Lords Sitting of 16 March 1998

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Ely.
The Earl of Dartmouth The Earl of Dartmouth—Sat first in Parliament after the death of his father.

Party Political Fundraising
Lord Harris of Greenwich Lord Harris of Greenwich asked Her Majesty's Government:
What action has been taken following the letter on party political fundraising from the Secretary of State for the Home Department, referred to by Lord Williams of Mostyn on 12th February (HL Deb, cols. 1258–9).
The Parliamentary Under-Secretary of State, Home Office (Lord Williams of Mostyn): My Lords, my right honourable friend has now received a reply from the Deputy Chairman of the Conservative Party. This said that any donation which was shown to have come from illegal sources or otherwise breached the rules of the Conservative Party would be returned. There was no comment on my right honourable friend's suggestion that a donation, said to be of £1 million, to the Conservative Party from Mr. C. K. Ma should be donated to anti-drug charities, nor indeed on any other specific question put by my right honourable friend.
Lord Harris of Greenwich: My Lords, I thank the noble Lord for that reply. Does he accept that the one thing about which we all probably agree is the threat posed to the lives of many thousands of young people in this country as a result of trafficking in cocaine and heroin? That being so, does the noble Lord agree that it is quite an extraordinary situation that a British political party should accept a donation of £1 million from a family deeply involved in the drugs business in South East Asia?
Lord Williams of Mostyn: My Lords, the questions to which specific replies came there none included the following: "Why did Mr. Ma give the money to the Tory Party? Was he promised that in return for his donation, charges against Ma for drug trafficking would be dropped? Is he now saying he wants his money back because explicit expectations associated with the gift have not been made? Were you or your party aware of the Ma family's alleged links with drug trafficking?" It was in response to those questions that the answer came from the Deputy Chairman of the Conservative Party:
"I am afraid I can give you no further help with your questions".
Lord Harris of Greenwich: My Lords, given the lack of interest from the Opposition Front Bench in this
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Question, does the noble Lord agree that the most satisfactory outcome of this problem would be if this £1 million were donated to a charity which has the responsibility of looking after the interests of those young people whose lives have been seriously damaged as a result of the drugs business in this country?
Lord Williams of Mostyn: My Lords, that was the suggestion made by the Home Secretary as long ago as 21st January of this year. Indeed, I can say to your Lordships that the Home Secretary and I have been all agog waiting for the reply. But then it got into the category of Billy Bunter's postal order, or possibly the dog had eaten it.
Baroness Blatch: My Lords, I wonder whether the noble Lord, Lord Harris of Greenwich, who has asked the Question, will be very specific in the allegations he has made about particular people who cannot answer for themselves in this place. My party has agreed to co-operate fully with the committee which will ask all these questions and my party will address them fully in its answers. Therefore, will the Minister answer the questions which have been asked many times in this place about the details of the blind trusts—
Noble Lords: Oh!
Baroness Blatch: My Lords, what is sauce for the goose is sauce for the gander. Blind trusts have been held and closed without anything publicly being declared about the detail, and blind trusts are still running.
Lord Williams of Mostyn: My Lords, I wonder whether I am alone in seeing a qualitative moral difference between blind trusts, which are available as a matter of public record, and a simple question which was put by the Home Secretary, echoed on a number of occasions by the noble Lord, Lord Harris of Greenwich, as to whether it is appropriate to take £1 million from a family, the father of which presently resides in Taiwan—there is no extradition between Taiwan and Hong Kong—and whose nickname apparently is "White Powder Ma".
Lord Razzall: My Lords, does the Minister agree that it is quite extraordinary to listen to the words from the noble Baroness on the Opposition Front Bench regarding blind trusts when our understanding is that the evidence that the Conservative Party has put to the noble and learned Lord, Lord Neill, with regard to the proposals for alterations to the law and procedures on political fundraising contains a suggestion from the Tory Party that, contrary to what it has said in the past, it should be permitted for donations to be given anonymously to a body that will be set up by the noble and learned Lord, Lord Neill, and his committee, and that body will then pass on those donations to the party of choice of the donor? Does the Minister agree that that is somewhat inconsistent with the rather pejorative comments made by the noble Baroness regarding blind trusts?
Lord Williams of Mostyn: My Lords, the noble Lord may well have a point there. I looked up the representations made by the Conservative Party. Perhaps it will be helpful if I read them out as sometimes these things are overlooked. "Blind trusts" is the rubric, and this is the Conservative Party's proposition:
"We believe there is an argument in favour of a form of blind trust that should be examined by the committee".
Viscount Davidson: My Lords, is the noble Lord aware that my father knew Lloyd George?
Lord Williams of Mostyn: My Lords, I am sure that is right because it is a matter of public record.
Lord Newby: My Lords, does the Minister agree that the only sensible and easy way to deal with these kinds of questions is simply to have a law requiring people giving substantial amounts of money to political parties to declare it openly?
Lord Williams of Mostyn: My Lords, I believe that the sensible, proper and appropriate way is to wait until the noble and learned Lord, Lord Neill, brings forth his recommendations so that we can discuss them in a spirit of amity in your Lordships' House.
Lord Campbell of Alloway: My Lords, does the noble Lord know who it was who asked the questions of the Conservative Party—which I support?
Lord Williams of Mostyn: My Lords, the questions were put to the present leader of the Conservative Party by my right honourable friend the Secretary of State for the Home Department, as I indicated when I answered a Question a few weeks ago. The reply did not come from Mr. Hague.

Prisons: Educational Provision
2.44 p.m.
Lord Quirk Lord Quirk asked Her Majesty's Government:
What plans they have to enhance the provision of education and training for inmates of HM prisons and young offender institutions.
Lord Williams of Mostyn: My Lords, the Prison Service has a number of initiatives for enhancing education and training in prisons and young offender institutions. They include piloting welfare-to-work programmes; incorporating "key skills" into the curriculum; a model curriculum for juveniles; a nationally-accredited preparation-for-work course; delivering basic skills training; developing family literacy projects and literacy mentoring; and screening for dyslexia.
Lord Quirk: My Lords, I am grateful to the Minister for that encouraging reply. Is it not the case that, although the 65,000 inmates of Her Majesty's institutions are but a very small fraction of our population, they are a seriously skewed fraction, being
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not only disproportionately prone to creating fear and misery, but disproportionately young, disproportionately male, disproportionately from unhappy homes and—to my point—disproportionately ill-educated? Should we not be making a special effort to remedy at least that last deficit, given that in apparently more optimistic times the institutions concerned were known as "houses of correction"? Can there be any possible justification for the priority shown in the most recent annual report of the Prison Service for 1995–96 that, of the £25,000 per annum cost per inmate, in that year only 2 per cent. was devoted to education and training? A fortiori, how can we justify perversely reducing the amount allotted to education and training over the past two years, given that in those two years the prison population has vastly increased?
Lord Williams of Mostyn: My Lords, I believe that the noble Lord has a point about the disproportionate numbers in the categories that he identified. The prison spend on education in 1996–97 was £34,481,000. In 1997–98 it is estimated at £36 million, so there will be that degree of increase. We are concerned to echo the noble Lord's comments. Welfare-to-work is very important and I entirely agree with what the noble Lord proposes. We now have 11 pilot schemes in different establishments. As regards preparation for work and work skills, initial evaluations will take place after six months and a full evaluation after one year. The trial itself is being taken seriously and £1.5 million is being devoted to it.
Baroness Sharpies: My Lords, can the noble Lord say how many prisons have writers in residence?
Lord Williams of Mostyn: My Lords, I cannot.
Lord Ackner: My Lords, does the Minister accept that, so long as the present gross overcrowding of prisons continues and so long as the severe budget cuts continue, there is no real prospect, to quote the words of the Question, of enhancing,
"the provision of education and training"?
Lord Williams of Mostyn: My Lords, gross overcrowding is of course a very serious problem. The present figure for inmates as at 16th March is 64,956. We have to manage, to an extent, what we have inherited. But I stress that many positive initiatives are going ahead. We cannot simply throw up our hands in horror. It is very important that the prison department regards rehabilitation and education for a return to a decent life extremely seriously.
The Lord Bishop of Ely: My Lords, can the Minister confirm that these initiatives amount to a quiet and sustained revolution in aspiration and achievement laid out in the most welcome Green Paper, The Learning Age?
Lord Williams of Mostyn: My Lords, I hope so. Things are improving. There are now 48 different NVQs offered in prison; there were 24 in 1992; and

