HL Deb 03 February 2003 vol 644 cc32-46GC

In section 31 of the Armed Forces Act 2001 (power to make provision in consequence of enactments relating to criminal justice), in subsection (7)—

  1. (a) after "section" there is inserted "section 5 of the Criminal Justice (International Co-operation) Act 1990 and",
  2. (b) for "is" there is substituted "are"."

On Question, amendments agreed to.

Schedule 4, as amended, agreed to.

Schedule 5 [Repeals]:

Lord Bassam of Brighton moved Amendment No. 161E: Page 77, line 6, column 2, leave out "and 8" and insert ", 8 and 11

On Question, amendment agreed to.

Schedule 5, as amended, agreed to.

Lord Bassam of Brighton moved Amendment No. 162: Before Clause 91, insert the following new clause— NORTHERN IRELAND An Order in Council under paragraph 1(1) of the Schedule to the Northern Ireland Act 2000 (c. 1) (legislation for Northern Ireland during suspension of devolved government) which contains a statement that it is made only for purposes corresponding to those of Chapter 2 of Part 3 of this Act—

  1. (a) is not to be subject to paragraph 2 of that Schedule (affirmative resolution of both Houses of Parliament), but
  2. (b) is to be subject to annulment in pursuance of a resolution of either House of Parliament."

The noble Lord said: This is a procedural amendment to enable Northern Ireland to replicate the provisions in Part 3, Chapter 2 of the Bill—that is, mutual recognition of driving disqualification within the UK—by way of Order in Council subject to the negative resolution procedure. The clause is necessary due to the current suspension of the Northern Ireland Assembly.

The provisions of Part 3, Chapter 2, mutual recognition of driving offences or disqualifications between Great Britain and Northern Ireland, cannot come into force until reciprocal measures are in place in Northern Ireland. The new clause will expedite Northern Ireland legislation and allow the earliest introduction of the Great Britain/Northern Ireland mutual recognition measures. We think it important that the existing anomaly whereby a disqualification imposed in Northern Ireland is not recognised in Great Britain is closed as quickly as possible. I beg to move.

On Question, amendment agreed to.

Clause 91 [Supplementary and consequential provision]:

Lord Filkin moved Amendment No. 163: Page 60, line 25, after "instrument" insert "(other than an instrument to which subsection (5A) applies)

The noble Lord said: The purpose of Clause 91 is to allow the Secretary of State—or Scottish Ministers, where the subject matter falls within the competence of the Scottish Parliament—to make consequential and incidental provisions that are necessary to give full effect to the provisions of the Bill. The clause is needed to ensure that the Bill functions properly when it comes into force and that the legislation is as effective as possible.

I am well aware that noble Lords are concerned by the use of those so-called Henry VIII provisions in legislation—I recollect our discussions during the passage of the Nationality, Immigration and Asylum Act 2002—which appear to give Ministers sweeping powers to amend legislation.

Indeed, the Delegated Powers and Regulatory Reform Committee published a special report on the matter on 16th December 2002, which was debated on the Floor of the House on 14th January, when several Members of the Committee were present. The Committee concluded that there are, no doubt occasions where Henry VIII powers to make incidental, consequential and similar provision are justified",

especially where, otherwise, the number of amendments would result in a disproportionate increase in the length of a Bill, or where it would be difficult to anticipate the full extent of such amendments during a Bill's passage. The Committee recommended that where these powers are used, the department responsible for the legislation should provide a full explanation as to the need for the power. I hope to be able to provide that in my answer today.

I now turn to the opposition amendments. If we understand it correctly, the purpose of the first two opposition amendments is to ensure that any future statutory instruments making supplementary provisions to the Bill—regardless of whether they would amend primary or secondary legislation—would be subject to an affirmative, rather than a negative resolution order in both the UK and Scottish Parliaments.

The Government resist those amendments on the grounds that they would hamper the effective operation of the Bill. Their effect would be to clog up parliamentary time with debates on minor and technical statutory instruments that neither merit nor benefit from discussion. The Government believe that any future amendments to the Bill should be subject to scrutiny proportionate to the scope of the amendment, which the amendments do not take into account.

