Victims of Overseas Terrorism Bill [HL]

My Lords, the noble Lord, Lord Brennan, has made a powerful case for the victims of overseas terrorism. I do not think that anyone can fail to be moved by the plight of the victims of incidents such as those at Sharm el-Sheikh or Bali. The Bill allows us to debate the nature of the relationship between citizens and the state in today’s world and, more specifically, what citizens can expect from their state. It is clear that citizens can expect the state to protect them from physical harm within its own boundaries, whether from hostile incursion or, in today’s world, from terrorist attacks from within. However, I do not believe it has been established as a general principle in our country that there is an absolute right for citizens to be protected from economic harm caused by those who attack our nation. In practice, the Government have provided compensation to victims of violent crime, including terrorist acts committed in our country, through the Criminal Injuries Compensation Authority. The Bill forces us to confront the question of how far the state—or, more accurately, taxpayers—must seek to protect its citizens from economic harm if they choose to travel beyond our boundaries. Overseas travel is now affordable by many in our society; indeed, it is available on a scale which would have been unthinkable less than a generation ago. The question we have to ask is whether it is reasonable that those who travel overseas should impose a financial burden on those who do not wish to travel or perhaps do not have the resources to travel. We do not find this easy, and I do not think that there has yet been a proper debate on this whole issue. The Bill gives us an opportunity today to start that debate, and we are grateful for that, but it also raises complex issues. There should also be a debate on whether there should be an obligation on those who travel abroad to carry proper insurance. My noble friend Lord Sheikh, who has much insurance expertise, thought that that would be difficult to achieve, and I am sure thatthat is the case. The British Insurance Brokers’ Association, to which other noble Lords have referred today, noted that 15 per cent of policies have no terrorism exclusion and a further 29 per cent cover medical expenses and some other costs. So, it is clear that insurance is available. Of course, part of the problem is that large numbers of our citizens go abroad without any insurance cover at all, and others go with inadequate cover. Is it then reasonable for the state to assume the role of de facto insurer for those who choose, either knowingly or through ignorance, to travel uninsured or inadequately insured? I am not sure that Clause 3 is necessary, since cover is currently available. Does the noble Lord, Lord Brennan, know whether the insurance industry wants to enter into arrangements such as Pool Re, with the Treasury acting as reinsurer of last resort? The noble Lord said that the Treasury acted as reinsurer in those cases. In fact, Pool Re is the reinsurer, and it is a mutual arrangement for the insurance industry. The Treasury merely acts as the reinsurer of last resort. That enabled the insurance market to provide much needed and desired, though not obligatory, business cover in the wake of the attacks referred to. Is there a similar demand for terrorism cover within travel policies, which will of course have a cost, and which needs to be facilitated in this way? After all, if the arrangements for compensation in Clause 4 are brought into effect, why should anyone pay for insurance? They will see the state standing behind, ultimately, as the insurer. We are concerned about the scope of the Bill in Clause 1. The definition of ““overseas terrorism”” is wide. On my reading of the Bill, it would cover businessmen or contractors who were working in, say, Iraq and were caught up in the attacks that happen there all too frequently. It seems that, as Clause 1 is drafted, they would be within the Bill’s scope, but should they be? Those who choose to go to Iraq know the risks that they run, and, as we heard earlier, specialist insurance is available for that. The Bill will also give favoured treatment to those who can show that terrorism, as defined, is the cause of what has happened to them. But is there a logical distinction between someone injured as the result of a terrorist attack and someone who is injured, for example, as a consequence of a hit-and-run accident or of some other kind of violent crime while on holiday abroad? We understand and sympathise with the starting date of 1 January 2002 although, as a general principle, we do not like retrospection. The plain fact is that terrorism did not start on that date. Since the insurance arrangements by definition cannot have retrospective effect, the Bill in effect creates a special class of victim qualifying for compensation on a retrospective basis. We are not sure if that is a proper legislative principle. The core of the Bill lies not in the advice and assistance in Clause 2, which may not need to be provided in statute at all. It is certainly not in Clause 3, because insurance will not in any event be compulsory under the Bill. The heart of the Bill is in the compensation arrangements, which are called an ““awards”” scheme but are plainly a compensation scheme. Here, the crucial issue is cost. The noble Lord, Lord Brennan, has referred to the cost of £3 million per annum, which seems modest. The criminal injuries compensation scheme currently costs around £200 million a year. While terrorist incidents to date may not be so numerous, the average cost of those incidents must be high. I find it difficult to see £3 million as the likely cost of such a scheme if it were introduced. We cannot go forward with the scheme unless there is a clear understanding of the costs that are to be imposed on the taxpayer. Last year the Government announced a donation of £1 million to a fund to be administered by the Red Cross to assist victims of overseas terrorism. Clearly that would not match the kind of payouts envisaged by the noble Lord, Lord Brennan, but it was something positive. I hope that the Minister will say something about that fund today. There remains the possibility of seeking compensation in the relevant overseas courts for loss or damage or under local compensation schemes. Perhaps the Minister will say something about the opportunities that exist for victims to seek compensation abroad, and whether the Government intend to support victims in that endeavour. We have tremendous sympathy with and compassion for the victims of terrorism, wherever it takes place. But we have to temper our sympathy and compassion with realism. In today’s global world, should we look to the state—and therefore its taxpayers—to keep its citizens free from economic harm without geographic or other limit? That is a question I cannot answer today, but I welcome the debate that the noble Lord’s Bill has allowed us to have.