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17,309 individual NVQ units were awarded to prisoners last year, which is 25 per cent. up on the year before. Over 1,800 prisoners achieved full NVQs last year—50 per cent. over the previous year and three times the number of the year before that. There is at least a gleam of hope within what is otherwise sometimes regarded as a gloomy picture.
Lord Dholakia: My Lords, will the Minister confirm that the figures for 1995–96 and 1996–97 show a cut in the amount of time spent in prison education in at least 71 per cent. of prison establishments? Does he accept that those figures are supplemented by the fact that in 1995 each prisoner spent an average of 1.8 hours in prison education whereas in 1997 that had dropped to 1.5 hours? Will the Minister explain what will be done to remedy that situation?
Lord Williams of Mostyn: My Lords, we look not only at the education component, but at purposeful activity generally, which includes work; education and training; supervised PE and sport; evening education; religious activity; social, domestic and family visits; prison induction courses, and resettlement and rehabilitation activities, not all of which come within the component normally thought of as "education". The key performance indicator is that each prisoner should spend at least 22.5 hours per week in purposeful activity. In fact, to the end of January this year, that was exceeded and the figure was 23.2 hours.
Lord Acton: My Lords—
Baroness Oppenheim-Barnes: My Lords—
Earl Russell: My Lords—
Noble Lords: Order!
The Lord Privy Seal (Lord Richard): My Lords, we are doing quite well for time at the moment. I think that perhaps it is time for our side to ask one question, then the noble Baroness, and then, no doubt, the noble Earl.
Lord Acton: My Lords, is my noble friend aware that in his report on women in prisons in May last year the Chief Inspector of Prisons recommended at paragraph 12.126 that there should be greater co-ordination and co-operation on educational matters by prisons holding women? Has that been set in motion?
Lord Williams of Mostyn: My Lords, I was aware of that recommendation. That is one reason why an assistant director has been appointed to deal with the sort of issues to which my noble friend has referred which relate particularly to the problems that some women suffer in our prison regime.
Baroness Oppenheim-Barnes: My Lords, this appears to be a popular topic this afternoon. Is the Minister aware that for at least the past 30 years, if not longer, there has been a Dowty workshop in Gloucester
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Prison—Dowty being local industrialists—which trains for skills and then undertakes to employ those qualifying when they leave prison? I have always thought that a wonderful example and I wonder why such an example has not been followed more widely by prisons in partnership with local industry.
Lord Williams of Mostyn: My Lords, the noble Baroness is right that such schemes have the great virtue of being focused, with the result that we are not training people for opportunities which may not exist, thus not affording them the opportunity to lead a fruitful life. Of course, such schemes depend on the flexibility of the local prison governor and on the generosity of local employers, such as that to which the noble Baroness referred.
Earl Russell: My Lords, is the Minister aware that his answers have demonstrated that the penal policy of Her Majesty's Government and their budgetary policy are incompatible? Which one are they going to change?
Lord Williams of Mostyn: My Lords, they are not incompatible. There are constraints on public spending, but that does not limit the power of reflective imagination to spend the available money in the most appropriate way.

Gulf War Illnesses: Research Funding
2.54 p.m.
The Countess of Mar The Countess of Mar asked Her Majesty's Government:
What funds have been allocated to which research institutions for clinical research into Gulf war illnesses by the Gulf War Illness Panel of the Medical Research Council.
The Minister of State, Ministry of Defence (Lord Gilbert): My Lords, none of the Medical Research Council's own funds has been allocated by it for research into Gulf veterans' illnesses. However, in line with the council's recommendations, the MoD is funding two epidemiological studies to investigate the health of Gulf veterans and their families. In addition, I am pleased to announce that the MoD intends shortly to place with King's College, London a contract for a programme of neurophysiological tests on randomly selected Gulf veterans who have been identified through the US-funded epidemiological study which is being carried out under Professor Wessely. This decision has been taken in consultation with the Government's Chief Scientific Adviser and the Medical Research Council.
The Countess of Mar: My Lords, I thank the noble Lord for that Answer. However, is he aware that epidemiological studies are not clinical studies? If the King's College study is to be the only such study, I must advise him that other aspects of the Gulf veterans' illnesses need to be looked into. Is the Minister aware that the chairman of the Gulf War Illness Panel of the Medical Research Council is also the head of

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academic medicine at King's College Hospital; that the research which the noble Lord has just mentioned was never put out to tender or advertised; and that there was no competition? Is he also aware that, when the original advertisements relating to Gulf war illness research were put out nearly two years ago, anyone who had put in a protocol for clinical research was rejected without any reason being given by the Medical Research Council? Can the Minister say when those people will be told why their applications were rejected and why the current research has not been put out to tender?
Lord Gilbert: My Lords, the noble Countess has asked me a great many questions and I shall do my best to answer. Yes, I am aware that there is a difference between clinical research and epidemiological research. We do not rule out the possibility of further clinical tests being carried out on other groups in due course. As to the process by which the contract was awarded, I shall be happy to look into the points raised by the noble Countess.
Lord Burnham: My Lords, this is an immensely complicated pie, if that is not too mixed a metaphor, and many people have fingers in it. Have the Government appointed an individual to co-ordinate all the work and, if not, will they do so?
Lord Gilbert: My Lords, the work is being co-ordinated under the authority of my honourable friend the Minister of State for the Armed Forces.
Lord Monkswell: My Lords, the House will be aware that a very large amount of money is being spent by the Americans on researching Gulf war syndrome. Can the Minister advise the House whether any of that research will take into account the experiences of the British and the French armed forces in the theatre of the Iraq conflict?
Lord Gilbert: My Lords, my noble friend is absolutely right. The United States is in a position to devote far more resources to this subject than we are. I can assure my noble friend that there is a full and continuing exchange between our two governments on the results that we come up with. Unfortunately, so far the United States is no nearer a solution than we are. I am not aware of any significant research being carried out on this subject in France.

