lowest level of the hierarchy.

Neil Gerrard (Labour, Walthamstow)

That is clearly the case, and that is why I am worried about the use of reasonable suspicion in imposing sanctions on individuals. We could be dealing with people about whom, yes, there might be a suspicion, but there is no proof. That is an important distinction.

In dealing with the question of reasonable suspicion, the Supreme Court had quite a lot to say. Lord Hope said that Security Council resolution 1373 was not phrased in terms of reasonable suspicion. He said that it referred to persons who

"commit, or attempt to commit, terrorist acts".

He said that transposition of the direction into domestic law raised questions about what was necessary or expedient. He clearly said:

"It was not necessary to introduce the reasonable suspicion test in order to reproduce what the Security Council resolution requires."

That was echoed in comments made by the other Supreme Court judges.

The Bill will bring in temporary legislation that will be in place for a few months at most. The draft Bill, which has been published, will produce more permanent legislation. We are not here this evening to debate the draft Bill, but it is important that it should be debated in great detail at the appropriate time, and that the issues that we have debated to some degree today-reasonable suspicion, safeguards and the appeals system, for example-should be thoroughly considered when the draft Bill is debated.

This Bill will clearly go through this evening, but I would not want it to be followed by a rush to permanent legislation. That is what would happen if we tried to get the legislation in place by 31 March. Whatever permanent legislation we introduce must be thoroughly examined. It has been pointed out endlessly today that one of the failings of the process has been that the orders were never scrutinised by Parliament in the first place. We should not make a similar mistake when introducing the permanent legislation that will follow these measures. We should not try to push it through in a hurry without proper pre-legislative scrutiny, without proper examination by a Bill Committee, or without a decent debate on Report and in the other place.

It is important to include a sunset clause in the Bill. Legislation such as this, which does virtually nothing except overturn a Supreme Court ruling-it is retrospective legislation in many ways-must be put in place only on a temporary basis. It is also important that the House should leave itself reasonable time to get the permanent legislation in place. I would certainly not be happy with any attempt to rush it through before 31 March, because that would not give us enough time. Nor am I convinced that legislation of this nature would best be dealt with in the first weeks of a new Parliament. I am therefore not unhappy with the sunset clause as it stands, because it is desperately important to give this whole matter the thorough examination that it simply has not had so far.

Robert Syms (Conservative, Poole)

The challenge to strike a balance between fighting against terrorism, which we all know to be a major threat, and preserving our freedoms is one of the most difficult that the House faces. Some years ago, I was on a delegation to Russia. We were guests of the Duma, and we talked to a number of its members a short while after the Beslan outrage in which a number of children were taken hostage. The Russians asked us how we got the balance right, and I do not think that any of the British parliamentarians could say, hand on heart, that they were sure that we had ever done so.

Throughout the years when we were dealing with IRA terrorism and, more recently, as we have tried to deal with the worldwide problem, it has been difficult to strike the right balance. It is clear, however, that there is a better chance of doing so if we in Parliament-here and in the other place-have proper debates on these matters. Sometimes, we have legislated in haste, for understandable reasons, and have not got the resulting legislation entirely correct. In other areas of legislation, such as the legislation to enable local government to fight terrorism in various ways, the law of unintended consequences has come into play. Legislation passed through this House very quickly-probably under a guillotine-was used for outturns and objectives that Parliament did not intend. It is a pity that we are back today because the Government did not originally introduce a Bill to overturn the Supreme Court ruling.

The Supreme Court has not been going that long, and I suspect that there will always be some tensions between such a body and Parliament. Nevertheless, given its short history, it is a pity that we are already having to legislate to change its decision. As hon. Members have said, that decision was well considered and the judgments raised some important concerns. As I am not a lawyer, I will not go into those tonight.

When we are fighting terrorism, we have to act quickly and, yes, cutting off funds is an important component. However, we must also have a regime that is fair. As is the nature of things, reasonable suspicion is-as we have heard-a relatively low test. The world being as it is, sometimes we get the wrong person. People can end up caught in web without being involved in terrorism, but these proposals are so draconian that that would have a major impact on their family life.

Douglas Hogg (Conservative, Sleaford and North Hykeham)

That is an interesting point, because one only has to ask oneself what review mechanism is available for the person caught in the web. All the Government would have to do is satisfy the court that there was reasonable suspicion that the person was involved in terrorism, not that actual evidence existed of that involvement. It would be very difficult for a suspected person to challenge the finding of the Treasury.

Robert Syms (Conservative, Poole)

Of course that would be very difficult. One suspects that some of these individuals are not necessarily wealthy or well-connected people. If the Treasury set up a regime in which these people had only a limited amount of money to live on and they were not allowed economic assistance, going to the courts would not be a realistic option in many cases, even allowing for what the Chief Secretary said earlier about recourse to legal aid.

John Gummer (Conservative, Suffolk Coastal)

Does my hon. Friend agree that the fundamental problem is that if one makes a mistake in this area and an innocent person is affected, it would be a real affront to justice? That person could carry that scar for the rest of his life. Unless there is a proper way to challenge the provisions, we could end up doing the terrorists' work for them.

Robert Syms (Conservative, Poole)

Clearly, if some of the orders are centred on certain communities, that could be the effect. People could feel that they were being picked on. The important point to note is that it is very difficult to deny that you are a terrorist, if someone else has reasonable suspicion of that. How do you prove you are not a terrorist? A judicial review would look at the process that the Minister went through and whether it had legislative support: it would not look at the justice of the case. Even with rushed legislation, I cannot see why it cannot include some form of appeal process. It would not have to involve the whole court system, as it could be a judge sitting in a room somewhere who looked at the evidence and came to a view.

In the House, we have just been through a process-difficult for many-in which we had Sir Thomas Legg looking at our expenses and then a judge providing an appeal process. In this area, which will involve very difficult issues, I cannot see why a judge could not be appointed to consider the information available from the point of view of natural justice and to come to a speedy decision. Why go through the expense of a judicial review that may not even lead to justice?

Douglas Hogg (Conservative, Sleaford and North Hykeham)

Although the model of special counsel is in no sense ideal-many aspects of that regime are easy to criticise-such a process provides a limited redress.

Robert Syms (Conservative, Poole)

What we have to consider is not only the broader picture of protecting our constituents, but the innocent man, woman or family caught in this situation, who then find that they have no easy way to get out of it. They may be caught for years in this dreadful situation with no ombudsman to help. I joked earlier about whether being subject to one of these orders might have an impact on someone's Experian credit status, but in reality, someone's life could be totally ruined by being subject to one of these orders.

If we believe that it is right, in the fight against terrorism, to use draconian powers against UK citizens in this way, we must have a system of redress and appeal. Otherwise, natural justice would be offended, and that does the fight against terrorism a disservice. However rushed this legislation, we must consider the process of appeal and the possible impact on individuals' lives. Some innocent people will be caught by this legislation, and we have to bear them and their families in mind.

Andrew Dismore (Labour, Hendon)

Unfortunately, there has not been an opportunity for the Joint Committee on Human Rights-or anyone else, for that matter-to scrutinise the emergency legislation from a human rights point of view. That is ironic in view of the Supreme Court's reasons for quashing the order-that asset-freezing measures with a dramatic effect on individuals' fundamental rights had been made by Executive order without parliamentary scrutiny. It is not clear to me whether the lack of opportunity for the Joint Committee to scrutinise the Bill is the fault of the Government or of the Supreme Court. It is probably a mixture of both.

Personally, I would have preferred it if the Supreme Court decision had been postponed for a while, as suggested by Lord Hope, to provide at least some opportunity for parliamentary scrutiny of the emergency legislation's compatibility with fundamental rights. It looks as though the Supreme Court's order has deprived Parliament of the opportunity to scrutinise the legislation from the human rights point of view, by refusing to postpone the coming into force of that order. In that respect, Lord Hope's dissenting judgment looks a little more persuasive. My Committee has a good record of carrying out such scrutiny quickly. The last time was on the anonymity of witnesses emergency legislation. We produced that report extremely quickly, and we could have done so in this context too, in just a few days.

One further complication is whether we would have been able anyway to scrutinise properly the Bill's compatibility with the Human Rights Act, in light of the al-Jedda judgment. That is an open question, because the judgment is going to the European Court of Human Rights for determination. The al-Jedda judgment said that UN obligations trump any domestic human rights treaty obligations-in this context, the European convention on human rights and, I suppose, the Human Rights Act. However, we would have been able to scrutinise the legislation for compatibility with common-law fundamental principles, which it might also offend. Another interesting question is whether this emergency legislation, or the draft legislation that has been published, will in due course attract a certificate of incompatibility. That may test the lawyers in the light of the al-Jedda judgment.

Last March, the Secretary of State for Justice spoke at a public lecture, I believe at Clifford Chance, and said that the time had probably come to revisit the breadth of our counter-terrorism laws. This episode illustrates why that is necessary. What has happened recently in the challenges to control orders, the AF judgment and now the latest judgment illustrates the importance of such an overall review of our counter-terrorism laws to ensure that we get things right in the first place.

There is no doubt that there is a human rights obligation to protect the public from the threat of terrorism, but one of my concerns is that the House never gets an opportunity to scrutinise that threat properly. The director-general of the Security Service is happy to make speeches to the Society of Editors and answer journalists' questions, and to speak to other learned bodies, but he is not prepared to make the same speech and answer questions before a Committee of the House of Commons or a Joint Committee such as my own.

There is no doubt that it is right and proper to freeze terrorist assets, but it should be done justly and fairly. We are not talking about a huge amount of money- £150,000, which is probably only a fraction of the amount spent on lawyers to argue about the matter. It is probably less than a tenth of that amount. The judgment that I mentioned concerned five men whom the Treasury suspects of involvement in financing terrorism. It is important to note that none of the men has been charged with, let alone convicted of, terrorist financing or, as I understand it, any other terrorist offence.