The Delegated Powers and Regulatory Reform Committee report on the Bill, published on 11th December, considered the power in Clause 91. The report concluded that although the negative procedure is sufficient for any amendments to secondary legislation, affirmative procedure should apply to amendments of Acts of Parliament, because of the importance of their subject matter.

In the light of and in line with the committee's recommendations, the Government have therefore tabled Amendments Nos. 163, 165, 166 and 168. Those government amendments comprehensively address concerns raised by the Delegated Powers and Regulatory Reform Committee and the Opposition regarding adequate scrutiny of the power. The amendments ensure that any consequential amendments arising from the Bill that are made to Acts of Parliament will be subject to the affirmative resolution of both Houses, while any amendments to secondary legislation will be subject to negative resolution. The Delegated Powers and Regulatory Reform Committee has indicated that it is happy with the Government's approach.

I believe that the government amendments strike an effective balance between providing an appropriate level of parliamentary scrutiny of the powers in the clause, while at the same time ensuring that parliamentary time is used effectively. I therefore recommend that those amendments be accepted.

Turning finally to the third opposition amendment, Amendment No. 169, which would "sunset" the power granted to the Secretary of State in Clause 91 to make further statutory provisions to the Bill one year after it comes into force. That would mean that any further amendments identified after that time would have to be made by primary legislation, whenever an opportunity arose.

Although I understand the intention behind the amendment, I cannot accept it. Limiting the duration of the powers of the clause to a year after the commencement of the Bill would restrict the possibility of identifying and then scheduling adequate parliamentary time to debate any subsequent amendments. As I hope that the Committee will agree, the Bill is highly complex and amends a substantial amount of previous legislation. Although every effort has been made to ensure that all consequential provisions have been accounted for, it is possible that others may arise—for example in relation to the highly technical road traffic provisions of Part 3.

Such consequential amendments may not come to light within a year after the Bill comes into force, but if that power had expired, we would be unable to make changes necessary to make the legislation fully effective. For those reasons, I am unable to accept the amendment. Especially given the nature of what we are dealing with—serious crime and terrorism—it is important not to have delay in ensuring that the Bill can operate in the way in which the Government intend, which I hope that the Committee supports.

For those reasons, the government amendments are necessary. I trust that the Opposition will recognise that we have responded adequately to their concerns by following the advice and guidance set out by the Delegated Powers and Regulatory Reform Committee. I beg to move.

5.30 p.m.

Baroness Anelay of St Johns

I shall speak to Amendments Nos. 164, 167 and 169, which stand in my name. It may be for the convenience of the Committee if I now speak also to clause stand part, to round off the debate.

First, I make it clear that I welcome the government amendments. As the Minister said, this is an enabling clause that gives the Government the opportunity to amend or repeal primary as well as secondary legislation by statutory instrument, with or without further parliamentary scrutiny.

The Minister rightly referred to the recent debate on the Floor of the House of the special report of the Delegated Powers and Regulatory Reform Committee. I am aware that my noble friend Lady Carnegy took part in that debate. I regret that I was not able to do so, simply because at three days' notice the Government brought forward the debate by a day and it was impossible for me to rearrange meetings on other Bills in which I had to take part. Naturally, I have carefully read Hansard and spoken to noble Lords who took part in that debate.

I have made it clear that I tabled the amendments to cover the comments of the Select Committee and to enable a wider debate on the matter. Later, the Government tabled their own amendments, which I welcomed.

I still have fundamental concerns about how such clauses may be used. We need to see them early in the course of a Bill's passage through Parliament, and on this occasion the Government cannot be faulted on that. The clause has been in the Bill from the start, unlike the equivalent clause in what was then the Nationality, Immigration and Asylum Bill, to which the Minister referred. In that Bill, the clause popped its head up at Third Reading, at the last gasp after the Bill had already passed through another place. On this Bill, the Government have got the timing right.

There are three issues on which I want to make brief comments, all of which I derive from the Select Committee report and the debate on the Floor of the House. There should be a presumption in favour of the affirmative procedure in certain circumstances, and an appropriate form of wording for the Henry VIII clause should be adopted. I also want to discuss the sunset clause.