Gulf Forces: EU Support
2.57 p.m.
Lord Hardy of Wath Lord Hardy of Wath asked Her Majesty's Government:
Whether other European Union member states have been requested to participate in the military force deployed in the Gulf area in order to maintain the pressure required to secure Iraq's continued compliance with the United Nations agreement.
The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Baroness Symons of Vernham Dean): My Lords, during the recent crisis we did not request military participation from EU partners. The majority of EU states supported the UK position. In addition, some either contributed directly to the military presence in the Gulf or offered logistical support. The details are as follows: Belgium agreed to send a frigate; the Netherlands agreed to send a frigate; Denmark agreed to send one C130 Hercules transport aircraft; Germany agreed to make air bases available; Portugal agreed to the use of available air bases and Spain agreed to make air bases available. In addition, Finland, Italy, Austria and Sweden acknowledged that military action would be necessary if diplomacy failed.
Lord Hardy of Wath: My Lords, I thank my noble friend for that Answer, which is a little disappointing since our partner states would share in the rejoicing if the effort so far proceeding resulted in the removal or destruction of Iraq's quite horrid weaponry. Is it not the case, however, that those countries which are not making particularly significant contributions are among those most fervently calling for the establishment of a European defence pillar, and that one cannot be sure that they would contribute very much towards it?
Baroness Symons of Vernham Dean: My Lords, my noble friend says that he finds the Answer a little disappointing. In view of the fact that so many at the time claimed that the United Kingdom and the United States were isolated in their stance on Iraq, I disagree with my noble friend's assessment. Noble Lords may be interested to learn that in addition a number of other countries either offered direct contributions to the military presence in the Gulf or made available logistic support. Those countries included Australia, Canada, Poland, Norway, Romania, New Zealand and Argentina. I believe that the alliance that was established was quite wide ranging.
Lord Wallace of Saltaire: My Lords, can the Minister assure the House that the Government consulted their European Union partners as fully as possible in the run-up to the Iraq crisis? The United Kingdom has the presidency of the Union. It appeared a little odd that we did not convene a special meeting to discuss this question, given that the Treaty of Amsterdam contains a special clause which provides that permanent members of the Security Council shall inform and consult EU partners. How much was done?
Baroness Symons of Vernham Dean: My Lords, that question has been raised in your Lordships' House in the past. I reiterate that Iraq was discussed regularly at all levels in the EU. During February alone the Iraqi crisis was discussed at five different high-level EU meetings, including twice by EU Foreign Ministers. The crisis arose due to Iraq's non-compliance with the UN's Security Council resolutions, and therefore it was logical that the UN should take the lead in the crisis. The noble Lord may like to know, however, that the WEU

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contributed to the international action in the build-up to the Gulf War by co-ordinating the European naval contribution to the blockade of Iraq.
Lord Burnham: My Lords, I note that the countries cited by the noble Baroness in her first Answer were all western European. In her second answer the countries to which she referred were also "white", if that is not an improper term, and included countries in eastern Europe. What approaches were made to Middle Eastern and Arab states and what was their response?
Baroness Symons of Vernham Dean: My Lords, I thank the noble Lord for his question. I felt that my previous answers were becoming too long and perhaps testing your Lordships' patience. However, as the noble Lord asks the question, the countries were Bahrain, Oman, Kuwait and Qatar as well as the Czech Republic and Hungary, who also offered practical support during the recent crisis.
Lord Avebury: My Lords, what help has the European Union been asked to give in resuscitating the Iraqi National Congress which, after all, affords a much better long-term prospect for changing the system of government in Iraq and replacing Saddam with a democratic system? Is it right that the Americans have given 38 million dollars to the promotion of a more vigorous policy by the INC, and how much will the Europeans give to supplement that?
Baroness Symons of Vernham Dean: My Lords, as I understand the noble Lord, he asks about the establishment of an effective opposition within Iraq. We support and encourage, as do our European Union colleagues, the formation of a united representative opposition to Saddam's regime.
Lord Ewing of Kirkford: My Lords, now that the crisis is over, as one of my noble friend's Back Benchers who gave her some awkward moments, at the great risk of damaging her career, perhaps I may place on record my deep and sincere appreciation of the way in which she has mastered this very, very difficult brief. I shall be in the Bishops' Bar in half an hour's time.

Business
3.3 p.m.
Lord Carter: My Lords, at a convenient moment after 3.30 p.m. my noble friend Lady Farrington of Ribbleton will, with the leave of the House, repeat in the form of a Statement an answer to a Private Notice Question in another place on the situation in the Maze Prison.

Consolidated Fund (No. 2) Bill
Lord McIntosh of Haringey: My Lords, I beg to move that the Bill be now read a second time.
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Moved, That the Bill be now read a second time.— (Lord McIntosh of Haringey.)
On Question, Bill read a second time; Committee negatived.
Then, Standing Order No. 44 having been suspended (pursuant to Resolution of 11th March), Bill read a third time, and passed.

National Lottery Bill [H.L.]
3.5 p.m.
Read a third time.
Clause 5 [The new good cause and the re-allocation of lottery money]:
Lord Skidelsky Lord Skidelsky moved the amendment:
Page 8, line 12, leave out subsection (9).
The noble Lord said: My Lords, as this is my last appearance before your Lordships' House on this matter I take the opportunity afforded by this amendment to sum up our main objections to the Bill. They are four in number. I shall do this as quickly as I can because I do not want to delay the House unduly. The first objection concerns the character of the new good cause. It is very different from the others. It is an integral part of the Government's social programmes, not a desirable extra. As such, it has two consequences. First, the new opportunities fund will be much more directed as to what it should do than the other distributors. The much greater powers that the Secretary of State has taken under the Bill are a direct consequence of the new good cause. The second consequence is that the new good cause is voracious. The Government have already announced three initiatives. There are sure to be others added. That is why we expect that over time the new opportunities fund will take a larger and larger share of the total of national lottery money available for distribution. That is our first objection to the Bill.
Our second criticism arises from the Government's refusal to entrench the shares of lottery moneys going to the arts, sport, the national heritage and charities. Together with the Liberal Democrats, we have repeatedly asked for such entrenchment and the Minister has always refused. It is hard to resist the conclusion that the Government regard the flow of money to these causes as residual—the amounts of money left over after their prior commitments to the new opportunities fund and NESTA have been met. I have read carefully what the Minister said at Report. He promised that,
"barring the extremely unlikely circumstance in which lottery income for good causes is less than £10 billion in total"—
that is, over the existing seven-year contract period—
"we shall ensure that each of the existing good causes receives by 2001 the £1.8 billion expected when the lottery started".—[Official Report, 9/3/98; col. 21.]
They have already received £1 billion each under the legislation of the previous government. Of the remaining expected total of £5 billion, the National Millennium Commission will get £1 billion and the new opportunities fund another £1 billion, leaving £800 million each for the remaining good causes; that

