New Clause 8 - Disclosure orders

National Security Bill – in a Public Bill Committee at 9:25 am on 18th October 2022.

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

This new clause introduces the new Schedule inserted by NS1.

Brought up, and read the First time.

Photo of Thomas Tugendhat Thomas Tugendhat Minister of State (Home Office) (Security)

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

Photo of James Gray James Gray Conservative, North Wiltshire

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

Photo of Thomas Tugendhat Thomas Tugendhat Minister of State (Home Office) (Security)

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

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

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

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

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

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

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

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

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

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

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

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

Photo of Holly Lynch Holly Lynch Shadow Minister (Home Office)

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

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

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

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

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

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

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

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

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

By comparison, paragraph 17(1) states that a

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

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

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

Photo of Stuart McDonald Stuart McDonald Shadow SNP Spokesperson (Home Affairs)

It is a pleasure to serve under your chairmanship, Mr Gray. My apologies for missing the previous Committee sitting. I can now welcome the Minister to his place at this very interesting and challenging time. I do not doubt that we wish him well. We have a tricky job in Committee today. We are looking at fairly substantial new schedules and new clauses for the first time. It would be helpful to hear what the Minister has to say about them. On the whole, we are supportive of most of what we will be discussing today, but we will have to take away what the Minister says and consider it further. Ultimately, we reserve our position until the Bill reaches its final stages in the House of Commons.

The Minister has outlined a number of case studies and scenarios to illustrate how this new clause and new schedule would work. More of that information would be really helpful to understand what the Government are getting at. With that proviso in mind, we would say that new schedule 1 seems to provide the necessary powers to investigate foreign threat activity. The Minister referenced the fact that this was based on other provisions, which is interesting to know, but I two have two or three questions about precisely what statute and provisions these measures are modelled on. Some of them seem fairly unusual, so it would be useful to know where else they can be found in order to analyse how they work there.

The Minister provided some examples of how the new clause and schedule would work. The first question is how is it to be decided that property is

“likely to be used for the purposes of foreign power threat activity” or proceeds of that? Is that essential analysis to be based on the nature of the property, or is more required, such as intelligence about who may have had ownership or possession or some other link to it? Again, the illustrations which the Minister gave during his introductory speech may answer that question. I will have to go away and have a think about that, but the more illustrations we can have, the better. Otherwise, his scheme seems pretty reasonable.

I have a couple of questions about some of the supplementary provisions. Is there not an issue with being able to ask questions that could lead to self-incriminating answers? I think the shadow Minister almost had the opposite concern from me. She asked why that would be protected from use in a criminal trial. My question is about whether the safeguard goes far enough. The Government are basically saying that someone can be asked a question that may lead to a self-incriminating answer. There are protections elsewhere in paragraphs 8 and 17 of the new schedule about the non-use of those statements, but is this formulation used in other legislation? It would be useful to have a specific reference to a provision in another Act of Parliament.

In a similar vein, what is the thinking around ensuring that disclosure orders have effect, despite restrictions in another enactment? That seems a very broad provision. Again, is that found elsewhere in another piece of legislation? What other Acts of Parliament are going to be impacted or undermined by this? Finally, part 2 includes the provisions in relation to Scotland and how these would be put into practice. I wanted to check that there has been consultation with the Scottish Government. The broad thrust of new schedule 1 seems fine, but there are one or two questions for the Minister.

Photo of Maria Eagle Maria Eagle Labour, Garston and Halewood 9:45 am, 18th October 2022

I have a minor point to raise with the Minister in respect of part of the supplementary provision in new schedule 2, which the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East has referred to, about disclosure orders—

Photo of James Gray James Gray Conservative, North Wiltshire

Order. I am sorry to interrupt you, but we are discussing new schedule 1 rather than new schedule 2.

Photo of Maria Eagle Maria Eagle Labour, Garston and Halewood

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

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

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

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

Photo of Thomas Tugendhat Thomas Tugendhat Minister of State (Home Office) (Security)

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

Photo of Thomas Tugendhat Thomas Tugendhat Minister of State (Home Office) (Security)

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

Photo of Kevan Jones Kevan Jones Labour, North Durham

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

Photo of Thomas Tugendhat Thomas Tugendhat Minister of State (Home Office) (Security)

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

Photo of Kevan Jones Kevan Jones Labour, North Durham

And stop making things up.

Photo of Thomas Tugendhat Thomas Tugendhat Minister of State (Home Office) (Security)

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

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

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

Question put and agreed to.

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