The Minister said that the Select Committee had recommended the presumption in favour of affirmative procedure, and that it would be the good practice in future. The Government have used it today. Will they use the procedure in every Bill in future so that when they table a Henry VIII clause and there will be a transitional and consequential amendment to primary legislation, the orders will be subject to the affirmative procedure? That is not the case in the Courts Bill. I appreciate that it would have been drafted before the Select Committee report, but we need to know whether that is the good practice approach that the Government will adopt, otherwise they will have to respond continually to amendments from the Opposition on such matters.

The Select Committee posed the question, "Could a uniform wording of such clauses be adopted?". It came to the conclusion that that would not be appropriate, and that it may have to vary from case to case properly to meet the exigencies of a Bill. I entirely accept that conclusion, but will the Minister tell us whether the Government are taking steps to review properly the drafting of clauses between departments? The Home Office should talk to the Lord Chancellor's Department and other departments, so that where possible they achieve uniformity of approach. That would help those whose job is afterwards to interpret the application of such Bills.

I have continuing concern on sunset clauses. During the debate on the Floor of the House the noble Lord, Lord Dahrendorf, the chairman of the Select Committee, suggested that the clauses should be subject to sunset provision. He suggested that they be put into every Bill to cope with the likelihood that if they were not present the Government might let things drift. They might not focus their mind properly on the drafting of Bills in the first place, and let any further drafting drift. He was absolutely right to say that.

When the Minister referred to sunset clauses and to Amendment No. 169 he did not attack the principle underlying a sunset clause. He said that one year was too short in respect of the Bill, because some complex issues need to be addressed on driving disqualifications and other matters on which international agreements naturally have to be reached. I reassure him that the one-year period chosen was a tool for debate. Amendment No. 169 was drafted before I had read the speeches made by the noble Lord, Lord Dahrendorf, and other noble Lords on the Floor of the House about the Select Committee report, and before I had taken soundings with other noble Lords.

I am now of the view that one year is too short. I am persuaded that the noble and learned Lord the Leader of the House is right to say that three years would be the appropriate period for imposing a sunset clause.

Although naturally I would not press my amendment today, as we are in Grand Committee, I feel strongly that I should bring it back on Report using the period of three years. In responding, will the Minister say whether he agrees with the noble and learned Lord, Lord Williams of Mostyn, that three years is a better figure?

On clause stand part, I accept that there are occasions on which such clauses have validity, and when one needs the opportunity for later drafting changes. We need to ensure that they are not used as a matter of course, and as a get-out clause for sloppy drafting. I do not mean sloppy drafting by those who do the hard work behind the scenes of putting pen to paper, or finger to typewriter as is more likely these days. I refer to sloppy drafting by Ministers, who may change their minds a dozen or more times before they are satisfied with the policy intention that they give to the drafters, whose job is then to make it reality in the Bill.

As a caveat, I accept that the clauses have to be there, but I shall watch each and every one of them to ensure that they are not overused.

Lord Goodhart

As a former member of the Select Committee on Delegated Powers and Regulatory Reform, and as someone who took part in the debate to which the Minister referred, I naturally welcome the Government's acceptance of the principle that clauses on consequential amendments should require that the affirmative procedures be used when there is any amendment of existing primary legislation.

The sunset clause did not arise from any recommendation in the Select Committee's report. It was a personal recommendation by my noble friend Lord Dahrendorf. As I recall, I expressed some sympathy with it during the debate. Obviously it has considerable implications—they go well beyond the Bill—as to whether there should be a general principle of sunset clauses. Certainly, I find that the arguments in favour of three years rather than one year have considerable force. At this point, I would not like to commit my colleagues to supporting the amendment that calls for a sunset clause on Report, but we could do so.

Baroness Carnegy of Lour

I am a member of the Select Committee on Delegated Powers and Regulatory Reform. Of course, I welcome what the Government have done, as did the noble Lord, Lord Goodhart.