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is, for the arts, national heritage, sport and charities. Therefore, they will lose £200 million each under the new legislation. Admittedly, this is a loss in relation to the expected £10 billion rather than the originally estimated £9 billion. Therefore, the Minister was able to argue that their original expectation had been left undisturbed. But this is a feeble argument, as my noble friend Lord Crickhowell pointed out at Report. The original expectations were not for a sum of money but for a percentage. No one knew in 1993 that the money would be £9 billion, just as no one today can say for certain that over the next three-and-a-half years the lottery will have £5 billion, £4 billion or even £3 billion to distribute. Suppose that the economy goes into recession. Stranger things have happened, even under Labour governments.
Does the Minister claim that in such circumstances people will go on spending the same on the lottery as they now do? He would be very incautious if he were to do so. That is why percentages are at the heart of the matter. The Minister cannot guarantee money but he can guarantee percentages. That he has always refused to do.
Let me rephrase the questions I asked on Report. Will the Minister assure us that in the event of the total for distribution over the next three-and-a-half years falling below what is expected he will protect the £1.8 billion that he has promised for the four good causes? Will he give an undertaking that in the event of the total for distribution exceeding the £10 billion he will ensure that a fair share of that surplus goes to those good causes?
Our third criticism concerns the commercial aspects of NESTA—the new endowment set up to help science, technology and the arts. We do not believe that it should become a business angel. It is not set up to second-guess the market, and it should not be trying to do so. I have put that argument repeatedly during the Bill's passage, but it has been water off a duck's back so far as concerns the Government. They will have to live with the consequences.
Finally, I come to the subject of the amendment. I have just one thing to add to what I said on Report. It arises directly from the Minister's remark:
"Carrying the re-allocation of funding back to October 1997 does not affect the total money re-allocated from the existing good causes to the NOF and NESTA".—[Official Report, 9/3/98; col. 31.]
I am glad that we have at last a candid admission that the Government have been re-allocating money from last October. There is no fiction about those shadow accounts in that statement.
The Minister said that had that re-allocation not started, the new opportunities fund's share would have had to be set higher and the existing distributors' share lower than is now the case to make up for lost time. He asked what was improper about that. What is improper about it is that the national opportunities fund was not entitled to receive a penny of the money before the Bill became law. Had the Government wanted the new opportunities fund to have the £1 billion that they imprudently promised in their manifesto they should have put a higher percentage in the Bill with a lower
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percentage for the existing distributors. That would have been the honest thing to do. It would also have made transparent the extent of their raid on the four good causes. I understand why they preferred to do it the way that they did but it is underhand and sets a thoroughly bad precedent. I beg to move.
Lord Redesdale: My Lords, I have a number of questions about the amendment. Its purpose is to expose some of the problems that we see over the way in which the new opportunities fund has been set up. First, if subsection (9) were to be left out of the Bill, what effect would that have on the moneys that have been set aside? If the money had to be put back into the funds immediately, would that mean an enormous cash injection to the existing five good causes? Could they then go ahead with some of the projects that they have put on hold? If that is the case, the Minister may have been mistaken when he said that it would have no effect on the projects that the five good causes are planning.
At an earlier stage of the Bill, the Minister said that the Government needed to set up these shadow accounts retrospectively so that the money would be available for the new opportunities fund to put in place immediately the Bill became law. He even went so far as to say that if the money were not made available, 25 per cent. of money available for good causes would have to be put aside and spent on the new opportunities fund to fund the new initiatives. I have a slight problem here, because we have had the jargon of the people's lottery. But these new initiatives have to be classified as government initiatives. The Minister said that the projects had already been put forward and so they had to go forward. I examined carefully what was said at the previous stage. I find that they were initiatives put forward by the Government in their manifesto, and this is a way of funding them.
I have a problem also with the fact that the figure would have to be 25 per cent. if the matter could not be dealt with retrospectively. I find that a seductive argument, because it is open ended. These are government initiatives. So if something comes forward which is said by the Government to have massive popular appeal they might have to provide for a larger percentage of lottery money to be allocated to it. Is that the Government's intention? The least we can expect is an assurance from the Government.
I offer the Minister this salutary thought. If a Liberal Democrat government were to be formed after the next election, this would be a Liberal Democrat new opportunities fund. We would be able to push it in our direction. A proposition that the Government might find less attractive is that if the Conservatives were to win the next election, it would be a Conservative new opportunities fund. I support the initiatives put forward by the new opportunities fund. But they are open ended. There is a good deal of concern that they will follow the political agenda of the party in power.
One of the reasons why I cannot support the amendment is that I support the formation of NESTA. I agree with the underlying reason for its formation. I like the idea of the Government becoming a business angel. However, I have difficulties over the way that the

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money has been allocated. I have asked in the past for some examples of shadow accounts. I have not received any examples. The Minister may have some. We are talking about retrospective legislation. In the past, when we have discussed retrospective legislation, we have always been met with precedents. I find it difficult to believe that this might not be used as a precedent for the Government to enact retrospective legislation in the future.
3.15 p.m.
Lord McIntosh of Haringey: My Lords, I am grateful, paradoxically, to the noble Lord, Lord Skidelsky, for introducing the amendment as he did, because he gave a summary of the more serious objections which, I know, he and his party have to the Bill. I realise, as he does, of course, that the first three points were not specifically relevant to the amendment. But that helps us to treat, as I think we must learn to do, the Motion that the Bill do now pass as a formality rather than a repetition of earlier debate. Although he will forgive me if I respond only to the amendment, it was welcome to have the noble Lord's broader views on the record at this stage.
The noble Lord made the points about the amendment extensively in Grand Committee and on Report. It behoves me to repeat, with all the force that I can, that we are not doing anything illegal or improper. There is some misconception that the Government and the distributors have been acting illegally by keeping shadow accounts since last October which show how the National Lottery Development Fund would be distributed if the legislation were in force. There is nothing illegal about that arrangement. Neither the department nor the distributors needs any statutory authority to keep such accounts.
I say in response to the fourth question asked by the noble Lord, Lord Redesdale, that that is why there are no precedents in legislation for us to bring before the House. It has never been a matter of primary legislation for shadow accounts to be set up. That does not mean that it has not happened. It just means that I cannot find it in legislation.
There is nothing improper or unusual about the fact that the subsection, which the noble Lord, Lord Skidelsky, is pressing us to remove, uses as its effective date a date before Royal Assent. That is not unfair; it is accepted and welcomed by the distributors. I must repeat the point that it makes no difference to the amount of money which will be allocated to the new opportunities fund and NESTA over the licence period. Therefore, my answer to the third question asked by the noble Lord, Lord Redesdale, is that, because it is neutral over time and since money has been put aside in shadow accounts, it will be necessary to have a higher percentage for a shorter time in order to obtain the same money. No more money will be required as a whole.
My answer to the noble Lord's first question—I am sorry to answer them in the wrong order, but that is the way it has worked out—is that if there were no subsection (9)—in other words, if the amendment were to be carried—there would not be a cash injection to
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existing good causes for two reasons. First, the cash in the National Lottery Development Fund is held by the fund for the good causes and handed over only when they ask for it. It is underspent as regards the money that has so far been allocated to it. Secondly, since we put the proposal into our manifesto last April the good causes and the distributors have known that that would be the case. They have known the extent to which their expectations would be safeguarded, but at the same time they have known that additional money over and above the £9 billion which is now expected would be going to the new good cause. I am grateful for the noble Lord's general support for that new good cause.
I must continue to resist the suggestion that there is anything unfair or unreasonable about that proposition. By introducing the date of 14th October 1997, we are spreading the percentage over a longer period rather than having a much higher percentage coming into effect only after Royal Assent. The fundamental fact is that the total amount of money available to the good causes will be no different whether or not the amendment is carried, but the damage done by carrying the amendment would be the serious loss of momentum by the new opportunities fund and NESTA. It would take them longer to get themselves up and running and making grants, and we believe that that would be thoroughly undesirable.
I hope that on that basis, rather than repeating the arguments in detail, the noble Lord will see fit to withdraw his amendment. If not, I must ask your Lordships to reject it.
Lord Skidelsky: My Lords, we do not accept retrospection as the right procedure, but we recognise that we have come to the end of the Bill in your Lordships' House. I conclude by making one observation. We are witnessing the Government's determination to annex for their own purposes the money which was originally intended for arts and leisure activities in this county. Through the National Lottery, we created a unique opportunity to raise the standards of our civilisation, with benefits stretching well into the next century.
The National Lottery etc. Act of 1993 provided a unique opportunity to escape from the Treasury straitjacket. It enabled us to make modest preparations for the good life, which is, after all, the task of economics to make possible. Instead of seizing the moment and running with it, the Government now intend to encumber that civilising opportunity with their own largely utilitarian programmes. I am certain that the cultural life of our country will be the poorer for it. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
An amendment (privilege) made.
Lord McIntosh of Haringey: My Lords, I beg to move that the Bill do now pass. In doing so, I wish to thank all those who have taken part in the passage of the Bill in the House and behind the scenes. I am grateful in particular to the noble Lord, Lord Skidelsky. and the noble Baroness, Lady Rawlings, for agreeing that the