We have heard about UN Security Council resolution 1373, which obliges us to act to freeze the funds of

"persons who commit, or attempt to commit, terrorist acts".

It makes no mention of freezing the assets of those only suspected of involvement in financing terrorism. We should examine our terrorism laws in that context. We have a very broad definition of terrorism, going way beyond that of the UN. We also have an enormous range of terrorism offences, which I suspect is more broad than anywhere else in the world-it is certainly in the top bracket-but even in that context none of the individuals involved has been charged with or convicted of an offence. As we have heard, there is no provision for them to challenge the basis on which they have been suspected of involvement. I shall say a little more about judicial review later.

It is worth repeating some of what was said by the Supreme Court. Lord Hope stated:

"It is no exaggeration to say...that designated persons are effectively prisoners of the state...their freedom of movement is severely restricted without access to funds or other economic resources, and the effect on both them and their families can be devastating."

He stated that the orders

"strike at the very heart of the individual's basic right to live his own life as he chooses".

Lord Brown stated:

"The draconian nature of the regime imposed under these asset-freezing orders can hardly be over-stated."

To return to my point about resolution 1373, Lord Phillips stated that it

"nowhere requires, expressly or by implication, the freezing of the assets of those who are merely suspected...Even if the test were that of reasonable suspicion, the result would almost inevitably be that some who were subjected to freezing orders were not guilty of the offences of which they were reasonably suspected. The consequences of a freezing order, not merely on the enjoyment of property, but upon the enjoyment of private and family life are dire."

We have already heard about the comparisons with other common-law countries, but the real problem is the contradiction with our own basic fundamental principles of the common law. There is no doubt that if this were a Human Rights Act case-because of the al-Jedda case we do not know whether it is-the right to property under article 1 of the first protocol of the European convention on human rights, the right to respect for the family and private life under article 8 and the right of access to the court, protected both by common law and article 6, would be engaged. That prompts the question whether the law before us, in the current emergency legislation or in its final version, will give rise to a certificate of incompatibility under a further legal challenge. Lord Phillips commented:

"Access to a court to protect one's rights is the foundation of the rule of law",

and that is not provided for in the Bill. Lord Hope concluded:

"The consequences of the Orders that were made in this case are so drastic and so oppressive that we must be just as alert to see that the coercive action that the Treasury have taken really is within the powers that the 1946 Act has given them."

That was why the Supreme Court ultimately quashed the orders.

We will obviously have to have further primary legislation, but we must consider whether it is needed. We heard from the hon. Member for Twickenham (Dr. Cable) a long list of laws that we already have which could deal with the matter. The Chief Secretary said that they apply only to foreign cases, but we have heard no evidence today about how many of the people currently subjected to the orders in question are exclusively in the foreign domain and how many would therefore be caught by the existing laws. When the Exchequer Secretary responds, it would be helpful if she could say whether it is true to say that none of those cases could have been dealt with under the Anti-terrorism, Crime and Security Act 2001 for jurisdiction reasons, never mind for raisons d'état. Lord Rodger stated that

"the harsh reality is that mistakes in designating will inevitably occur and, when they do, the individuals who are wrongly designated will find their funds and assets frozen and their lives disrupted".

We have heard about the sunset clause, which will come into effect on 31 December. That inevitably means that we are enacting retrospective criminal legislation, and I understand that we may be asked to do that again later this week in another matter, which I shall not go into. The notion of retrospective criminal legislation is always profoundly suspect in any democracy governed by the rule of law. Article 7 of the ECHR makes it clear:

"No one shall be held guilty of any criminal offence on account of any act or omission which did not constitute a criminal offence under national or international law at the time when it was committed."

The other problem with the sunset clause is that it will take us into the next Parliament. My hon. Friend the Member for Walthamstow (Mr. Gerrard) said that we do not have to rush permanent legislation through by 31 March, but having read the draft Bill, I believe that a couple of months would be sufficient to scrutinise it properly and take it through. This Parliament has gained considerable experience in scrutinising counter-terrorism legislation, as we have seen in the significant reductions in Government majorities on it as time has gone by. As Back Benchers have felt more concerned about what has been going on, they have become more confident about challenging some of the arguments advanced. A new Parliament, in which we understand at least a third of all Members will be new, may not have the confidence to challenge the new Government, whether Labour is returned or the Opposition win. That is why it is important that the matter should be dealt with in the existing Parliament. We have shown that we are prepared to stand up, for example on 42 days.

The question is whether the new legislation will move us closer to compliance with Security Council resolution 1373. I do not believe that it will, because we will still have the grounds of reasonable suspicion for making orders, rather than the commission or attempted commission of terrorism acts. There will not be a right of appeal on the facts, and I take issue with the right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg) on that. He said in an intervention that all the Government would have to prove was that a Minister had acted on reasonable suspicion. That is not right, because on judicial review, the claimant, not the Government, would have to prove on the Wednesbury test that the Minister had acted in such an unreasonable way that no reasonable Minister could have concluded that there was reasonable suspicion of an offence having been committed. Let us remember that that is on the basis of the person concerned not even having a case against them in the first place.

A lot of the evidence will be closed, possibly through the special advocate procedure, and not open to the person involved. It might possibly be available through gisting, but certainly the whole case will not be available to them. If there were a case against them, the chances are that they would have been charged and prosecuted. The prospects of judicial review under the new legislation are a chimera, because it would be impossible to secure judicial review to challenge the basis on which orders are made. We have to have a proper judicial right of appeal, as with the decisions of Sir Thomas Legg, as the hon. Member for Poole (Mr. Syms) said. If we are entitled to have that right on the question of our expenses, surely people in the circumstances that we are discussing are entitled to have a similar procedure to challenge the freezing of all their funds and assets, no matter how small they may be. Judicial review is simply not a fair way of dealing with the issue.

We have heard about legal aid and living expenses being provided under the licensing regime. I challenged my right hon. Friend the Chief Secretary about how that could be appealed against, and he said that it could be challenged in court. Again, however, that would be under the same judicial review test. He gave the example of buying trainers or books, but do we seriously expect a vast amount of legal aid money to be wasted on a judicial review challenge about whether somebody is entitled to buy books or trainers for their kids? That would be the consequence of there not being a proper right of appeal, judicial or otherwise, on the facts of what has been decided, which cannot be fair or right.

Transparency is of course important, but let us remember that in most of these cases we will publish people's names. This is the first counter-terrorism judgment that I have read that names the individuals concerned. In other cases, people are called Mr. A or Mr. B or whatever-their anonymity is protected because they have not been convicted of any offences, and quite rightly. Those in the 14, 28, or 42-day cases have their anonymity protected, as do those subject to control orders, but those in the cases to which I have referred do not. It would be difficult to protect anonymity and achieve the object of the freezing order, but we need to think about some degree of confidentiality. It might be okay to tell the banks, but is it fair to broadcast it to the next-door neighbour?

There are many issues of fairness in the Bill. I suppose the Minister will say, "Well, this is determining a civil issue, not a criminal issue," but time and again that argument has been thrown out by the courts. Whether we like it or not, when it comes to counter-terrorism legislation, the courts determine criminal responsibility, which should be done using the criminal test.

I have grave doubts about the Bill. The right hon. and learned Member for Sleaford and North Hykeham mentioned the Joint Committee on Human Rights sixth report of 2003-04. That report was published before I was on the Committee, but I wholly agree with its endorsement of the recommendation of the Newton Committee

"that freezing orders for specific use against terrorism should be addressed in primary legislation".

I think we all agree with that, which I suppose is why we are here today. If that had been done at that time, we would not be here today and the matter would have been resolved long ago.

The Joint Committee report also states clearly that

"judicial review provides only a very limited protection against legislative orders of this kind".

I concur with that. The draft legislation that we will soon be debating simply does not provide the required safeguards. I say to my right hon. and hon. Friends on the Front Bench that I suspect that after the Joint Committee has scrutinised that Bill I will be making a similar speech, should I be re-elected.

Douglas Hogg (Conservative, Sleaford and North Hykeham)

I will be fairly brief, because I know my right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer) and my hon. Friend the Member for Woking (Mr. Malins) want to speak and the winding-up speeches will start in about half an hour.

I begin by repeating what I said in the debate on the timetable motion: I accept that the Bill must pass and that it would be very unsatisfactory not to have such legislation in place, but I recognise that fact with an extremely heavy heart, because I deplore the process and what we are about to do. The Bill re-enacts the statutory instruments that were much criticised by the Supreme Court. We have been reminded by a number of right hon. and hon. Members as to the trenchancy of the criticisms of those orders made by, for example, Lord Hope.

The 2006 order went through without any parliamentary scrutiny at all. That is an extremely bad thing. We were told by the Chief Secretary to the Treasury that that was permitted by the 1946 Act, but that is not the view of Lord Hope, who said that that measure did not justify the insertion of the reasonable suspicion test. In any event, however, while the Act might have so permitted, it certainly did not require the passage of such measures by way of secondary legislation. What in fact we are doing today is simply re-enacting in primary legislation what was previously in secondary legislation that was deemed offensive in almost all its particulars by the Supreme Court.

It is worth reminding oneself of the scope of the 2006 order, which is being replicated in primary legislation. In the first place, the order creates quite serious criminal offences, which are punishable by a maximum of seven years. That is not trivial. Secondly and differently, to take up the point made by the hon. Member for Walthamstow (Mr. Gerrard), the designation of the person involved in terrorist activity simply involves the reasonable suspicion test, which is a very low standard of proof. In addition, there is no way of challenging that designation outside the judicial review mechanism. As I think everyone but the Chief Secretary recognises, the judicial review mechanism provides a very limited form of review.

One matter of concern to me is that the draft Bill that the House may be asked to consider in due course relies on judicial review as the only safeguard. I agree very strongly with the hon. Member for Hendon (Mr. Dismore), and indeed all others who have spoken, that there needs to be some way of reviewing the issue on the merits. The 2004 Joint Committee report echoes that point. Moreover, the freezing orders are extraordinarily wide in scope. So far as I am aware, having looked at both the draft Bill and the 2006 order, there is, aside from judicial review, absolutely no way in which the scope of the freezing order can be impugned.