In relation to what was said by my noble friend Lady Anelay, the Government could save a great deal of legislative time if they asked departments to get together and try to find a more common approach to the wording of such clauses. If a clause hitherto unseen of such a nature appears on a Bill, it is necessary for the Opposition to question why it is worded as it is. If the clauses will recur, it would be in the Government's interests to consider the matter. The Minister could ask his right honourable friend to consult others on the subject, as it is quite important.

As was said by the noble Lord, Lord Goodhart, the sunset clause was not a recommendation from the Select Committee but the personal proposal of the noble Lord, Lord Dahrendorf. It was an interesting proposal. He has thought about the subject a lot, and I am sure that it will be followed up as time goes on. In this case, my noble friend has a good point in that a sunset clause could have a place in the Bill, albeit one involving a longer period as the Minister illustrated that a year was probably too short in this case. I look forward to seeing what happens on Report.

Lord Filkin

The noble Baroness, Lady Anelay, raised three initial questions to which I shall seek to respond. Then I shall come to points raised by other noble Lords on the amendments.

The noble Baroness, Lady Anelay, asked whether the Government would always use the procedure in future, and gave the Courts Bill as an example. I refer to the response of my noble and learned friend Lord Williams of Mostyn when he was asked the same question. He said: My Lords, it is better to rely on the committee, which has the expertise and is non-partisan. Our experience has been rather successful. Rather than having an overall presumption, I suggest that it is better to rely on the specific, distinct expertise of the committee in any particular case. We are certainly more than happy to follow that line. As I have said in the past, in my experience since 1997, I do not believe that we have ever gone against a recommendation from the committee of the noble Lord, Lord Alexander, and now that of the noble Lord, Lord Dahrendorf. We should move forward in that way".—[Official Report. 14/1/03; cols. 186–87.] I would infer that as meaning that we would take serious note of the Committee and would have to have good reason to fly in the face of it, without giving an automatic presumption.

Could there be more unified wording? As ever, I am advised that we cannot make commitments for the whole of the Government, which seems a great shame. Nevertheless, I recall the discussions on the then Nationality, Immigration and Asylum Bill when Parliamentary Counsel said that what was suggested as an amendment made no significant difference, and/ or that its wording was appropriate for the circumstances. That may have been right, or perhaps that is what Parliamentary Counsel would have said anyway.

Without wanting to signal anything particularly major, I shall say that we shall correspond with the Lord Chancellor's Department on the issue, to see if there is any scope to reduce needless variation, and focus the variation where it is essential. However. I do not invite the Committee to get overexcited about the product of that reflection. Of course, it may not be completed by Report, given the time that some such processes take.

The third point was on sunset clauses. I appreciate the comment that the amendment was probing, and that three years may be the period brought back on Report. At this stage, I shall not say a great deal more than that. My noble and learned friend Lord Williams stated during the debate on the delegated powers that, the sunset clause would become, by and large, eclipse legislation and we would spend a disproportionate amount of time every year looking at sunset clauses".—[Official Report, 14/1/03; col. 185.] By that, I think that he meant that one could spend time setting the sun, wherever it was.

At heart, the issue is whether one can be certain that one has identified all the consequential and incidental amendments that might be necessary. The second question is whether the consequence of not doing so is serious or trivial. The debate will probably have to focus around those two points, although I and others may need to consider further matters before we return to the subject on Report.

In short, I am signalling that we will consider the points made without signalling that we shall necessarily find a meeting of minds on the sunset clause, or that one should necessarily expect a standardised wording on such issues in the near future, if ever. However, we will certainly consider them.

Baroness Anelay of St Johns

I am very grateful to noble Lords who have participated in the debate. The noble Lord, Lord Goodhart, made the point that it was important that there be a presumption in favour of the use of the affirmative resolution when scrutinising later changes to primary legislation. In response, the Minister—I too shall quote part of a speech in a moment—referred to the noble and learned Lord the Leader of the House, who appeared to brush sunset clauses aside.

As I read the debate, and then watched it on the parliamentary channel, it appeared that the noble and learned Lord suggested that it would become overburdensome if sunset clauses dealt with both secondary and primary legislative changes—if they topped off everything after one year. I hope that my proposal of three years is a far more positive way forward. In the interim, affirmative resolution will be used for changes to primary legislation, but certainly three years will be a helpful way forward.