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Committee stage should be taken off the Floor in Grand Committee. I hope they will agree that the experience was not too painful. As debate continued we were able without difficulty to allocate a third day to the Committee. Therefore, there was no time constraint, explicit or implicit, on those debates. That was to the benefit of the Bill as a whole.
From the Conservative Benches, I am grateful to the noble Lords, Lord Crickhowell and Lord Rees, and to the noble and learned Lord, Lord Fraser, for drawing attention to the Scottish and Welsh aspects of the Bill. I am pleased that it was possible to make clear to your Lordships that convergence between devolution legislation and other legislation passing through the House has been well planned and well resolved as between my department and the Scottish and Welsh offices. It was helpful to have that issue drawn to your Lordships' attention.
From the Liberal Democrat Benches, I am grateful in particular to the noble Lord, Lord Redesdale, and the noble Viscount, Lord Falkland, for their detailed, constructive interest in the Bill.
From my own Benches my noble friends Lord Howell and Lord Bassam were particularly helpful. From the Cross-Benches, the noble Lord, Lord Chorley, took an active and helpful part and I hope that we have gone some way to meet his concerns. The right reverend Prelates the Bishops of Oxford and Southwell raised the issue of under-age betting which gives them and us great concern. I am grateful to them for their contribution.
Obviously, I have left out some noble Lords, but I hope that I have recognised the contributions made in front of the camera, so to speak, during the passage of the Bill. Behind the camera there lies a highly efficient and responsive Bill team and I am grateful to them for their contributions. I wish them well as the Bill goes to the other place.
Moved, That the Bill do now pass.—(Lord McIntosh of Haringey.)
On Question, Bill passed, and sent to the Commons.

Data Protection Bill [H.L.]
3.28 p.m.
Report received.
Clause 1 [Basic interpretative provisions]:
Baroness Turner of Camden Baroness Turner of Camden moved Amendment No. 1:
Page 2, line 9, at end insert—
("provided that this definition shall not he construed as applying to any operation performed only for the purpose of preparing the text of documents:).
The noble Baroness said: My Lords, as I believe my noble friend the Minister may know, I have for some years been a lay member of the Professional Standards Committee of the General Council of the Bar. I have been alerted to a problem about the Bill by one of my fellow members, a barrister, who tells me that the present Bill omits a provision which existed in the
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previous Data Protection Act. It is a provision the effect of which is that individuals using the computer as a word processor—virtually as a typewriter—do not have to register.
I gather the provision was originally intended to protect the position of those—and there must be many—who are in the process of making the transition from typewriters to computers. Letters to individuals processed in this way could therefore contain names, addresses and personal data. Of course, those data are capable of being stored if a computer is used, although very few people bother to do this. Under the new Bill, however, I gather that that provision is lost. Does that mean that someone using a computer in that way would be required to register? Is that omission an oversight or is there some particular purpose in it?
That has been brought to my attention by a barrister who uses a computer in that way. But it can affect a large number of people who are not barristers. Surely it is not intended to make people register who, a few years ago, would simply be using a typewriter. In my case, I have not yet made the transition to a computer but I use an electronic typewriter on which, if I wanted to, I could store text. If I switched to a computer with a much greater storage capacity, would that mean registration?
I must apologise to the Minister for not raising this issue in Committee. It is a matter which would have been better ventilated in Committee but, as he will know, people with concerns about legislation rarely tell you of them in time. Because I thought that my colleague had an issue which should be ventilated, I have tabled this amendment on Report. I beg to move.
Viscount Astor: My Lords, I have tabled Amendment No. 2, which is grouped with this amendment, because in Committee, there was some difference between the Government and the registrar as regards the definition of manual records. However, I notice that the noble Lord, Lord Williams of Mostyn, has tabled government Amendment No. 3, which I believe solves the problem. Therefore, it may be for the convenience of the House if I let the Minister speak first and thereafter I may or may not have to speak again.
Lord Williams of Mostyn: My Lords, I am obliged to the noble Viscount. His Amendment No. 4 is also within this group and I am entirely in his hands as to when he wishes to speak to that amendment, if at all.
I accept entirely what my noble friend said. This matter has come to light, as sometimes happens, during the course of the Bill. I do not reproach her in the slightest way.
My noble friend is quite right to say that the 1984 Act provides an exclusion from the definition of processing for operations performed only for text preparation which may include simple word processing. Therefore, this amendment seeks to replicate that exclusion—in other words, the 1984 exclusion—in this Bill.
In the White Paper of July last year, we said that the directive does not allow a continuation of that exclusion. The definition of "processing" in the directive is much