I do not think that there is any good reason why proper safeguards should not have been written into the Bill. In fact, there are a number of models on which one could have drawn-pick them off the shelf!. The special counsel procedure in control orders is a case in point. I very much dislike that process, but it is better than nothing. There is no point in the Government's arguing, "Well, we couldn't do that, because we thought we were going to win the case in the Supreme Court." That shows that they were jolly badly advised, because they did not win. Not only did they not win, but as the hon. Member for Twickenham (Dr. Cable) said, the orders were criticised with remarkable robustness by people whose role in life is generally to understate rather than overstate their views. The Government lost not only for legalistic reasons, but for reasons of substance: the Supreme Court thought that the powers given were too draconian.

That was also the view expressed in the 2001 report under the chairmanship of my right hon. and noble Friend Lord Newton of Braintree of the predecessors of the hon. Member for Hendon on the Joint Committee on Human Rights in 2004. The Government have been told time and again that such measures ought to be in primary legislation, not only because primary legislation is the proper vehicle, but because that process enables the House and others properly to review what is proper. On any view, therefore, what we are doing today is draconian.

The measure will last for a year or so, and the sunset clause is in place, which I welcome. I hope that my hon. Friends will forgive me if I dissent from them slightly, but I think that a March sunset is probably too soon, because this is a difficult area of law. I agree with whoever said that he did not want to see our rushing through new legislation that has not properly been considered. I am inclined to think, with some hesitation, that March is too soon, and that even July is too soon. My disposition, with a heavy heart, is to go for the timing in the sunset clause.

I will be happy to end my speech after this point, because I know that my right hon. Friend the Member for Suffolk, Coastal and my hon. Friend the Member for Woking want to speak. We are doing something that is pretty draconian. There is an essential rule in life that one must observe if one is a parliamentarian: all power given away is always, on occasion, abused. That is certain. From that follow two very important consequences. First, one gives away the minimum of power possible to the officers of the state. Secondly, where one must give power away, one must restrict the exercise of that power with proper constraints, reviews and appeals. Under this Bill we are falling foul of both propositions, and I deeply regret that fact.

Humfrey Malins (Conservative, Woking)

I will be brief. I wish to make basically two points, both of which are relevant to the issues under discussion, but have a wider application.

First, I shall say a few words about the importance of parliamentary scrutiny. Lord Hope referred in his judgment the other day to the importance of parliamentary scrutiny and the relationship between Parliament and the Executive-in short, to the ability of this House, through Back Benchers and Oppositions, to scrutinise what Governments are doing, whether in legislation, Orders in Council or whatever else.

I first entered this House 27 years ago. I believe that those 27 years have seen a diminution in our ability to hold the Executive to account and to scrutinise them properly and at length. The late Lord Weatherill, the famous Speaker, told me once that he kept a record of those speeches in this House that actually altered the course of events through the power of their arguments, and there were many in those days. Can you believe it, Mr. Deputy Speaker: speaker after speaker in this House arguing something, and the Government turning round at the end and saying, "They're right-we've lost the argument"? That is what I mean by parliamentary scrutiny. Compared with 25 or 30 years ago, we are impotent in this House when it comes to doing the job for which we were elected.

After parliamentary scrutiny, the next most important point I wish to mention concerns judicial remedy, which has been covered by many other speakers today. Designation and freezing orders are very serious matters indeed. They can have a real effect on a person's life, and not just in the short term, but in the long term. Over in the Council of Europe, which I attend from time to time, we discuss human rights. We have representatives from many different European countries, some of which have good records, some of which have bad records. A year or two ago, a Swiss lawyer, Dick Marty, brought up United Nations blacklists at the Committee on Legal Affairs and Human Rights, and we had a report on them. He told us what they were and what they meant. Through the United Nations, somebody could be put on a blacklist in relation to terrorist matters, and have their assets frozen and all the rest of it. He told us of a case in Switzerland where the restrictions were such that the person concerned could not leave his own canton, if that is another word for village.

Douglas Hogg (Conservative, Sleaford and North Hykeham)

No, it means county.

Humfrey Malins (Conservative, Woking)

My right hon. and learned Friend confirms that it means county.

The key point was this: what remedy did that man have in relation to that designation? The answer was none. We thought-and I think-that that was a disgrace. If we hand power to the Executive without giving the citizen a proper legal remedy-a right of appeal-we are not doing our duty. If we make a whole series of orders-designation orders, freezing orders and so on-that have such a dramatic impact on someone's life, do we as a Parliament not have a duty to ensure that we give that individual some hope of overturning them? Otherwise, what kind of world will we be living in?

My right hon. and learned Friend the Member for Sleaford and North Hykeham (Mr. Hogg) and others have pointed out that judicial review is limited. The special advocate procedure is limited. However, we have to do something, because it would be terrible if, in years to come, we move further in the direction of the Executive being able to do something nasty against citizens, who then do not have the right to say to an independent judge, "Listen, this isn't fair. It's not just. Please overturn it." That is one of the most important factors in our election to this Parliament: we are here to speak up for those who are dealt with in such a way by the Executive that they are defenceless. It is our job to protect them and ensure that they are protected.

Judicial remedies and appeals, and parliamentary scrutiny are two important aspects of this debate. I would hope-but we have not got the time. Oh dear! I hoped we would have had time to explore those issues at some length over the coming months, to ensure the basic rights of our citizens.

John Gummer (Conservative, Suffolk Coastal)

Today we are discussing what is, in fact, the main purpose of being a Member of Parliament-that is, how the citizen is protected. The danger is that all necessary terrorism legislation can easily be the means by which citizens' freedoms are eroded. Over the past 250 years of legislation, the moments of most danger to the citizens have been those when we became most aware of the danger to the nation. That is a natural link. It is extremely difficult when we face the realities of terrorism to be as careful as we ought to be about the realities of individual freedom. Yet we are fighting terrorism in order to defend that freedom. That balance is therefore essential in the defence of freedom. We are not putting the one against the other: they are both part of the same effort.

That is why I would suggest to the Government that they have done themselves a disfavour by not using the House of Commons as the mechanism by which they ensure that that balance is achieved. The Government have spoken as if, somehow, using secondary legislation-or, indeed, no legislation at all-in order to carry through their requirements has been a necessary consequence of the terrorist threat. In fact, it should be the other way round: the terrorist threat should lead the Government to come to the House of Commons to debate the issues, to ensure that what they do can then be seen as proportionate and just.

That ought to be true in the highest way, but I suggest that it also needs to be true in a rather lower way. Two of my colleagues who have spoken are lawyers. I am not a lawyer. I do not much like the way the courts make law. Law ought to be made here, but if we make the law badly here, we will encourage judges in their increasing desire to make law themselves. Faced with bad law, I understand the anger, which is the only way I can refer to the language used by the Supreme Court-a phrase I dislike entirely. I understand the anger of those judges, who saw that what they were dealing with was wholly contrary to their understanding of the demands of the common law. There is therefore a reason not only for the Government to take Parliament seriously in making such judgments for the bigger scene, but to ensure that the distinction between the purposes of the courts and the nature of Parliament is continued and supported, which is the other issue.

We also have to look carefully at the result of what we are doing today. I recently saw this connection in a wholly different way, but I have seen how, when organs of government get the bit between their teeth, it is possible to act most unjustly in respect of individuals. What I have seen has seared my view, so I say this to the Exchequer Secretary, who is going to sum up this debate. One has to recognise that many of the people involved are at least innocent enough never to be charged. The figures are interesting, are they not? Of some 51 cases, 18 have been reviewed and dropped. The Treasury has suggested that that is a compliment to its review procedure, but one could think that it was a statement about the danger of the system, because it might be that those people should never have been on the list at all and that it is not the review procedure that should be praised, but the original decision that should be criticised.

Douglas Hogg (Conservative, Sleaford and North Hykeham)

I hope that my right hon. Friend will forgive me for making a slightly legalistic point-I know he does not like lawyers very much-but if there had been a proper inter parte review, if he will forgive the phrase, the aggrieved party might have succeeded in many cases in which the Treasury has not reviewed the case in the person's favour.

John Gummer (Conservative, Suffolk Coastal)

I entirely agree with my right hon. and learned Friend. That is what really worries me. I could not quite do the mathematics quickly enough, but if 18 cases have been reviewed, another 33 have not been reviewed-yet the people involved in them have not been charged. It is very dangerous to have 33 people subject to draconian punishment, when there has been no possibility for them to raise the issues in a way this House would see as reasonable for citizens of the United Kingdom.

Andrew Dismore (Labour, Hendon)

Another thing we do not know about the 18 cases that were reviewed is how long it took before the orders were lifted.

John Gummer (Conservative, Suffolk Coastal)

The hon. Gentleman makes exactly the right comment, but that means that we are dealing with 51 people who, to any reasonable person, may have been subject to draconian punishment-I quote the judge in using that term-yet they may not be guilty at all.

I believe that Parliament must be very careful before making judgments based on an assumption that Ministers are decent people-I am sure that the Exchequer Secretary is decent and I am sure she will look at cases very carefully-who are therefore unlikely to get it wrong.

Elfyn Llwyd (Plaid Cymru, Meirionnydd Nant Conwy)

rose-

John Gummer (Conservative, Suffolk Coastal)

Before I give way to the hon. Gentleman, let me say that I am a believer in the infallibility of the Pope, but it makes me extremely suspicious of the infallibility of anybody else. In that sense, I do not believe that Ministers are ever infallible. Parliament should never give to Ministers powers that depend on the degree of infallibility that a Bill like this one suggests.