I direct the Minister to the helpful quotation that came my way from the noble and learned Lord, Lord Williams of Mostyn. He referred to the recent work in the Grand Committee on the Police (Northern Ireland) Bill, and in regard to 50:50 recruitment in the post-Patten proposals he said: That is quite a useful scheme, providing for statutory review not more than every three years and a requirement for renewal not more than every three years. That is a device. I cannot be quite as nuclear as the noble Lord, Lord Dahrendorf".—[Official Report, 14/1/03; col. 185.] He then went on to use the words that the Minister chose to quote. He was being positive towards the idea of a proper approach to ensuring that we do not simply let Henry VIII clauses drift on for ever.

My noble friend Lady Carnegy kindly supported the idea of sunset clauses and said, quite rightly, that one year would be too short.

I was selective about my quotation and the noble Lord, Lord Goodhart, was absolutely right to ensure that the noble Lord, Lord Dahrendorf, was correctly quoted. I said that the noble Lord, Lord Dahrendorf, gave his support to sunset clauses. What I should have added was that he said: Were I to add such a revolutionary proposal to the recommendations in the committee report, I should be transgressing my chairman's remit considerably".—[Official Report, 14/1/03: col. 169.] I appreciate that he was speaking in his capacity as chairman that day, but in my view he quite rightly allowed himself the little luxury of being human at the end by making a very sensible proposal in addition to the other sensible proposals of the Committee.

At this stage, thinking forward to what we might to do on Report, I shall not move my amendment.

On Question, amendment agreed to.

5.45 p.m.

[Amendment No. 164 not moved.]

Lord Filkin moved Amendments No. 165 and 166: Page 60, line 27, at end insert— (5A) A statutory instrument containing such an order which adds to, replaces or omits any part of the text of an Act is not to be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament. Page 60, line 28, after "instrument" insert "(other than an instrument to which subsection (6A) applies)

On Question, amendments agreed to.

[Amendment No. 167 not moved.]

Lord Filkin moved Amendment No. 168: Page 60, line 30, at end insert— (6A) A statutory instrument containing such an order which adds to, replaces or omits any part of the text of an Act or of an Act of the Scottish Parliament is not to be made unless a draft of the instrument has been laid before, and approved by a resolution of, the Scottish Parliament.

On Question, amendment agreed to. [Amendment No. 169 not moved.]

Clause 91, as amended, agreed to.

Clause 92 agreed to.

Baroness Anelay of St Johns moved Amendment No. 170: After Clause 92, page 61, line 3, at end insert— ( ) No order may be made under subsection (1) until—

  1. (a) the Extradition Bill has received Royal Assent; and
  2. (b) the Secretary of State has certified that the provisions of this Act and that Act are compatible."

The noble Baroness said: Perhaps I can be briefest of all on this amendment, which is designed to get an assurance on record that the Minister believes that the provisions of the Bill and the Extradition Bill are compatible. As we are aware in regard to Clause 83, hot surveillance could ultimately lead to the police or Customs officers wanting to effect an arrest. We have to be sure that there is no conflict between this Bill and the Extradition Bill when it finally reaches this House. I beg to move.

Lord Filkin

I presume that the amendment arises from the Opposition's fear that, under the provisions of the Extradition Bill, foreign officers might be granted power to arrest UK citizens while carrying out cross-border surveillance operations under the provisions of this Bill. That is a confusion of what the Bills permit.

As the noble Baroness will recall, in our lengthy discussions of Clause 83 we made it absolutely clear that foreign officers would not have any executive power, which means powers of arrest or search and seizure, while in the UK. The provisions in the UK permit them to carry out surveillance operations only, during which time they are not expected to make contact with the suspect. They will have no executive or coercive powers.

The Government have stated repeatedly in another place their commitment that we have no plans to designate anyone other than a British law enforcement officer to execute warrants under the Extradition Bill. Arrests will be carried out only by British police officers or British law enforcement officers, such as a member of Her Majesty's Customs and Excise or one of the service's police forces. No one, other than a constable, will be able to execute a European arrest warrant or others designated as British law enforcement officers. I am sure this matter will be debated at length once the Extradition Bill is introduced in this House. However, I can put on record that the position that I have stated above will not differ.