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wider than that in the Act and we are therefore obliged to follow it. There is no scope for us to make the definition in the Bill more restricted in the way my noble friend suggests.
We wonder whether there is a problem in practice. Text preparation in the form of word processing will be, to a considerable extent—possibly almost always—done as an adjustment to other processing which itself is likely to be caught by the Bill. Therefore, the application of the Bill to word processing is unlikely to bring any additional significant burdens.
However, I understand that my noble friend and others are concerned about additional burdens flowing from the notification requirements in the Bill. The same White Paper, to which I referred, said that the Government would exempt word processing from the notification arrangements if such an exemption proved necessary. I hope that on the basis of what I have said, my noble friend will feel able to withdraw his amendment.
I deal now with the linked amendments referred to by the noble Viscount. As he rightly said, this matter flows from the discussions that we had in Committee. The noble Viscount's amendment seeks to leave out the word "particular" and we seek to leave out the word "particular" and to include the word "specific".
These two amendments are quite small. They tend to go in different directions. We believe that the noble Viscount's amendment would widen the scope of the definition quite considerably and bring in more manual records. As I said in Committee, I do not believe that his amendment would be welcome to all those who currently hold large collections of manual records. On the other hand, our amendment makes it clear, and is intended to make clear, that the definition is one of limited scope.
This is a difficult area. We believe that the definition as it stands in the Bill gives full and proper effect to the directive's requirements. We believe that the directive applies to a limited category of manual records. Essentially, they are those which meet three criteria: first, that they form part of a structured set; secondly, that the structuring is done by reference to individuals or criteria relating to individuals—for example, a unique personal identification number; and, thirdly, that the structuring is done in such a way that particular information about individuals is readily available. It is that final criterion that is the subject of the two amendments.
Our intentions are clear. We do not wish the definition to apply to miscellaneous collections of paper about individuals, even if the collections are assembled in a file with the individual's name or other unique identifer on the front, if specific data about the individual cannot be readily extracted from that collection.
An example might be a personnel file with my name on the front. Let us assume that the file contains every piece of paper or other document about me which the personnel section has collected over the course of my career; and those papers are held in the file in date order, with no means of readily identifying specific
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information about me except by looking at every document. The Government's clear intention is that such files should not be caught. We want to catch only those records from which specific information about individuals can be readily extracted.
Let us take the case of a personnel file consisting only of information about my sickness record during my career. If that file has my name on the front and is part of a structured set, that file will be caught because the specific information about me, my sickness record, is readily available.
The Data Protection Registrar has said that she does not believe that the current definition of "relevant filing system", achieves the Government's intention of distinguishing between those two sorts of files. She suggests that an unindexed general personnel file is itself capable of counting as "particular information" about an individual. That information is particular only in the sense that it is limited to a rather unspecific category of personnel information. I can see that the word "particular" is ambiguous to the extent that it has the potential to yield that somewhat attenuated meaning. That is not what we intend.
We intend that "particular" information should mean "specific" information. That is what our amendment provides. The search for unambiguous language can sometimes be exhausting. I do not say that "specific" admits of no shades of meaning; it does. Information may be more or less specific in different degrees of detail. Very much may depend on context. But if there is any significant ambiguity in the introduction of "specific" into the definition of "relevant filing system", it is not capable of admitting into that definition the sort of general, unindexed personnel files that we have been talking about. All the information in those files may conceivably be thought "particular" but not "specific". "Specific" information is intended to mean and does mean distinct information within the file which can be distinguished from other information in the file and separately accessed. It means information of a distinct identity which sets it apart from the rest of the generality of personal information held. That is what our amendment intends to pin down. I hope that the noble Viscount will agree that our amendment is an improvement because we were looking for the same outcome.
We have paid careful attention to what the noble Viscount said and to what those in business and industry have expressed as concerns and we wish to address those concerns.
Baroness Nicholson of Winterbourne: My Lords, I oppose the noble Viscount's amendment and seek reassurance from Her Majesty's Government. I am concerned lest paper files which hold potentially damaging information about individuals without their knowledge may not be covered even by the government amendment. I wish it to be possible for those paper files to be accessed by the individuals concerned.
I do not wish to name any specific organisation, but there is one which I have in mind. I shall not name it but I shall define it. That organisation has been

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investigated by the police. I am sorry to say that one particular major political party has used it on a regular basis in order to target political opponents.
Given that the police investigation disclosed, I believe, nothing improper, I had understood that that organisation was no longer targeting people who were political opponents of one political party. I am sorry to say that that is not so. There are people who may be shop stewards, who may belong to unions and who may disagree with management, whose personal files are still being held by that organisation and whose job prospects are still being harmed.
I met a person involved in such a case on Friday. His job prospects have been harmed during the past two weeks. That man has had his name on a file of that organisation for eight years, and he can give a record of jobs for which he has been blacklisted because of the situation. If he had access to that information, he could at least tell whether the information that the organisation holds on him, or purports to hold on him, is accurate. He could then raise the matter with the personnel officers of the companies to which he has applied for jobs. I am concerned about this; I want to make absolutely sure that ordinary working men and women do not have their job prospects harmed through invisible mechanisms which this Bill is surely designed to stop.
Lord Skelmersdale: My Lords, before my noble friend responds, perhaps I might point out that, although this is the Report stage, we seem to be getting into a slight muddle because of this particular grouping. However, leaving that issue aside, I should very much like to comment on the Government's amendment, Amendment No. 3.
In Committee I declared an interest as the holder of a manual records set. As such, I think I am grateful to the Minister for the Government's amendment. As I understand it, any collection of paper documents which cannot be accessed by a particular subject would be covered by that amendment. However, I am not so sure as regards the position on a manual address list, where it involves purely the person's name, his address and a continuing set of order numbers.
Clearly, if one is given the order number over the telephone one has to look up the invoice and then refer to the reference. However, if one is given the name, one can then do the operation the other way round. I am not sure whether this is "specific". I gain the impression from what the Minister said that it almost certainly is not. Perhaps the Minister would care to confirm that either today or in writing before the Third Reading debate. I should be most grateful.
Viscount Astor: My Lords, before the noble Baroness replies, I should like to express my thanks to the Minister for Amendment No. 3, which I believe actually deals with all the questions that I put forward in Committee. Indeed, it also appears to deal largely with the content of Amendment No. 4, which is tabled in my name. Obviously I shall have to read carefully what the noble Lord said because his introduction was somewhat complicated. However, I have one brief
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question. Does the result of his amendment mean that the Government and the registrar are now agreed on the definition of what are and what are not relevant manual records?
Lord Williams of Mostyn: My Lords, as I believe I set out in my introduction, I cannot say that there is perfect agreement on the matter. There are shades of meaning here and much will depend on good sense in practice. We have taken on board the legitimate concerns raised by the noble Viscount and others, especially as regards large organisations—some of them governmental—which may have carried an intolerable burden over many years when dealing with manual records. I should like to research the point raised by the noble Lord, Lord Skelmersdale, and write to him extremely promptly on the matter.
I take note of the concerns expressed by the noble Baroness, but I do not believe that they relate to the amendment for which I was contending. We are looking for a word which expresses the concept that we are all trying to find; namely, that one should have access to specific material which is readily accessible. I believe that what I have said deals with the questions put forward. I trust that I dealt earlier with the troubles which worried my noble friend Lady Turner of Camden.
Baroness Turner of Camden: My Lords, I thank my noble friend the Minister for his explanation. I had not appreciated that the directive gave the Government so little scope to do what was proposed in my amendment. However, I am grateful for my noble friend's assurance that it is not the Government's intention to impose additional burdens on individuals. On that basis, and with thanks again to my noble friend for his explanation, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 2 not moved.]
Lord Williams of Mostyn Lord Williams of Mostyn moved Amendment No. 3:
Page 2, line 19, leave out ("particular") and insert ("specific").
On Question, amendment agreed to.
[Amendment No. 4 not moved.]
3.45 p.m.
Schedule 1 [The data protection principles]:
Lord Williams of Mostyn Lord Williams of Mostyn moved Amendment No. 5:
Page 41, line 2, leave out ("in writing") and insert—

("(i) which is made or evidenced in writing, and

(ii)")

The noble Lord said: My Lords, this amendment relates to contracts between data processors and data controllers and picks up a point raised by my noble and learned friend the Solicitor-General when responding to Amendment No. 26 in Committee.
Paragraph 13 in Part II of Schedule 1 provides that processing by a data processor on behalf of a data controller shall not be regarded as complying with the seventh data protection principle, which relates to security measures to prevent unauthorised processing or