Elfyn Llwyd (Plaid Cymru, Meirionnydd Nant Conwy)

The Government will always say that powers like this will be used strictly and only occasionally, but may I remind the right hon. Gentleman that, so far as is known, the Icelandic Government have never been involved in any terrorism, but their assets were frozen?

John Gummer (Conservative, Suffolk Coastal)

I am not sure that I should be led down that path, Mr. Deputy Speaker, as it would be a chilly one and might lead me to receive complaints from you. I shall continue, rather, with the point that the system we are talking about today depends on a degree of omniscience on the part of Ministers that, having been a Minister myself for 16 years, I do not believe should ever be accorded to them.

Secondly, the system does not provide the transparency of a proper review that we would expect for ourselves. I say to the Ministers present this evening that they should look at this issue by putting a very simple question to themselves: would they like their sons or daughters to be subject to this order? Would they feel that their sons and daughters were able to have a proper consideration of their cases? It is no good thinking about people they do feel any connection with. This is the way for any Member to look at any legislation-how do we believe any particular legislation would treat someone whom we cared about?

That explains why I believe that aspects of this legislation are both intolerable and intolerant. The first is the use of reasonable suspicion as a test. It is a proper test of deciding whether Mr. Jones on the street can properly be brought into the police station for further consideration of some event that has taken place. It is a proper test for beginning a process, but it is not a proper test for ending a process. That is why it is unacceptable.

Secondly, this is not a proper test for a Minister to use, because what will the Minister do when a group of superior people come in and say, "Minister, better not say no to this, because whereas if you get it wrong and do something unhappy to an individual, it will not serve you too badly, if you get it wrong and let the individual free of these restrictions, you may find yourself in trouble"?

Sarah McCarthy-Fry (Labour, Portsmouth North)

I cannot sit here and listen to that. I assure the right hon. Gentleman that Treasury officials in no way make remarks like that to me when I make these designations, and I am sure that they have not done so to previous Exchequer Secretaries either.

John Gummer (Conservative, Suffolk Coastal)

Let me just say to the hon. Lady that they will not put it as boldly as I do because they are all very neat and charming, but what they always say to Ministers is, "Better not"-and if she has not understood that, I can well understand a number of the decisions that she has made. She has obviously not listened, because they always say, "Better not"-every one of them; it is part of the whole "Yes Minister" programme of indoctrination. Let me tell her that if she thinks anything other than that, I am even more worried about the situation we find ourselves in.

Douglas Hogg (Conservative, Sleaford and North Hykeham)

rose-

John Gummer (Conservative, Suffolk Coastal)

Very rapidly.

Douglas Hogg (Conservative, Sleaford and North Hykeham)

Very rapidly. My right hon. Friend and I were both Ministers for a long time and most of us had the reputation of being pretty robust, so let me say that my right hon. Friend is right.

John Gummer (Conservative, Suffolk Coastal)

I therefore have to tell the hon. Lady that "reasonable suspicion" is a dangerous thing to be put in the hands of any Minister. If I were her, I would refuse it, because it puts her into an impossible position, which she should, in all honour, refuse. Even if she accepts this when there is no appeal against her, she might find that judicial review reveals that she has been unreasonable and that she should not have made that decision, as any fool can see. [Interruption.] It is all very well for the Exchequer Secretary to laugh, but we are talking about the basic rights and freedoms of Her Majesty's subjects, which is no laughing matter.

Some of us have sat in this House, as I have, for 35 years, and I have always thought that my first priority was the defence of the freedom of Her Majesty's subjects. This Government have done more to bypass Parliament and more to restrict the opportunities of MPs to stand up for the freedom of their constituents than any previous Government. Lord Liverpool would have been proud of them, which is about the most insulting thing any historian could say of the present Government. The fact that Lord Liverpool was a Conservative shows just how independent I am on this issue.

I end by saying that we rarely have an opportunity to argue about the basis on which we are here. The fact that there are so few of us in our places to debate this particular issue is itself something that speaks volumes. Although the Government have received no support whatever for the basis on which they have proceeded, we know that they will take no notice whatever of the words spoken on all sides of the House. That is the real criticism of this Government.

Jacqui Smith (Labour, Redditch)

rose-

John Gummer (Conservative, Suffolk Coastal)

No, I will not give way-certainly not to the right hon. Lady, who of all people has done more than almost anyone else to press forward this Government's opposition to Parliament. I merely point out to you, Mr. Deputy Speaker, that this is too serious a matter for the Government to refuse to listen to Parliament, but I have no doubt that they will still refuse to do so.

David Gauke (Conservative, South West Hertfordshire)

It is a pleasure to wind up this Second Reading debate on a matter of great importance, which, as we have heard during this evening's debate, excites great interest and passion. It is vital for Parliament to address issues of protecting the liberty of the individual and national security. A number of contributors to the debate have highlighted the nature of the legislation and of the orders passed under the United Nations Act 1946. The Supreme Court described the legislation as "draconian", "drastic", "oppressive", "burdensome" and "paralysing", and a number of right hon. and hon. Members have highlighted its imposition-I refer particularly to the comments of my hon. Friend the Member for Poole (Mr. Syms), my right hon. and learned Friend the Member for Sleaford and North Hykeham (Mr. Hogg) and my right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer). In addressing terrorism, however, it is important that we deal with the freezing of assets and prevent the financial system from being used to perpetrate terrorist acts. That is a huge issue for any Parliament to address-the key point about the Supreme Court ruling is that the matter is for Parliament to address. My hon. Friend the Member for Woking (Mr. Malins) pointed out the important role of Parliament in that regard. We are therefore grateful to have the opportunity to debate the matter today.

The Opposition's view is that without the Bill we would take a substantial risk that assets of suspected terrorists that are currently frozen would be accessed, which might ultimately lead to terrorist activities. I note that the Liberal Democrats have withheld their position on whether they will support the Bill's Second Reading. In referring to Lord Hope, the hon. Member for Cambridge (David Howarth) made the point that all the orders made under the United Nations Act 1946 could have been dealt with under the Anti-terrorism, Crime and Security Act 2001. However, there is a risk that that might not work, and for those reasons we will support the Bill. I would be surprised if the Liberal Democrats opposed it.

In part at least, we support the Bill because of the situation we find ourselves in. We are where we are. There are two significant concerns about how we got into that position. First, by passing orders under the United Nations Act, the Government were taking a risk that at some point the existing legislation would be invalid, and that suspected terrorists would no longer have their assets frozen unless exceptional action, such as emergency legislation, was taken. The right hon. Member for Redditch (Jacqui Smith), who speaks with the experience of having been Home Secretary, said that we cannot pass a new Act every time we are brought to court-that would fill up the legislative timetable. However, this is an important matter, of fundamental liberties, and surely the Government should have addressed it more quickly.

However, it is a question not just of legality. The second concern is that Parliament has been bypassed. Parliament should have been involved in determining the relevant orders. That is the essence of the Supreme Court's decision. Consequently, the Government can be criticised for doing neither what was constitutionally necessary nor what was constitutionally right.

My hon. Friend the Member for Fareham (Mr. Hoban) set out in forensic detail the warnings that reliance on section 1 of the United Nations Act 1946 was an uncertain basis for the Government's asset-freezing regime. Before the regime was brought in, the Foreign Affairs Committee report of 1999 on Sierra Leone recommended that the United Nations Act should have been amended so that delegated legislation made under section 1 was at least subject to the affirmative procedure, which would have given Parliament some opportunity to debate the matters. In 2003, the Newton committee report recommended that

"freezing orders for specific use against terrorism should be addressed again in primary legislation, based on the well-tested provisions of the Terrorism (United Nations Measures) Order 2001".

That view was endorsed by the Joint Committee on Human Rights later that year. There have also been international comparisons: the likes of Australia and New Zealand initially made orders under their equivalents of the United Nations Act but then brought in primary legislation that dealt specifically with such matters. In this case, the High Court found against the Government in April 2008-yes, the Court of Appeal overturned it, but the judgment was partially dissenting.

The Government cannot claim a lack of parliamentary time or opportunity to address the matters properly in primary legislation. After all, the Anti-terrorism, Crime and Security Act 2001 and the Counter-Terrorism Act 2008 were opportunities to address the matter properly and prevent the situation in which we find ourselves today. There has been a constituent failure to permit Parliament to consider the issues through primary legislation. A number of right hon. and hon. Members, most passionately my right hon. Friend the Member for Suffolk, Coastal, made the case that the Government have ignored Parliament; they have not taken it seriously. As my hon. Friend the Member for Fareham pointed out, as recently as Thursday the Government broke their undertaking on parliamentary scrutiny in respect of opt-ins under the European Union (Amendment) Act 2008. It is worth quoting what the hon. Member for Birmingham, Edgbaston (Ms Stuart), a Government Back Bencher, said on the matter last week, 4 February, at column 459:

"we again find that Parliament is just some irritating thing that has somehow to be dealt with."-[ Official Report, 4 February 2010; Vol. 505, c. 459.]

That describes the Government's approach to asset freezing all along, until the Supreme Court stepped in and said that it was necessary for Parliament to address the matter.

The Government have prevented Parliament from reviewing the legislation and making its voice heard for some years. Even in the Bill, they continue that practice through the sunset clause, which kicks the issue, if not into the long grass, at least beyond the next general election. It is perhaps not surprising, given comments on both sides of the House, not least from Government Back Benchers the hon. Members for Walthamstow (Mr. Gerrard) and for Hendon (Mr. Dismore) in opposition to some of the details of the Bill, that the Government do not want to bring the matter back to the House this side of a general election. It was, of course, the Government's intention to do so less than a week ago-it was striking that the Chief Secretary said that it would clearly be better to allow time. Indeed, the very reason that the Treasury applied to the Supreme Court for a stay was to allow the Government the opportunity to get the legislation through in the next two months. We could still do that-we could pass the Bill today and come back during the next few weeks to scrutinise and debate a full Bill, as was the Government's intention until very recently.