I am not convinced that the amendment will achieve what is intended. Preventing the commencement of the provisions of the Bill until the Extradition Bill received Royal Assent would not serve a purpose. The two pieces of legislation deal with entirely different circumstances and powers. As the Committee is aware, the thrust of this legislation is to improve the way in which we provide legal assistance to other countries both within and beyond the EU. The Extradition Bill deals with reforming our current extradition proceedings. Both Bills implement the European framework decision but that is where the similarities end.

Parliamentary counsel and those who instruct them have taken great care to ensure that each new Act of Parliament sits carefully within the framework of existing legislation so that inconsistencies do not arise, which I believe is the assurance that the noble Baroness, Lady Anelay, sought. I hope that the explanation will satisfy her and that she will feel comfortable in withdrawing her amendment.

Baroness Anelay of St Johns

I am grateful to the Minister for those assurances. I am intrigued by his comment that the officers will not be expected to make contact with a suspect. There may be circumstances in which they have no choice but to do so as they are part of an undercover team. However, those matters will be debated yet again on another day.

The Minister is right to emphasise the fact that an arrest will be by a British police officer or a law enforcement officer. When the Extradition Bill comes before us we look forward to debating how that dovetails in with the surveillance provisions in this Bill. The most important point was the one made by the Minister at the end of his explanation: that the draftsmen seek to reconcile different Bills. I do not know how they do it and I am glad that I am not a draftsman. I am only sorry that they have to sit listening to people like me pulling them apart to try to make them make even more sense. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 92 agreed to.

Clause 93 [Extent]:

Lord Wallace of Saltaire moved Amendment No. 171: Page 61, line 6, at end insert— ( ) Her Majesty may, by Order in Council, direct that any provision of this Act shall extend, with such exceptions, adaptations and modifications, if any, as may be specified in the Order, to any of the Channel Islands or the Isle of Man

The noble Lord said: I tabled the amendment, which contains the standard phrase used when Bills are extended to the Crown dependencies, in order to test why the Bill does not cover Crown dependencies. I have a general and a specific reason for doing so.

In recent years in this House I have been increasingly puzzled as to why this clause appears in some Bills and not in others. I do not understand whether there is an overall rationale for it and what negotiations go on behind which closed doors as to how they operate. It would be helpful if the Committee were better informed about the relationship between the Crown dependencies and the United Kingdom, in particular given the extent to which European Union legislation now impinges on domestic law.

My specific reason for tabling the amendment is that if we are talking about international co-operation on crime—Chapter 4 of the Bill relates to bank accounts and all the implications of money laundering—the Channel Islands and the Isle of Man have a thriving industry in terms of off-shore banking. It seems self-evident that the Bill should therefore extend to those Crown dependencies. It may be that the Minister is about to tell us that other arrangements have been made in this instance. I am well aware that in recent years substantial improvements have been made in the financial control mechanisms in the Channel Islands and in the Isle of Man. An inquiry was undertaken by the noble and learned Lord, Lord Williams of Mostyn—it was certainly under his oversight—shortly after the Government came into power. If we are to have financial havens operating within the geographical limits of the European Union and closely associated with London, we must be concerned that they are not at the same time criminal havens. Even since that tightening of their procedures, there have been several instances—especially of Nigerian money that was passed through those places—in which there ought to have been better regulation than we have had so far.

I am concerned that there should be any suggestion of cherry-picking of which EU legislation is accepted and which is not. I have always been puzzled by the extent to which Gibraltar tends to opt in to things of which the Channel Islands opts out and vice versa. I have never fully understood how that happens. We are asking for an explanation why the Bill does not apply to the current dependencies, as do so many other Bills of this sort. In the longer term, we want some clarification from the Government as to how and why some Bills so extend and others do not. I beg to move.

Lord Monson

Perhaps I may first enlighten the noble Lord, Lord Wallace, about Gibraltar. Gibraltar is part of the EU in some respects; the Channel Islands are not part of the EU at all; nor is the Isle of Man, so far as I know.