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accidental loss, unless it is carried out under a contract which requires the processor to meet the necessary obligations. That is a requirement of the directive. The amendment responds to a point that was raised and allows that such a contract may be made or evidenced in writing. The explicit point of the director's requirement for writing is,
"for the purposes of keeping proof".
That may equally well be done by a contract made in writing or a contract evidenced in writing.
Amendments Nos. 6 and 7 are grouped with this amendment. They are tabled in the name of the noble Viscount, Lord Astor, and perhaps I might, therefore, allow him to take what course he thinks appropriate in that respect. In the meantime, I must point out that I have spoken only Amendment No. 5. I beg to move.
Viscount Astor: My Lords, it may be convenient for me to speak now to Amendments Nos. 6 and 7, which are included in this group. We find ourselves in a complicated area which deals with transfers of data between this and other countries, especially as regards the United States. I am grateful to the Minister for the meetings that have taken place between the Committee and Report stages. We do not seem to have reached a conclusion on the matter, although I believe that there are some pointers.
We are dealing with an extremely important area because it particularly affects American countries with operations in this country, or, indeed, British companies with substantial dealings in the USA. One of the difficulties is that the United States does not have a federal data protection Act of general application, although a number of states do have such protection. However, there is a wide range of codes of conduct and also contractual restrictions and individual business requirements which provide many of the protections provided for in the new data protection legislation. It was presumably for that reason that the registrar came out so firmly for allowing the broadening of paragraph 14 of Schedule 1.
There is a large number of cases where it is essential for American and British companies—for example, airline companies, pharmaceutical companies and software companies—to transmit massive amounts of data which are entirely appropriately protected in the United States. As one of the largest trading partners of the United Kingdom, the United States cannot be cut off from the flow of data from this country. If that were to happen, there would be serious disruption in day-to-day business and in the legitimate exchange of information.
Obviously, those whose data are transferred have to be protected. I read again, with care, the argument proposed by the noble and learned Lord the Solicitor-General in Committee that it can all be brought within Schedule 4. However, paragraph 2 of Schedule 4 deals only with the transfer of information between the data subject and the data controller which typically is not the subject of cross-border data flows. An American or British airline needs to be able to transfer information about bookings and seats, flight schedules and pilot and
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cabin staff rotas. If it has to get permission from the data subject to make any transfer, it will become exceedingly difficult to do business in the United States.
At Committee stage the Minister also relied for his argument on paragraph 3 of Schedule 4. This initially seems to suggest that contracts between a data controller and a person other than the data subject can be enforced, but only if it is possible to prove that they were entered into at the request of the data subject or are in the interests of the data subject. Once again I believe this could impede any reasonable day-to-day handling of the kinds of business data that I have mentioned and would make it extraordinarily difficult for a British pharmaceutical company, for instance, to transfer information to obtain FDA permission for its drugs to be sold in the United States. The Minister did not point out in connection with paragraph 3 of Schedule 4 that contractual provisions are insufficient unless the contract is entered into at the request of the data subject or they are,
"in the interests of the data subject".
This provision would in reality make it possible to hold up any transfer of information to the United States indefinitely.
Paragraph 8 of Schedule 4 allows the transfer to be made on terms approved by the commissioner. If these were made in general terms it would be possible to handle some of the issues that I have raised. However, the effect of globalisation of trade means that the nature of contracts that are needed is constantly changing. American financial institutions have to transfer data constantly about accounts and various other matters to their head offices in New York or any other American city. British banks and financial institutions which hope to continue trading in the American market will also experience difficulties in having to clear every new arrangement—the nature of derivatives, for example, changes daily—with the registrar.
The principal problem with the Schedule 4 approach is that it assumes that countries such as the United States will have inadequate data protection in virtually every case, and that data can be transferred to the United States only in the "force majeure" situations listed in the schedule. My amendment recognised that contractual protections may be one factor of many listed in Schedule 1 in determining that in appropriate cases data transferred to the United States may have the adequate protections that the law requires.
This is a complicated area. I have mentioned the United States because institutions in this country, particularly financial institutions, do so much business with that country. However, the matter could apply equally to other countries. I moved this amendment in Committee. While we have made progress in some of the discussions which have taken place as regards explaining the problem, I do not think we have made any progress in finding an answer. That is why I have spoken to this amendment again today. I look forward to the Minister's reply to determine whether he can help me in this difficulty.
Lord Williams of Mostyn: My Lords, I am grateful for the exposition which has been given. I was most pleased to hear that the discussions which have taken place with officials have been helpful if not entirely productive of an outcome that everyone can accept. The proposition which is being put is that contracts in appropriate cases should be able to make a contribution to a finding of adequacy for the purposes of Schedule 1. We believe that that is already the case as the Bill is drafted. Paragraph 14 of Part II of Schedule 1 states that,
"An adequate level of protection is one which is adequate in all the circumstances of the case".
I emphasise that. It is the full situation in individual cases—both legal and practical—which must be considered. The ensuing list of matters in paragraph 14 is not exhaustive. If the person to whom data are exported is under relevant contractual obligations and the country or territory in question is one with an effective contractual enforcement system, that may well contribute to a finding of adequacy.
There may be, for instance, a relevant code of conduct in force in the territory in question which the recipient of the data is contractually bound to comply with. The fact of that contractual obligation is clearly relevant to the question of whether the overall level of protection offered by that territory is,
"adequate in all the circumstances",
as paragraph 14 requires. Similar considerations would of course apply vis-à-vis security measures, to which this amendment specifically relates.
We are not persuaded that there is a gap in the scheme which this amendment could usefully fill. The list of mandatory considerations is designed to highlight the most important issues. It follows clearly the words of Article 25.2 of the directive. However, other factors will be relevant. That is the reason for the phrase,
"all the circumstances of the case".
There is no end to the circumstances which could be listed. We have highlighted the major factors indicated by the directive.
The noble Viscount said that this was a difficult area. We understand that. I shall reflect further on what the noble Viscount has said today. I cannot accept his amendment today but we shall look carefully at the points he has raised this afternoon. I hope that in respect of Amendment No. 6 the noble Viscount will accept those comments and will not press the amendment.
Viscount Astor: My Lords, I am grateful to the Minister for those comments. I shall not press the amendment, but this is a matter that we must try to make clear before the Third Reading of the Bill.
On Question, amendment agreed to.
[Amendment No. 6 not moved]
Schedule 3 [Conditions relevant for purposes of the first principle: processing of sensitive personal data]:
[Amendment No. 7 not moved.]
Lord Dholakia Lord Dholakia moved Amendment No. 8:
Page 43, line 21, at end insert—
(" . The processing is—

(a) undertaken only for the purpose of promoting, ensuring or monitoring equality of opportunity or treatment between persons of different racial or ethnic origins, and

(b) carried out with appropriate safeguards for the rights and freedoms of data subjects.").

The noble Lord said: My Lords, let me first declare an interest in this amendment. At one time I worked at the Commission for Racial Equality and made my maiden speech in this House on the subject of equal opportunity in a debate proposed by the noble Baroness, Lady Turner of Camden, some time ago. It should therefore come as no surprise to your Lordships' House that I move the amendment in my name on the Marshalled List.
I express my concern and also the concern of the Commission for Racial Equality, which is a body set up by the Government to promote equality of opportunity and good relations among our various communities. It has the full backing of the Home Office in this important task. Equal opportunity has no meaning unless this process is adequately monitored. Needless to say the commission is concerned about the impact of the Data Protection Bill on ethnic monitoring. I believe the amendment I propose will address this deficiency.
The Data Protection Bill as drafted imposes a general prohibition on the processing of sensitive personal data, which includes data on racial and ethnic origin. This causes a major problem. The recording or analysis of the ethnic origins of employees or service users will not be lawful unless one or more of a number of specified conditions set out in Schedule 3 to the Bill are met or unless the purpose is one within any of Clauses 27, 28 or 31. Let me remind your Lordships that these relate to national security, prevention and detection of crime, assessment or collection of taxes etc.
The conditions in Schedule 3 do not include any reference to processing for the purpose of ethnic monitoring and none can be reasonably interpreted as permitting it. The Bill in its present form will therefore permit ethnic monitoring by employers and service providers only if data subjects give their explicit consent as stated in paragraph 1 of Schedule 3.
Paragraph 9 of Schedule 3 confers on the Secretary of State a general power to stipulate by order further conditions in which sensitive personal data may be processed. I am well aware from my discussions with the Commission for Racial Equality that it has been in touch both with the Home Secretary and the noble Lord, Lord Williams of Mostyn. The Minister has indicated that it is the Government's intention to use the power in paragraph 9 of Schedule 3 to permit ethnic monitoring. Let me say straight away that this approach is not equivalent to the inclusion of such an exception in primary legislation. The Minister must therefore accept that this is highly damaging to the work of the Commission for Racial Equality and others working to promote ethnic monitoring.
The amendment, which has the support of my noble friend Lady Nicholson, has the clear objective of including in the Bill a specific exception relating to

