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Lord Myners: My Lords, the noble Lord, Lord Oakeshott, brings great and relevant experience to this matter as well as youth. These are not nationalised industries; they are companies in which the Government are taking a shareholding. Those companies will be under the direction of their boards of directors. Those

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boards of directors will be responsible to all shareholders, including the Government. In some cases, we are taking steps with the boards of directors to strength the boards because it is clear that, in some respects, boards were among those who failed in their oversight of risk management and control of the institutions for which they were responsible. We are going to work with those boards to strengthen them. We will also ensure that UK Financial Investments Limited—the arm’s-length body that will have oversight of these investments on behalf of the country—will be appropriately staffed with a majority of independent directors under the chairmanship of Philip Hampton, who is one of our most extraordinary and successful businessmen.

Lord Tomlinson: My Lords, does my noble friend accept that his statement was widely accepted in the House, including his apology, but that the apparent discourtesy to the House pales into insignificance in comparison with the damage that has been done to this country by some of our banks and some of their directors and senior staff? Will he accept my congratulations on the measures that have been taken—albeit lately announced—to make sure that the public investment in our banking system is properly secured and defended?

Lord Myners: My Lords, I thank my noble friend for his comments. I will convey his appreciation and thanks back to those in the Treasury and elsewhere who played the leading role in the recapitalisation of our banks in a truly innovative way, which has been admired and copied throughout the world. I am but a small bit player in that, but I will ensure that those who worked diligently and extraordinary well over many days and weeks are appropriately reminded of the appreciation of this House.

Baroness O'Cathain: My Lords, in the absence of the noble Baroness, Lady Vadera, can the noble Lord explain her comments last evening? My noble friend Lord Forsyth asked at the end of the debate:

and so on. The noble Baroness, Lady Vadera, said:

Then she picked out two. I asked her three questions, but not one of them was answered. That was surely an opportunity for her to say what had developed at the other end of the building.

Lord Myners: My Lords, I thank the noble Baroness for her question. There were 47 speakers yesterday. In a winding-up speech, it was exceedingly difficult to capture every point and question raised. I remember well the final question of the noble Lord, Lord Forsyth. I believe that he was fixated with the issue of dividends and preference shares. We have addressed that issue in fully explaining, for the benefit of the noble Lord, Lord Forsyth—if of no one else—that preference shares can be refinanced, repaid and the banks will be

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able to pay dividends as soon as their tier 1 and core tier 1 capital is appropriate to meet their ongoing obligations to the Financial Services Authority.

Baroness O'Cathain: My Lords, I am sorry, but the noble Baroness, Lady Vadera, had plenty of time; it was not a timed debate and we actually finished before the recommended time. There was time; 47 speakers did not ask 47 questions. If you go through the text of Hansard, you will find that there were not that many questions.

Lord Myners: My Lords, if noble Lords go through Hansard, they will note that a number of Peers asked several questions, so it is not a simple matter of multiplication. My noble friend Lady Vadera made a full and complete explanation of the issues to the House. I stand here; if noble Lords have further questions, I stand here ready to answer them. Please ask your questions.

Lord Roberts of Conwy: My Lords, I accept the noble Lord's invitation and ask him to justify yet again why the Government are dealing so badly with ordinary shareholders in the recapitalised banks and insisting that the preference shares must be redeemed before any dividend is paid.

Lord Myners: My Lords, the Government have handled this with the interests of the shareholders to the forefront. In particular, we have insisted on a full right of clawback. There is no usurpation of shareholder rights. The shareholders of Lloyds TSB, HBOS and Royal Bank of Scotland can participate fully in the capital-raising of the ordinary shares. There is a full and unlimited clawback. That has been admired and appreciated by institutional investors, and it is our hope that many shareholders will so participate.

It is also a basic rule and principle—I look to the noble Lord, Lord James of Blackheath, as someone whose work in this area I have much admired—that preference shares stand in priority to ordinary shares. We have said that preference shares must be repaid or refinanced out of retained earnings, a new capital issue or disposal of the premium over book value, at which point ordinary share dividends will be payable. I can assure the noble Lord that that is absolutely standard practice in a refinancing.

Counter-Terrorism Bill

3.19 pm

Report received.

Clause 1 [Power to remove documents for examination]:

The Parliamentary Under-Secretary of State, Home Office (Lord West of Spithead) moved Amendment No. 1:

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The noble Lord said: My Lords, before I speak on the detail of Amendment No. 1, I draw noble Lords’ attention to the amendments which I tabled yesterday. These amendments deal with financial restrictions in relation to countries where money laundering, terrorist finance and the proliferation of weapons of mass destruction are a cause for concern. I apologise for tabling these amendments so late in the parliamentary process, but I hope that there will be ample time to debate and scrutinise them on day two of Report next Tuesday. My noble friend Lord Myners will deal with the detail of this issue in the Chamber next week. He has written to all Members who have taken part in the debate on the Bill so far, and he and his officials are happy to provide any further information that noble Lords may require in advance of that debate.