I listened carefully to what the noble Lord, Lord Wallace, said. I am sensitive about any attempts, even for the best of motives, to chip away at the autonomy of those self-governing territories, which are not part of the United Kingdom and never have been. Nor, as I said, are they part of the EU. I do not know the Isle of Man, but I know the Channel Islanders quite well and know that they are very sensitive about the idea of foreign policemen on their soil, not least because of their terrible wartime experiences.

They are also very sensitive about French muscle-flexing: I am not really talking about radioactive emissions from the Cap de la Hague. French fishermen are constantly encroaching on the territorial waters of Guernsey and Jersey. Not so long ago, French fishermen laid claim to an uninhabited island and planted a tricolour there. So the idea of gun-toting flics landing on the islands is too much for those people to bear. I am certainly unhappy with the amendment as drafted, because it does not even mention consultation with the governments of the territories concerned. I should prefer the provision not to exist at all, but we shall hear what the Government have to say about it.

6 p.m.

Lord Bassam of Brighton

I am grateful that the noble Lord, Lord Wallace of Saltaire, has raised the issue, because it allows us to clarify it. For that reason, this is a useful exchange.

It is also worth saying that we share the noble Lord's concern about how offshore financial centres, as they prefer to be known, can become havens for money laundering, and so on, to the benefit of terrorist organisations, in particular. We share that real concern, which underpins the Government's position.

The enabling provision that the noble Lord seeks to insert into the Bill is, as he said, a standard provision, but we can insert it into legislation only after detailed and careful consultation and—this is the important point—the consent of the Channel Islands and the Isle of Man. We cannot do that unilaterally, as would the amendment.

Unlike purely domestic legislation, it is not appropriate to include the standard extension wording where the Bill enacts our European Union obligations. Unlike standard Community business where territorial extent is defined by the treaty, third pillar co-operation, which is implemented by this Bill, has no specific territorial application.

I was interested in what the noble Lord, Lord Monson, said about Gibraltar because the inclusion of Gibraltar and the islands in an instrument is considered with our European partners at the time it is negotiated, and their inclusion can be specified in the instrument where this is agreed. As the islands have chosen not to participate in the measures covered by the Bill, we cannot use the Bill to change that position.

There have not been any consultations on extending the Bill to the islands as they customarily enact their own legislation in the area of criminal justice—for example, in the Criminal Justice Act 1991 (of Tynwald), the Criminal Justice (International Co-operation) (Bailiwick of Guernsey) Law 2001 and the Criminal Justice (International Co-operation)(Jersey) Law 2001.

A copy of this Bill will be sent to the islands' authorities once it receives Royal Assent and becomes an Act. Then it will be a matter for the islands' discretion as to whether they wish to introduce any similar provisions into their own legislation. For those reasons, the Government cannot accept the amendment.

We have to respect the fact that the islands are Crown dependencies. The United Kingdom is responsible for the exercise of some functions, particularly in regard to external relations, but whether or not the islands opt into EU agreements is at their discretion; it is their constitutional right. Although the council's decision on the United Kingdom's participation in Schengen provides in Article 5.1 for a mechanism for the extension of Schengen to the islands—indeed, some of the islands were interested in parts of Schengen co-operation—they chose not to participate on the same terms as the United Kingdom, which was the only basis on which other member states would find participation acceptable because of the confusion which would otherwise arise as to the scope of the extension of Schengen to the United Kingdom. It remains open to us to activate the mechanism in Article 5.1 should the islands wish to do so.

In the case of MLAC and the protocol, the islands need first to join the 1959 Council of Europe Convention on Mutual Assistance. They have passed the necessary legislation and any subsequent decision on whether to apply further agreements is a matter for the islands. The islands have not chosen thus far to participate in, for example, the Convention on Driving Disqualification. Again, that is a matter for their discretion.

The noble Lord, Lord Wallace, made reference to the initiatives that the Government have taken in regard to the Channel Islands and the Isle of Man. We have been in power since 1997 and we consider that there have been considerable improvements in the way in which the Channel Islands have conducted themselves, particularly in regard to money laundering. In general, their anti-money laundering legislation very much shadows our own. They are obviously keen to remain not only compliant with international standards—because that guarantees their business—but wish to see best practice adopted by bodies operating from the Channel Islands and the Isle of Man. Their existing money laundering legislation, which corresponds to our primary law, mirrors our legislation as it stood prior to the Proceeds of Crime Act receiving Royal Assent.