The fact that the Government have been reduced to this situation demonstrates that if one ignores Parliament too long, and fails to show Parliament respect, eventually our constitution balances itself and Parliament's voice is heard. It is a pity that the Government took such risks that emergency legislation had to be rushed through the House.

Sarah McCarthy-Fry (Labour, Portsmouth North)

This has been an interesting debate on an issue which-as the debate has revealed-is difficult and significant. I welcome the Conservatives' support for the Bill, and hope that the Liberal Democrats will support it as well, given the severe consequences to national security-described so eloquently by my right hon. Friend the Member for Redditch (Jacqui Smith)-if it is not passed.

The threat to the United Kingdom today from international terrorism is real and significant. We know that terrorists need finance to carry out attacks. As we have seen, the cost need not be great, but terrorists also need finance to maintain their infrastructure, for training, equipment and recruitment, and to promote their ideology. Their capabilities are severely constrained if they have no access to funds. Over the years, the asset-freezing regime has proved to be a valuable tool for disrupting and preventing terrorist financing.

Our aim is to prevent a gap in the asset-freezing regime, and to ensure that frozen funds cannot be unfrozen and diverted and used tor terrorist purposes and that suspected terrorists do not gain free access to the United Kingdom's system. We consider it necessary to the UK's national security to act swiftly to maintain the asset-freezing regime under Orders in Council on a temporary basis while we table further legislation introducing a terrorist asset-freezing regime to primary legislation, allowing time for Parliament to scrutinise our proposals fully.

I welcomed the many and varied points raised by Members, and, in the time available, I shall do my utmost to address them. Let me deal with the major points first. Many Members asked why primary legislation had not frozen the assets at the outset. Orders in Council made under the United Nations Act have proved an accepted way for successive Governments, regardless of party, to give effect to UN Security Council resolutions. The intention of the provision is to ensure that the UK can swiftly implement its UN obligations in respect of matters affecting international peace and security.

By making Orders in Council under the UN Act, we were able to establish our terrorist asset-freezing regime in law within 12 days of UN Security Council Resolution 1373. I am sure Members will understand why rapid action was necessary to deal with terrorist finance in the weeks after 9/11. We continued to believe that the use of Orders in Council under the UN Act was the right approach, and was consistent with the way in which previous Governments had given effect to UN Security Council resolutions.

Some Members-including the hon. Members for Fareham (Mr. Hoban) and for Poole (Mr. Syms)-have asked why we did not use primary legislation once we knew, after the High Court ruling in 2008, that the orders were potentially vulnerable. We concluded that it was right to see the legal process through to the end, in order to be clear about the proper use of the UN Act and the way in which it applied to the orders in question.

David Howarth (Liberal Democrat, Cambridge)

Will the Minister give way?

Sarah McCarthy-Fry (Labour, Portsmouth North)

I will not. I am sorry.

As Members will know, although the Supreme Court ruled that the Terrorism (United Nations Measures) Order 2006 and article 3(1)(b) of the Al-Qaida and Taliban (United Nations Measures) Order 2006 had gone beyond the scope of the UN Act, the Court of Appeal upheld the Government's position.

Other Members referred to the sunset clause. We think that waiting until the end of the year allows enough time for pre-legislative scrutiny and legislative scrutiny. Some Members agreed, while others did not. I look forward to the debate on the amendments tabled in Committee.

The UK's terrorist asset-freezing regime has been in place since 2001. These are not new powers, and the regime has been tested operationally and been improved over the years. In 2007, the UK's asset-freezing regime was judged by the financial action task force to be fully compliant with international standards. Ours was the first country to be awarded that top mark. Since then, we have improved the regime further through the Terrorism (United Nations Measures) Order 2009. It includes improved safeguards, such as the requirement that designations can only be necessary for public protection, and that asset freezes are time-limited to a renewable period of 12 months. Let me re-emphasise that the Supreme Court has not found the regime to be contrary to human rights, or to contain inadequate safeguards.

David Howarth (Liberal Democrat, Cambridge)

Will the Minister give way?

Sarah McCarthy-Fry (Labour, Portsmouth North)

I will in a moment.

The court struck the orders down purely on the grounds that they went beyond the scope of the UN Act. The hon. Member for Cambridge (David Howarth), the right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg), my hon. Friend the Member for Walthamstow (Mr. Gerrard) and others quoted what was said by the Supreme Court judges. Lord Brown said:

"I am unimpressed by the alternative grounds on which the Order is challenged, those of certainty and proportionality. Primary legislation introducing this same asset-freezing regime could not have been declared incompatible on those grounds."

Lord Mance, with whom Lord Phillips agreed, said:

"I am at present also unpersuaded that the content of the Orders could be challenged on grounds of lack of proportionality",

although he did say that he need express no final view.

David Howarth (Liberal Democrat, Cambridge)

The crucial point that the Minister seems to have missed, which was mentioned by both the hon. Member for Hendon (Mr. Dismore) and me, is that the Supreme Court thought that because of the al-Jedda case it could not consider the human rights position. The point is not that it was finding in favour of the Government, but that it could not consider the issue at all.

Sarah McCarthy-Fry (Labour, Portsmouth North)

I do not think that that is the argument advanced by one of the judges.

Let me deal with a point raised by the hon. Member for Twickenham (Dr. Cable). Why do we not use other existing counter-terrorism legislation? It has been suggested that counter-terrorism legislation is already in place, and that we should use those powers rather than introducing asset freezing. We have a comprehensive framework to counter financing of terrorism, but none of the other legislation replicates the effects of the asset-freezing regime under the terrorism orders in its preventive nature and in its ability to restrict suspected terrorists' access to the financial system. Furthermore, no other legislation contains such a comprehensive range of prohibitions on third parties' making funds available to terrorist suspects, such prohibitions being essential to preventing terrorists from circumventing the restrictions and accessing funds.

Many members have asked why we do not use the powers under the Anti-terrorism, Crime and Security Act 2001. The powers under the Act only allow for action to be taken against threats emanating from outside the UK, and can only be used in very limited circumstances in relation to persons in the UK-when the Treasury has a reasonable suspicion that such persons have provided, or are likely to provide, assistance to the persons abroad who are posing the threat to the UK. That means that many of the individuals who are currently subject to asset freezing could not have been designated under this power, including those responsible for the attempted bombing on 21 July 2005. Anti-terrorism, Crime and Security Act freezes would therefore not be sufficient to protect our national security or to meet our UN obligations.

Control orders were mentioned. They do not freeze funds or introduce prohibition on third parties. Suspicious-activity reports under the Terrorism Act 2000 do not freeze funds; they merely delay payments. We cannot monitor spending. As for account- monitoring orders, again there are no prohibitions on third parties and funds cannot be frozen.

Our Terrorism Order 2009 sets out a number of safeguards to ensure that our powers are used proportionately. Designations can only be made when there is reasonable suspicion of involvement in terrorism, and when necessary, for public protection, and asset freezes are time limited to a 12-month period which is renewable. The Treasury actively reviews all cases, and-as the right hon. Member for Suffolk, Coastal (Mr. Gummer) pointed out-has frequently delisted people. Delistings may be due to an acquittal as a result of a decision by the Treasury that a designation is no longer in the interests of public protection. Let me give an example. In 2006, the assets of 19 persons linked to the transatlantic airline plot were frozen. Of those, seven have been delisted. Five were arrested and released without charge, one was convicted, sentenced and released, and one is awaiting trial. Twelve remain listed, 11 have been charged, seven have been convicted and three await trial. One trial has collapsed, and an urgent review is in progress.

The right hon. Member for Suffolk, Coastal also asked whether any Member present would want his or her son or daughter to be subject to these designations. I am sure that no Member would want that, but I am also sure that no Members would want a son or daughter to be a victim of a terrorist bomb or terrorist threat.

We believe in the importance of striking the right balance between protecting national security and protecting human rights. While it is true that the asset-freezing regime has an impact upon human rights, we consider this interference to be necessary in the interests of national security and public protection, and consider it proportionate to those ends.

Question put and agreed to.

Bill read a Second time; to stand committed to a Committee of the whole House (Order, this day).

Clause 1 — Temporary validity of certain Orders in Council

Mark Hoban (Conservative, Fareham)

I beg to move amendment 1, page 1, line 3, leave out '31 December 2010'and insert '31 March 2010'.

Sylvia Heal (Deputy Speaker, Halesowen and Rowley Regis)

With this we may take amendment 2, line 2, leave out '31 December' and insert '31 July'.

Mark Hoban (Conservative, Fareham)

As I said on Second Reading, plan A had been to pass a terrorism (United Nations measures) Bill by no later than the end of March, in order to put the orders on a proper legislative footing. That plan was predicated on the Supreme Court granting the stay for which the Treasury had applied, so that Parliament could put in place the legislation needed to prevent terrorists from accessing their assets. It was on that basis that we entered into discussions with the Treasury and agreed what we felt would be sufficient time in this place and the other place to ensure that the Bill, and the views of external stakeholders interested in the process, could be thoroughly assessed so that the measures were put on to a proper footing. However, the Supreme Court's decision not to allow a stay because it would-to paraphrase the judgment-confer a sense of legality on orders that were illegal means that the emergency legislation before us today takes priority, and rightly so.

This does not mean that the Government are off the hook in terms of bringing forward a proper statutory basis for these orders. Indeed, we told the Exchequer Secretary last week that we would have been content for the Bill I mentioned to complete its stages today and for us to move on to consider the Terrorist Asset-Freezing (Temporary Provisions) Bill tomorrow, while also ensuring that after we returned from the recess, we would have a day on the Floor of the House in Committee. That Bill would then have passed to the other place where there would have been an opportunity for further scrutiny. The Bill would therefore have been on the statute book by no later than the end of March.

We have pursued that line through introducing amendment 1, as we believe that the Government should move as quickly as possible to put in place proper primary legislation. It seems to us that measures that were described in the court ruling as draconian should not be kept in place for up to 10 months on the basis of a three clause Bill that perpetuates some of the failings of the underlying orders. We believe that the Government should move more quickly so that they take responsibility for sorting out the mess they have created on their watch, rather than deferring any remedial measures until later this year.