My approach to the Bill from the start has been to try to reach a compromise where possible on the various proposals. I have tried where possible to meet concerns expressed and to incorporate, where appropriate, all the excellent points made about the Bill, because it is important to deal with matters of national security consensually where at all possible. I have made compromises and adjustments where I could, and I am sure that as a result some of the provisions in the Bill will be in better shape when they leave the Chamber than when they came to it.

When I stand at the Dispatch Box, other Members of the House often ask me to remember that, although they might oppose something that the Government are doing, they have the welfare and safety of this nation just as much at heart as we do. I have always been very fulsome in my regard for that because I believe it to be true, but I also ask the House to remember that the Government are very interested in human rights and in looking after the freedom of individuals. That should also be acknowledged. We are not doing this to try to bear down on those things, and we do not take lightly some of the measures that we sometimes have to introduce. That is important to remember.

Amendment No. 1 is a small example of what we have done to compromise. During the debate on the provisions in Clauses 1 to 9 on the power to remove documents, a number of your Lordships expressed concern that Clause 1(4), although essential to the functioning of the power, could be drafted to be more readily understandable. At that point in the debate, I agreed to take the clause away and work with the parliamentary counsel to redraft the clause if at all possible.

Clause 1 is vital to the functioning of the power to remove documents, as it sets out the powers of seizure available to an officer after a document has been removed, examined and found to pass the threshold for seizure. Once a document is removed following the search of premises, the original seizure powers no longer apply because they exist only while the constable is actually on the premises. We therefore need a provision in the Bill to spell out that, where the reasonable belief test is met following examination of the document after it has been removed from the premises, a constable may indeed seize that document. That is what Clause 1(4) does.

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Should an officer exercise one of the search powers in Clause 1(1) and find a document which he is not sure reaches the threshold for seizure, the power in Clause 1 enables him to remove the document to the police station or another place so that it may be examined further. Once back at the police station, the document is examined further and the officer realises that it is of interest. That is when Clause 1(4) kicks in. Were we not to have such a provision, the officer would not be able to seize the document. Instead, as a result of Clause 1(4), the officer has the same powers of seizure as he would if the seizure threshold were crossed when he exercised the initial search power.

We have not changed the functioning of this clause from the one that appeared in Committee. Rather, following the concerns that noble Lords expressed during that debate, we have tried to redraft it to be much more understandable. I beg to move.

Baroness Hanham: My Lords, I thank the Minister for his explanation. As far as I can see, a pair of brackets has been inserted in the clause. It still is not brilliantly worded, but, no doubt, someone will understand it. If they do not, they will have to ask, because the Minister’s explanation is now on the record.

I also listened to his explanation on the proposed amendments to Clause 62 and onwards on money laundering. That will be handled by the noble Lord, Lord Kingsland, and I suspect that someone has written to him with an explanation of those clauses.

Baroness Miller of Chilthorne Domer: My Lords, we appreciate the Minister’s comments on his wish to work consensually. On 13 October, we felt that our role as opposition parties was treated very badly in the Home Secretary’s announcement. Throughout the conduct of this Bill through this place, the Minister has not given rise to any of those feelings and we are grateful for that. The fact that further concessions still are being made to make the Bill more reasonable and more workable is meaningful.

The Minister has referred to the large amendment to be introduced by the noble Lord, Lord Myners, and his department. We are already grateful that the Treasury has seen fit to concede that reports should be made to Parliament and has included that in its report following discussions with us. There may be further useful amendments, which we will discuss at the time. However, I have to put on record that it was pushing procedure to the limits to introduce something so large at such a late date. It is lucky that it will be debated next week and not this week.

Lord Thomas of Gresford: My Lords, perhaps I may add to what my noble friend has said on the Minister’s preamble. I give notice that we are particularly concerned at the rather extraordinary extension of jurisdiction in paragraphs 32 and 34 of the proposed new schedule, and the extraordinary time limits to be imposed under paragraph 35. I say that because the Minister did not indicate that anyone with a legal background would deal with this when it comes before us next week.

Lord Mackay of Clashfern: My Lords, I should like to express my appreciation for this amendment. It is a considerable improvement. Certainly, it does not in

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any sense alter the underlying idea behind the clause as it was originally drafted. Clarity of this kind is always to be appreciated.

Lord West of Spithead: My Lords, I thank the noble and learned Lord for his input. In response to the noble Baroness, Lady Hanham, as I understand it a note will go to the noble Lord, Lord Kingsland, and to the noble Baroness. I will make sure that that will happen. A very large body of amendments came out yesterday, which we will leave for one week, as is required. They did not come out until yesterday because I wanted to be absolutely certain that there was no other way to do this. It seemed to be a rather bad way of doing things, but I believe that there is a requirement for this to be done and that there seems to be no other way to achieve it. It took some time to work that out—over a weekend—and to be absolutely certain, for which I apologise. It will be debated next week and I hope that all noble Lords will have a chance to look at it and see the detail.