The noble Lord referred to the Edwards report. That was produced in 1998 during the time at the Home Office of my noble and learned friend Lord Williams of Mostyn. It has been very effective. The bilateral discussions which have taken place at a ministerial level since then have reinforced that effectiveness and much progress has been made as a consequence.

The report praised the systems that had been put in place. The islands now have their own financial services authorities which regularly report to and work closely with law enforcement agencies here. There is a good exchange of information exercised through and with our own financial services. They co-operate freely and frequently with law enforcement agencies here to counter money laundering and other negative aspects of the way in which financial institutions work.

We can be very pleased with what we have achieved so far. We have done so mainly through negotiation, which is the best way in which such matters should be conducted. When I was the Minister in the Home Office responsible for the Channel Islands, I found that they were more than keen to co-operate. They saw it as a guarantee of success in the future, and their economies are heavily dependent on financial services for that success.

I hope that that rather lengthy response provides the noble Lord with the assurances he requires. We need to be ever mindful of the problems that we and the islands need to confront, but we do not consider the amendment to be a route towards strengthening the current position.

Lord Monson

Perhaps I may enlarge upon what the Minister said. The Channel Islands' money laundering legislation is stricter than ours at present. For instance, you have to produce a passport before you can open a bank account, which is not the case in this country. Their legislation is even better than the noble Lord, Lord Bassam, suggested.

Lord Renton

I have held responsibilities for the Channel Islands and the Isle of Man, as have the two noble Lords. It is clearly within my recollection that the Isle of Man never suffered throughout World War One and World War Two; we had no difficulty in defending it from German intrusion. But the Channel Islands have always been very vulnerable to foreign intrusion of one kind or another. I am not thinking merely of defence against aggression, but, as has been mentioned, various forms of financial intrusion can be easily made. In the context of the Bill and what it attempts to achieve, I hope that the Government will remain alert to the vulnerability of the Channel Islands.

I do not suggest that we should press for the amendment, but I am glad that it has been brought forward. I hope that the various powers to step in on behalf of the Crown, which have always existed, will be maintained and never overlooked.

Lord Wallace of Saltaire

While I am sympathetic to the experience of the Channel Islands during the Second World War, it should be remembered that in the 1950s and the 1960s they had economies based on potatoes, tomatoes and tourism. Since the 1970s, and increasingly in the past 15 years, they have developed extraordinarily successful financial services institutions and are now among the biggest off-shore financial centres in the world.

That development has transformed the social mix and nature of the Channel Islands and their position in European finance and European life. I find it rather puzzling that the relationship between the British Crown and the Channel Islands is still governed by the agreement of 1204. External relations have changed somewhat in the intervening 800 years and, as EU legislation and the characteristics of financial markets increasingly become integrated, a number of questions need to be raised.

The Channel Islands now have a very privileged position. They are able to choose which aspects of international legislation they opt into and which aspects they opt out of. I understand that they are not part of the United Kingdom, but it is the Home Office and not the Foreign Office which handles their affairs.

Lord Bassam of Brighton

That responsibility was transferred to the Lord Chancellor's Department.

Lord Wallace of Saltaire

I apologise. I should have remembered that it is now the responsibility of the Lord Chancellor's Department.

The advice that Her Majesty's Government give to the Crown on how to handle the Crown dependencies is up to them. It will be based on negotiations, but not necessarily negotiations between equals.

I am surprised that there have not been any consultations on the extent of the Bill. As Schengen moves further forward, the whole question of how far the Crown dependencies—particularly the Channel Islands—should be included within its broad scope is a matter to which we shall need to return. We should like to consult further. We shall withdraw the amendment at this stage but we may wish to return to it on Report as a result of further conversations we may have between now and then. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 93 agreed to.

Clause 94 agreed to.

Bill reported with amendments.

The Committee adjourned at eleven minutes past six o'clock.