There are some issues to be debated; we touched on a number of them on Second Reading. They include the need for proper safeguards to be in place, and the question of whether there should be a different safeguard from judicial review to look at the merits of Treasury applications. The hon. Member for Hendon (Mr. Dismore) commented on the limitations of judicial review as a potential remedy, such as the fact that it could not be used to vary the terms of a licence. These issues are well known and have been fairly thoroughly debated in the context of other legislation, and we believe they are sufficiently well known for scrutiny to take place far more quickly than under the Government's sunset clause. Indeed, the hon. Member for Hendon said that, given the brevity of the Bill, his Joint Committee on Human Rights could scrutinise the Bill and publish a report quite quickly; he thought it would take a matter of days. That is entirely consistent with the timetable that would flow from our proposed sunset clause. We took his comments as a positive sign, suggesting that we could pass this legislation on a much shorter-term sunset clause than the Government suggest.

The draft Bill published last week is based largely on the 2009 order. The issues in that regard have been well rehearsed over time, and a much wider range of issues will need to be raised. Again, therefore, all the arguments point towards having a shorter-term sunset clause than that which the Government propose-31 March rather than 31 December.

The Government's sunset clause suggests, of course, that the decision on future legislation will be put off until after the next general election. The hon. Member for Hendon made the point that the House will by then have lost a great deal of its current expertise, given that about a third of Members will leave this place at the next general election. Indeed, many of the Members who took part in the Second Reading debate will not be here the other side of the general election to add their expertise to the debates. That is an added reason to accelerate this process, so we can benefit from Parliament's collective memory and knowledge of the scrutiny of the raft of anti-terrorism Bills of the last few years.

There is a clear, straightforward argument here. Our amendment 1 provides plenty of time for proper scrutiny. We are following the timetable we agreed with the Government prior to the Supreme Court deciding to quash the orders last Thursday. We believed prior to that that the timetable gave sufficient time for proper parliamentary scrutiny. Our view is that that still holds, and that we should move towards that timetable to give this Government the opportunity to clear up the mess they have created.

David Howarth (Liberal Democrat, Cambridge)

First, let me say that it would have been better if we had dealt with all the amendments before us in one large group.

Amendment 1 is an attempt to introduce a stricter sunset clause. I can see the Government's point that the end of March is very soon and there is little likelihood of full consideration of the replacement Bill being made in that time, but there needs to be a tighter timetable than the one the Government propose, which is the end of December.

The Bill allows the continuation of a situation that the Supreme Court finds obnoxious in that it undermines fundamental rights. In the words of Lord Justice Sedley, echoed by Lord Hope in the Supreme Court, the UN orders lead to a situation in which subjects of the Treasury's directions are, effectively, prisoners of the state; they are walking prisoners, of course, and two of them have walked away, but the restrictions are so tight, both on the subjects and their families, that, effectively, these people can no longer live their own lives. To echo what Winston Churchill said in 1943 about a situation in which the Executive could throw a man into prison, that is odious in the highest degree. It should not be allowed to continue one hour longer than is necessary. Our view, put forward in amendment 2, is that all the wider consultation and all the Committee consideration of the replacement Bill could be carried out before the election, and after the election it would be perfectly doable and adequate to complete all the stages of a replacement Bill by the summer recess-before the end of July.

When I was listening to the Minister, it suddenly occurred to me why the Government cannot accept our amendment-it is the reason that they cannot state: amendment 2 assumes that the election will be on 6 May or before. I accept that if this Parliament were to run its full course and the election were to be in early June, it could plausibly be argued that there would not be enough time to complete the passage of a replacement Bill by the end of July. I also accept that the Government will not admit in a Committee of the whole House on an emergency Bill what the date of the election will be -[Interruption.] Well, they might; it seems that Ministers are about to reveal the date. Of course the Secretary of State for Defence revealed it on television, but that was subsequently withdrawn.

Nevertheless, I draw the attention of Ministers to the briefing prepared by Justice, which has said that even assuming that the Parliament runs its full course it should be possible to get the replacement legislation through by the end of October. Thus, I am very open to the Government rethinking the December date in favour of an October one, even if they are unwilling to move to a July date, for obvious political reasons.

Sarah McCarthy-Fry (Labour, Portsmouth North)

Obviously the purpose of both amendments is to reduce the period during which the temporary Bill will have effect. Our Bill provides for a date of 31 December, whereas the amendments propose two alternative dates-31 March and 31 July. I think that we are all agreed on the urgent need to get the long Bill on to the statute book as soon as possible, so the issue to address is how much time is needed to give the lasting legislation the proper level of scrutiny and debate. We believe that the lasting Bill deserves full deliberation in both Houses and that it should benefit from evidence and scrutiny provided by external bodies. The proposed date of 31 December provides for that, but the period up to 31 March does not. Given that the urgent need to legislate is resolved by this Bill, we think that the issues deserve more time for consideration so that we can be sure that the legislation is appropriate. If the debate and arguments put forward on Second Reading of this Bill are anything to go by, there will be a vigorous debate.

Using 31 July would provide more time and the option of pre-legislative scrutiny in the coming months. However, given the upcoming general election and recesses, it is not certain that such a date would provide time to scrutinise the long Bill properly. I have heard views from hon. Members on both sides of the House in favour of 31 December, as well as arguments in favour of 31 July -another date has also been proposed. I look forward to listening to any other arguments that are put forward, but I urge right hon. and hon. Members to reflect on the lasting benefits of permanent legislation. I really do not think that setting a close deadline helps, so I ask the hon. Members for Fareham (Mr. Hoban) and for Cambridge (David Howarth) not to press their amendments to a Division.

Mark Hoban (Conservative, Fareham)

What a difference a week makes, because a few days ago the Minister was happy to push the long Bill through and to reach the deadline of the end of March, and she did not really care that much about pre-legislative scrutiny and getting external voices in. Her approach was just to make sure that we got the Bill on to the statute book in good time.

In a way, the Supreme Court has perhaps given the Minister an opportunity to wriggle out of that, but the real argument is about the fact that to get the long Bill on to the statute book will take up two days of time in this place and three days of time in the House of Lords. Given that legislative time is disappearing because this Parliament is hurtling towards Dissolution, the Government cannot afford to give up that amount of time to put right the mistakes of their own creation. They need to put right the fact that they failed to put in place the primary legislation to give proper backing for these orders. The Government are hiding behind the excuse of wanting to give proper scrutiny to avoid time being taken up putting this Bill on to the statute book as soon as possible to give those orders the support that they need. That is why I wish to put amendment 1 to the vote. We need to send a clear signal from this Committee that we want to ensure that the mistakes committed by the Government are put right quickly. We believe that they can be put right quickly, with proper parliamentary scrutiny, by 31 March.

Sarah McCarthy-Fry (Labour, Portsmouth North)

I beg to move Government amendment 8, page 1, line 5, at end insert-

'(aa) the Terrorism (United Nations Measures) (Channel Islands) Order 2001 (S.I. 2001/3363), the Terrorism (United Nations Measures) (Isle of Man) Order 2001 (S.I. 2001/3364) and the Terrorism (United Nations Measures) (Overseas Territories) Order 2001 (S.I. 2001/3366);'

Sarah McCarthy-Fry (Labour, Portsmouth North)

It is important that we maintain our terrorist asset-freezing regime not just in the UK, but for the Crown dependencies and overseas territories. Although the Orders in Council that apply to the Crown dependencies and overseas territories were not directly before the Supreme Court, they were also made under section 1 of the United Nations Act 1946 and are therefore vulnerable to being quashed. Amendment 8 therefore adds the Terrorism (United Nations Measures) (Channel Islands) Order 2001, the Terrorism (United Nations Measures) (Isle of Man) Order 2001 and the Terrorism (United Nations Measures) (Overseas Territories) Order 2001 to the list of orders that are validated by the Bill. If we do not make that change, we will leave the Crown dependencies and the overseas territories without a robust terrorist asset-freezing regime, and we would not fully meet our obligation under UN resolution 1373.

Amendments 9 and 10 validate decisions made by the authorities of the Isle of Man, the Channel Islands and the overseas territories by ensuring that it is not only decisions of the Treasury that are validated. The amendments are consequential to amendment 8. If we want the Isle of Man, the Channel Islands and the overseas territories to be covered, the amendments are also needed. Amendment 9 applies to decisions to issue a direction-that is to make a designation-and amendment 10 applies to decisions to grant a licence.

Amendment 11 is also a consequential amendment, which is necessary to implement the previous amendments. It extends the territorial scope of the Bill to the Crown dependencies and the overseas territories for their respective orders only.

Amendment agreed to.

David Howarth (Liberal Democrat, Cambridge)

I beg to move amendment 4, page 1, leave out lines 9 to 11 and insert-

'are declared to have the same legal force as primary legislation'.

David Howarth (Liberal Democrat, Cambridge)

All the amendments and the new clause stand in my name and that of my hon. Friend the Member for Twickenham (Dr. Cable). They bring together two separate issues-one that relates to amendment 4 and one that relates to amendment 5 and the new clause. The other amendments are simply consequential. Having heard the debate in the House all day, I feel that the issue that concerns amendment 5 and the new clause is the one on which Members wants to vote, so I shall press that to a Division.

Amendment 4 would change the terms that the Government use to turn the previous UN orders from invalid legislation into valid legislation. The way in which the Bill works is to deem the orders to be valid, and always to have been valid, under the United Nations Act 1946. The amendment would excise any mention of the Act from the Bill and, instead of deeming the orders always to have been valid, would simply declare them to be valid from now on. The amendment would therefore remove an element of retrospectivity in the technique that has been adopted and, more importantly, would remove from the Bill any reference to the Act as a cover for what the Government are trying to do. The reason for that has to do with the al-Jedda case.