The Earl of Onslow: My Lords, I thank the noble Lord for his first remarks, which were generous and in stark contrast to those of the noble Lord, Lord Myners, on the previous Question—perhaps that is a bit unfair. I do not know whether this is possible, but Amendment No. 61A goes on for pages. Normally with legislation of this length one would have a Second Reading, Committee and Report stages, and a Third Reading. Would it be possible to recommit this new clause either on the same day or possibly a day earlier so that it can be considered through all the stages? Technically I believe that one can recommit certain parts of a Bill, and that it has been done before. I do not know what others think about that suggestion, but this is a very long addition to the Bill.

Lord West of Spithead: My Lords, I do not think that I can say we would do that. We have now given more than seven days for the amendment to be looked at and there is an opportunity for considerable discussion. Moreover, my noble friend Lord Myners is available to discuss these issues with any noble Lord who wishes to talk them through, and he will write. I realise that this is not ideal, but, as I have said, it is an important point. I believe most noble Lords agree that it needs to be done; it is really a question of how it is done. I think, therefore, we need to move forward in this way. Again, I apologise for the lateness, but I wanted to be absolutely certain that there was no other way of doing it, and that is why it has arrived like that.

On Question, amendment agreed to.

3.30 pm

Baroness Hanham moved Amendment No. 2:

(a) a procedure by which a person can request a statement of what information relating to fingerprints and samples is held on them or on a dependent;(b) a procedure by which a person can request that such information held on them or a dependent is destroyed

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(c) the circumstances in which a request under paragraph (b) may be refused.

The noble Baroness said: My Lords, we had an interesting debate in Committee on the retention of samples such as fingerprints and DNA. The Minister kindly followed that up with a comprehensive letter which included a fact-sheet compiled for the police on the retention and use of such samples. As I indicated in Committee, I was not particularly reassured by the Minister’s answers, and therefore I return today with the second of the two amendments I tabled at that stage. The aim of this amendment is to try to spark a national debate about the retention of samples and to inform the public about what information is being held on them.

This amendment would require the Secretary of State to draft and lay before Parliament regulations governing the procedures by which people can discover what information is held about them and under what circumstances a request can be made by them to have samples taken during an investigation by the police destroyed. As we will see, there is no transparency in the current situation and the dice are severely loaded against innocent people being able to ensure that their most personal details are not kept indefinitely following their exclusion, either by a court or following a decision that there is no reason for them to be involved further in any inquiry. No one disputes the value of DNA and fingerprint information in identifying criminals and possibly terrorists, and that it has and will continue to make a useful contribution in pursuit of identifying and bringing to justice perpetrators of crime and terrorism. However, there is wide concern about the retention by the police of information on samples taken from a wide range of people during their inquiries which is then retained indefinitely on the police national computer. The provisions in this Bill add to those already in PACE 1984 and, as we now know, this legislation can be used to justify action over a wider range than counterterrorism purposes.

Few innocent people will resent helping the police by giving samples whether they are innocent at the time or subsequently found to be, but they question, as we do, the justification for their personal identification material being held and for it to be difficult to find out how they can have it removed from the police national computer. There is an additional factor in that such information can now be transferred to other EU countries. The general assumption in those countries is that anyone whose details are held on the database is guilty or at least suspected of being associated with crime. Transparency is needed.

The Minister was kind enough to identify where the current guidelines on the retention of DNA are set out, but their title, “Retention guidelines for nominal

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records on the police national computer”, has clearly not been chosen with transparency in mind. However titled, they certainly did not pop up in a sample search of the internet; rather, they appeared on the website of the Association of Chief Police Officers and are, apparently, only for the guidance of the police. Members of the public would find it extraordinarily hard to make any headway through this maze.

The guidelines are deeply worrying and make clear just how high a barrier the Government have imposed on DNA and fingerprint information ever being destroyed. The initial response to a request for destruction is an automatic refusal. The guidelines state:

But the chief police officer is then recommended to check with the DNA and Fingerprint Retention Project if the applicant persists.

Appendix 2 makes it clear that, while the chief police officers have the discretion to authorise deletion of any specific data, it is,

It then goes on to say:

Indeed they will be rare, for the case study given of when DNA information might be suitable for destruction is almost laughable. It is that if the police arrest every occupant of a building for murder following the discovery of a dead body and forcibly take DNA samples, but then discover that the dead body in fact died of natural causes and that no crime has been committed. That is then considered sufficiently a case where, possibly, DNA samples—taken from entirely innocent people—might be destroyed. The number of similar cases will not be enormous.

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