Mark Hoban (Conservative, Fareham)

Before the hon. Gentleman talks about that case, will he clarify something? Would his amendment effectively nullify any action taken under the orders prior to the passing of the Bill?

David Howarth (Liberal Democrat, Cambridge)

Not quite, because of what clause 2 does. To achieve that effect, we would have to vote against clause 2. I am not so annoyed about clause 2 as I am about clause 1, because clause 2 is there to protect the banks, rather than the Government. I know that the banks are unpopular, but it seems reasonable that having relied on what the Government did, the banks should be protected from any untoward consequences; the Government are in a different position.

The judgment in the al-Jedda case states that in circumstances where the Government are legislating to implement a United Nations Security Council resolution, the Human Rights Act and the European convention on human rights do not apply. That is because article 130 of the UN charter says that the UN charter and Security Council resolutions under the charter take precedence over every other treaty. In the al-Jedda case, the House of Lords interpreted that provision as including in the category of all other treaties the European convention. Because of the relationship, as found in other cases, between the European convention and the Human Rights Act, that also means that the Human Rights Act does not apply.

All through the debate, that has been an important point of interpretation of the Supreme Court, because the Supreme Court did not say that the orders were compliant with human rights standards. It said instead that because of the al-Jedda case, it was unable to consider whether human rights standards applied or not. Unless, of course, the al-Jeddah case is reversed on appeal to the European Court of Human Rights in Strasbourg, amendment 4 would leave it open to those affected by this legislation to go to court in this country and challenge it on the basis of human rights standards and to move to obtain a declaration of incompatibility. That is a possibility that we should leave open. We should not slam the door in the face of the courts as the Bill does.

The Chief Secretary has a personal interest in this, because he has certified on the front of the Bill that it complies with the European convention on human rights. At present, that might be a slightly misleading statement, because that might be true only because the convention does not apply at all. I hope that he would wish that the position was more real than that rather artificial one, and that he would argue-I might oppose him on this-that the terms of the Bill are, in reality, compliant. The argument for amendment 4 sounds technical, but it raises a very important issue of principle about the application of the Human Rights Act.

Amendment 5 is a paver for the new clause. The new clause is an attempt to amend the 2009 order in a way that has been called for from all sides of the Chamber in the debate that we have had so far. Its effect is to alter the process by which a person becomes subject to the asset-freezing regime, to change the length of time that a person can be subject to the regime on the basis of reasonable suspicion alone, and to introduce appeal mechanisms both for the bringing into force of the asset-freezing regime and for the licensing regime-a point that has been mentioned in the debate.

Under the order as it stands, the Treasury, acting on the basis solely of reasonable suspicion, and without any prior supervision by the courts, can subject a person to the full asset-freezing regime. There is absolutely no appeal. There is judicial review, and we have debated its adequacy, but the conclusion that I and many other right hon. and hon. Members have come to in the debate is that judicial review is not adequate. There is not only no provision for an appeal, but no limit to the number of times that a direction, which lasts a year, may be renewed. Effectively, that is an indeterminate-life-sentence. The Government say that they will change their ways and the directions will work differently, but in the past they have worked punitively, not just preventively. We all accept that the object of the exercise is to prevent funds going to terrorist organisations, not to punish people who are merely suspected-without any proof in court-of associating with terrorists.

The proposed changes would replace the existing process with one in which the Treasury applied to the High Court for an order to impose an asset-freezing regime. The Court, not the Treasury, would apply the order based on the facts-as in the Australian regime that has been mentioned-about whether the person was connected with terrorism and whether it was necessary to impose the order for public protection. Reasonable suspicion would not be enough; a judgment would have to be made on the basis of the facts as they were, not as the Government simply suspected them to be. The order would last for up to a year, but then, as now, its renewal would be possible through a further Treasury application, which would be judged on the same basis as the first.

I accept, however, that there are emergency circumstances in which applying for a full order might lead to excessive risks. In that situation, the proposed changes would allow the Treasury again to apply to the Court for an interim order, but then, as now, it would be able to do so on the basis of reasonable suspicion. The interim order would be restricted in a way that the Supreme Court itself said was reasonable; it would last only for a month, during which time the Treasury would be expected to apply for a full order; and its extension would be possible only to cover the proceedings on the full order or the time that it took to deal with other relevant proceedings, such as a criminal trial or those under other terrorism legislation.

The 2009 order includes a licensing system, to which Members from all parts of the House have also referred. The regime's problem, which has already been recognised, is that there is no provision for an appeal against the refusal of a licence or against a licence being granted in terms that the persons affected-the subject of the order or their family-find too restrictive. We all know the affects of such orders, especially on the wives of subjects. Several marriages have broken up; there have been mental health problems; and orders have been so restrictive that they have required mothers to ask every day of their children what money they have spent-even on sweets in the local sweet shop. Our new clause would therefore allow full appeals, not just reviews, by anyone who was affected by a licensing order and felt that the licence was too restrictive or wanted to appeal against the refusal of a licence in the first place.

Although this is emergency legislation, and although there is a feeling on all sides that something has to be done quickly, that does not mean that we should carry on doing something that is plainly wrong. It is plainly wrong to give the Executive the power, merely on suspicion, to lock people up without proper, full access to the courts. I come back to what Lord Atkin said in Liversidge v. Anderson, a case that all law students know: amid the clash of war, the laws are not silent. We will debate the question of whether this is a war on other occasions; nevertheless, the law should not be silent.

Mark Hoban (Conservative, Fareham)

I find it a bit rich for the hon. Member for Cambridge (David Howarth) to propose these amendments and this new clause given that he voted against the idea of having a sunset clause that lasted until 31 March because he felt that that would not provide enough time for proper consideration of the draft Bill. Yet he is proposing a set of amendments and a new clause that would fundamentally change the law in this area, and he thinks it appropriate to deal with them in the space of an hour and a half on a Monday night without proper exposure to the wider world. I know that consistency is not necessarily a virtue for which Liberal Democrats are renowned, but he needs to be consistent about this matter. This is not the appropriate occasion on which to introduce into the Bill safeguards of the kind that he has outlined, which would open the door to enabling these provisions to be challenged through the court system on the grounds of human rights.

I am happy to acknowledge that the hon. Gentleman raises some fundamental issues. There are important issues to be debated but, given that there is a sunset clause in the Bill, I question whether now is the right time to do so with an expectation of changing the law to this effect. He may well say later that these are probing amendments, not a huge attempt to change the law, and that may be fine, but he gave no indication that that is the case. This is not an appropriate opportunity to debate such fundamental reforms, which would need proper scrutiny and engagement with external stakeholders, and I am a bit surprised that he has chosen to table these amendments at this time.

Elfyn Llwyd (Plaid Cymru, Meirionnydd Nant Conwy)

I rise to support the amendments, as I believe that they would be a very helpful step forward. The hon. Member for Fareham (Mr. Hoban) said that it is a bit rich of the Liberal Democrats to vote in the way that they did. I voted that way, as well, but I am equally concerned about the purport of this Bill.

As we have heard, there are two main issues regarding what the Bill does: a lack of scrutiny and a lack of legal redress, both of which would be dealt with in the second amendment to which the hon. Member for Cambridge (David Howarth) referred. Like others in this Chamber, I am sure, when I hear the words "reasonable suspicion" I always think, "How is that tested?" Usually, the normal legal procedure then comes in, and a tribunal of some kind decides whether the suspicion was held on a reasonable basis. In this instance, there is no such tribunal to make that decision. I am not here to cast any aspersions on the Exchequer Secretary, the Chief Secretary or anybody else, but we would hope to put in place a form of legislation that will stand the test of time and be a fair resolution of a problem that, I acknowledge, does exist. I do not live in a cocoon: there is a problem, and I recognise that that is so. As we are going to rush everything through today, this is obviously an appropriate time to discuss these amendments, because when can we discuss them, if not now? Surely it is important that we consider them now.

Of course the Government might care to respond in some way to the purport of the amendments in due course. As we heard earlier, Lord Hope, the deputy president of the Supreme Court, said:

"It is no exaggeration to say...that designated persons are effectively prisoners of the state...their freedom of movement is severely restricted without access to funds or other economic resources, and the effect on both them and their families can be devastating."

He went on to say that the orders

"strike at the very heart of the individual's basic right to live his own life as he chooses."

His colleague in the Supreme Court, Lord Brown, said:

"The draconian nature of the regime imposed under these asset-freezing Orders can hardly be over-stated."

The hon. Member for Cambridge (David Howarth) said that his amendment would make the Bill human rights compliant by deleting the reference to the UN. I think that that is basically where we are. He is a law professor, and although such matters are detailed, he explained them clearly. It is not a simple area of law, but I agree that that would be a sensible way forward. It would at least invoke the protection of compliance with human rights as we understand them.

New clause 1 would impose a duty of scrutiny. It would also give the courts an opportunity to review a finding later-there is nothing wrong with that, one hopes-and give the person subject to the order some form of legal redress. As hon. Members from all parties said, merely falling back on the old excuse that a person can seek redress by way of judicial review is not good enough. The people we are discussing are asset-stripped. How are they to finance an application for a judicial review?

In any event, the judicial reviews that we have discussed are subject to the Wednesbury principle. In other words, the major question is whether the Minister concerned acted reasonably in the circumstances. If only part of the information against the individuals designated is known to them, how on earth can they possibly challenge on those grounds? The hon. Member for Hendon (Mr. Dismore) made that point clearly.

The amendments are certainly an improvement on the Bill. The hon. Members for Twickenham (Dr. Cable) and for Cambridge must have spent a boring weekend considering so many minute drafting points. Maybe the hon. Member for Twickenham was not in Twickenham, as I was, but that is another story. I had a legal low, not a legal high, but I digress.

The amendments are seriously worthy of consideration and improve the Bill. I am unhappy about the Bill, but I understand that the Government are in a bit of a quandary and need to do something. However, if we are to have these time constraints, surely we should be able to discuss the measures in detail so that some form of protection could be built into the Bill. The hon. Member for Cambridge has done a good job of drafting his amendments in such a short time. I hope that the Government can respond to them positively.

Sarah McCarthy-Fry (Labour, Portsmouth North)

I thank all hon. Members for their contributions to the debate on the amendments, including the hon. Member for Cambridge (David Howarth), who moved them, the hon. Member for Fareham (Mr. Hoban), who spoke for the Opposition, and the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd), if I have pronounced that correctly.

Before I address the amendments, I want to correct a point about the al-Jedda case. The case concerned the relationship between United Nations obligations and the European convention on human rights, when there is a conflict between the two. In al-Jedda, the House of Lords concluded that UN obligations override convention rights. That is, UN obligations take precedence when there is a conflict. However, the al-Jedda point arose in our case in relation to the al-Qaeda order only, which the Bill does not address. Individuals do not have a right of access to a court to challenge their designation. The al-Jedda point did not arise in relation to the terrorism orders-the subject matter of this Bill-because those orders do not contravene human rights in that way.

Amendment 4 is intended to ensure that the orders have the same legal force as primary legislation. Amendment 6 adds a reference to the Bill in part 6 of the Counter-Terrorism Act 2008. I reject both amendments because I do not think they are needed, and I hope that the hon. Member for Cambridge will withdraw them. Giving the orders status as primary legislation would give the Government more protection from legal challenge than we believe would be right. The orders could not then be quashed by a court on human rights grounds. That is because a court can strike down an Order in Council on human rights grounds, but it can only declare an Act of Parliament incompatible with the Human Rights Act 1998. Our short Bill will ensure that our Orders in Council can continue to be set aside on human rights grounds until the permanent Bill is enacted. Adding a reference in the Bill to the Counter-Terrorism Act 2008 is unnecessary because the Act already covers all decisions made under our orders.

I move on now to amendment 5, new clause 1 and amendment 12. I listened with interest to the arguments that the hon. Members for Cambridge and for Meirionnydd Nant Conwy put forward. I want briefly to go back over why I feel that the substance of the proposals is wrong, but the main issue is that these are arguments for us to have on the longer Bill.

Accepting the proposals would fundamentally change the nature of asset freezing. It would mean all freezing decisions being taken by the courts, and not by Ministers as at present. Ministers would be able only to refer freezing proposals to the High Court. Freezes based on reasonable suspicion could last for only one month, and would be renewed after a month only if a court could be persuaded that the subject were a terrorist. That would involve a higher test than reasonable suspicion, and it could be a test as high as a conviction. The changes would significantly reduce the operational effectiveness of the asset-freezing regime, which is designed to be preventive.

Reasonable suspicion is a legal basis for asset freezing which is endorsed by the Financial Action Task Force. Under the current system, we do not simply rely on reasonable suspicion, however. Designations must also be necessary for public protection, which provides an additional safeguard. The proposals in these amendments would alter key aspects of the regime, including who made the decisions and what the legal standards should be. Those are fundamental points. The purpose of this temporary Bill is not to remake our asset-freezing regime; it is to restore the existing regime for a temporary period to allow for thorough consideration of the full Bill.

Martin Horwood (Liberal Democrat, Cheltenham)

Am I right in thinking that, when a suspension of the Supreme Court's decision was requested, the Court refused it on the ground that it would simply be

"a procedure that is designed to obfuscate the effect of its judgment"?

In other words, did not the Court expect us to change the principle behind the regime, rather than simply try to find a way round its judgment?

Sarah McCarthy-Fry (Labour, Portsmouth North)

No, the basis for the judgment for not giving us a stay was that the Court did not have a legal basis to do that, given that it had quashed the original orders.

Many hon. Members have talked today about not rushing into legislating on issues of importance. The problem that I have is trying fundamentally to rewrite our existing scheme with a bare minimum of discussion and scrutiny in the few hours that we have had tonight. I look forward to debating the substance of the hon. Member for Cambridge's proposals in due course, but the time to debate such significant changes is when we consider the permanent legislation in detail, not now. Our priority now is to restore our existing regime, as the Bill seeks to do, and to create time for us to consider in greater depth how the permanent legislation should be framed. On that basis, I invite the hon. Gentleman to withdraw his amendment.

David Howarth (Liberal Democrat, Cambridge)

The Minister made a legal point at the start of her speech, but I do not think she could fully have considered the judgment by Lord Phillips in the Supreme Court, who clearly considered the position under al-Jedda and the human rights position before discussing the individual merits of the cases against either order. What the Minister put to the Committee was not the legal position, but simply her hope about what the legal position might be, were the matter to return to court-which, I am afraid, is where it will probably end up.

The arguments against the amendments seemed simply to be that the time is not ripe to discuss the detail of these provisions, but we are being asked to put them into force for almost another year. I remind the Committee that the Supreme Court was very clear about the degree to which these orders undermine fundamental rights. The hon. Member for Fareham (Mr. Hoban) talked about consistency, and we consistently voted against the timetabling order earlier today because we thought it would be better to discuss these matters in more detail with more time. However, we have to deal with the time we have, and the very least we can do in that time is to put right the main injustices and faults of the legislation before us. That is what the amendments attempt to do.

In particular, the new clause, and amendment 5 which would pave the way for it, would put right the most obvious faults in the legislation-faults that the hon. Gentleman's own Back-Bench colleagues referred to again and again in their speeches on Second Reading. They included the lack of appeal and of judicial process. We do not have to wait for months to put that right: we can do so here and now.

Amendment 4 deserves further discussion, and the Government's response shows that they need to think about it a lot more, but amendment 5 is something that we should vote on here and now. I beg to ask leave to withdraw amendment 4.

Amendment, by leave, withdrawn.

Amendment proposed: 5, page 1, line 11, at end insert-

', but subject to the amendments made by section [Amendments to the 2009 Order]'.

David Howarth (Liberal Democrat, Cambridge)

I will be very brief. I simply want to say that although we did not object to the Bill receiving its Second Reading, we find the methods adopted by the Government in clause 1, especially now that they have not been amended in any significant way- [ Interruption. ]

David Howarth (Liberal Democrat, Cambridge)

Thank you, Mrs. Heal. As I was saying, although we did not vote against Second Reading and we accept the need for action on this issue, we are disappointed that the Government seem so obdurate, in resisting any suggestion to improve how the main part of the Bill-clause 1-works, and especially in their utter complacency on the issue of human rights and their refusal to accept the need for proper scrutiny, review and appeal. For that reason, I shall be advising my colleagues to vote against clause 1 stand.

Sarah McCarthy-Fry (Labour, Portsmouth North)

I am rather disappointed with the Liberal Democrats' position. As a Government we want to ensure that the Bill has sufficient scrutiny as it goes forward. I made it clear in my response to the amendment proposed by the hon. Gentleman that I do not think it appropriate that such a fundamental change should have been made with less than a few hours' scrutiny. As I said to him, I look forward to debating those points as we go forward. I am very disappointed that the Liberal Democrats are choosing to vote against a clause that prevents terrorists from having access to financing or the financial system. Quite frankly, it is shameful.

Clause 3 — Short title, commencement and extent

Sarah McCarthy-Fry (Labour, Portsmouth North)

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

I thank all Members for their contributions.

We consider the Bill to be necessary to the United Kingdom's national security. It will enable us to act swiftly in order to maintain the asset-freezing regime under the Orders in Council on a temporary basis. We will, of course, table further legislation to introduce a terrorist asset-freezing regime in primary legislation, allowing time for Parliament to scrutinise our proposals fully.

This temporary Bill is important, and I am grateful to Members in all parts of the House for the support that has enabled us to complete its progress today on an urgent basis. I thank the officials for their hard work in drafting the legislation and for their support, and I thank the banks for their co-operation.

I recognise that many of the points made today will be relevant to the fuller debate on the lasting legislation, and I look forward to that debate with great interest. Meanwhile, I hope that this Bill will proceed to the other place, and will be enacted soon.

Mark Hoban (Conservative, Fareham)

I echo the Minister's thanks to all who have taken part in the debate. It has been a good debate.

The Bill will complete all its stages here today, and will proceed to the House of Lords following its Third Reading, because we are where we are. Although there are arguments to be had about why the Government are in such a mess, we accept the reality that we must help them to get out of that mess so that we can ensure that there is a proper regime to freeze terrorist assets. I am sure that we shall want to continue the debate about some of the safeguards and other issues that have been discussed today when, in due course, we deal with the longer Bill.

David Howarth (Liberal Democrat, Cambridge)

The Liberal Democrats will not oppose the Bill on Third Reading either, because we did not oppose it on Second Reading, but we are still disturbed by the speed with which it has gone through the House today, which is why we voted against the allocation of time motion. We believe that more time was available at this stage to allow us to consider the Bill more carefully. We shall now turn our attention to the other place to see whether it can correct some of the problems before the Bill goes on to the statute book.

This is not a time for shouting across the Chamber that a member of another party is soft on terrorism, or other nonsense of that sort. We all share the objective of ensuring that funds do not reach terrorist organisations. What concerns the Liberal Democrats is the means that have been adopted to produce that end, and whether those means are excessively oppressive.

We also have concerns about an important point that was made on Second Reading, but which the Government do not seem to have taken on board: are the means adopted effective, given that two of the subjects in the case before the Supreme Court have slipped away and disappeared? The following question therefore remains: is the effect of the legislation to prevent terrorism events from taking place, or does it have the unintended effect of making it more difficult to keep track of the very people the Government want to keep track of? We have not had sufficient time to debate that. The Government started to make a response to that point, but time petered out, as ever on these occasions. We look forward to the debate in the other place, and hope there will be more answers there. In the meantime, we will not oppose the Bill on Third Reading.

Question put and agreed to.

Bill accordingly read the Third time and passed.