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ethnic monitoring. It will make clear to all employers and service providers that the Data Protection Bill will permit ethnic monitoring. I believe that that is crucial.
It has been a hard struggle to get where we are on the important subject of ethnic monitoring. The uncertainty as to what the law will permit will increase reluctance and may lead some to abandon the issue altogether. I do not believe that the Government's explicit commitment to equality of opportunity in their manifesto ever envisaged the placing of such a restriction.
Let me take the example of the CBI's equal opportunities forum. It shares the view that the Bill should be amended. It shares the view that this provision should be made evident on the face of the Bill rather than being dealt with in subordinate legislation. The TUC agrees that the Bill needs amendment for this purpose. If the Bill is not amended, the message will be clear. It will suggest that racial equality and the means of achieving it are not a priority. It strikes at the heart of all government policies because they frequently refer to the centrality of equal opportunity to their work.
In all the years that I have known the Minister I have never doubted his total commitment to racial equality and the means of achieving it. I believe that, on reflection, he will accept that the amendment gives weight to the CRE's code of practice issued under Section 47 of the Race Relations Act. This is vital to the promotion of the objectives of all those who work to build a decent society free from any improper discrimination. Ethnic monitoring should be in the mainstream of legislation rather than delegated to its margins. If the Government decline to accept this reasonable amendment, they risk being seen as failing to take positive action to promote equal opportunity when there is an easy and available opportunity to do so. The amendment has all the necessary safeguards for the data subject. I commend it to your Lordships.
4 p.m.
Baroness Nicholson of Winterbourne: My Lords, I support the excellent amendment of my noble colleague and urge the Minister to support it or to investigate the subject most seriously. As my noble friend so rightly says, ethnic monitoring should be in the mainstream and forefront of the Government's policies. I feel confident that with this Government it is. I remind the Minister that the last government opposed this legislation. The new Government give matters such as ethnic monitoring the importance that I believe is obligatory in a multicultural and multifaith society.
I also draw the Minister's attention to the second part of the amendment. It provides carefully for the rights of subjects, ensuring that that part of the amendment is also taken into account. It is of vital importance that employers should not misuse this information if, as we hope, our amendment, or some provision close to our amendment, is placed on the face of the Bill.
Lord Williams of Mostyn: My Lords, the noble Baroness puts forward the most powerful of arguments; namely, that the last government opposed the provision. It is deeply seductive!
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I sympathise and understand, I hope, the reasoning underlying the speeches of the noble Lord and noble Baroness. As they rightly say, ethnic monitoring is not on the face of the Bill. That is partly because our Schedule 3 follows closely the relevant provisions in Article 8 of the Data Protection Directive which does not mention ethnic monitoring.
Originally we thought that we would go by way of order under paragraph 9 of Schedule 3. We could have had the necessary measure of detail and flexibility so that we captured all necessary angles properly. That would have given us the benefit, in due time, of easier amendment power, because this Bill will be an Act which has to last for a long time and needs to be sufficiently flexible.
I understand the persuasive force of the noble Lord's argument. The Home Secretary had a meeting with Sir Herman Ouseley recently. I had the benefit of further conversations with him with officials as recently as Friday. We have said throughout that we are perfectly willing to have an open mind. I hope that I can demonstrate that on this occasion by saying that the Government are content in principle for the Bill to be amended along the lines suggested.
While paragraph (b) is well intentioned, we believe that it may not hit the target, but that is a matter of drafting, not of principle. Therefore we do not think that the amendment is perfect. I do not think that even the parental joy of the noble Lord, Lord Dholakia, would necessarily pretend that his offspring was perfect. We shall put matters in hand for the Government to bring forward their own amendment to deal with the point. I accept that it is in many ways a point of principle and an extremely important indicator of how seriously the Government deal with these matters. They are matters of great sensitivity but equally of great principled importance.
We shall try to do that by Third Reading. We are very tight on time. I think that the noble Lord and the noble Baroness know how extremely stretched officials are at present because they have been in continuing discussions, not only on drafting but also other matters, with noble Lords who are interested. We shall do our very best. It is possible that we shall not be ready for Third Reading. If we are not ready for Third Reading in this House, we shall be looking to bring forward an amendment in another place.
Viscount Astor: My Lords, before the Minister sits down, perhaps I might briefly interject. The noble Baroness says that the previous government were against her amendment. I find that rather surprising. It was the previous government who negotiated the directive with Europe in the first place. If it had not been for our part in that, we would not have a Data Protection Bill now.
Lord Williams of Mostyn: My Lords, I do not wish to intrude into private grief.
Lord Dholakia: My Lords, I am grateful to the Minister. Once in a while when amendments of this nature are accepted it restores one's faith in this House.

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Perhaps I may press the noble Lord a little further about the timescale so that we are aware of the progress being made.
Lord Williams of Mostyn: My Lords, I can do no more than say that we hope to have the provision ready for Third Reading. However, Third Reading is almost upon us. If it is humanly possible to achieve a properly workable amendment, we shall do so before the Bill leaves your Lordships' House. If not, I undertake that the measure will be brought forward in another place so that it will form part of the Bill in due time.
Lord Dholakia: My Lords, I am grateful to the Minister. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 5 [The Data Protection Commissioner and the Data Protection Tribunal]:
The Solicitor-General (Lord Falconer of Thoroton)The Solicitor-General (Lord Falconer of Thoroton) moved Amendment No. 9:
Page 46, line 13, after ("Act") insert ("or section 158 of the Consumer Credit Act 1974").
The noble and learned Lord said: My Lords, in this group, I beg to move Amendment No. 9, and speak to Amendments Nos. 12, 13, 16 and 70. This set of government amendments effectively brings the rights which data subjects have under the Consumer Credit Act 1974 to obtain access to their data under the same roof as those of the Bill.
As it presently stands, Clause 8(8) of the Bill takes a first step towards streamlining the two access rights. It imposes an order of priority on unspecific access requests. But it leaves the dual regime intact; namely, data protection and consumer credit. As such, it can be seen only as an interim measure. The new government amendments complete the task. They replace the present Clause 8(8) with a unitary system of access under the Bill. They therefore ensure that all requests for general access have the benefit of the more comprehensive rights and remedies provided by the Bill.
But we have gone a step further. These amendments introduce in Clause 7 of the Bill a new right of access to specific data. Your Lordships will be aware that the subject access right under the Bill is a right of access to the generality of data held. It is not a right to insist on partial access. But the new amendments will now provide that a data subject making a subject access request to a credit reference agency may specify that his request is limited to personal data consisting of information as to his financial standing. This new limited right is supported by representatives of consumer bodies, trading standards authorities and the credit reference agencies themselves. Very often, this is the only information in which data subjects are interested in this context. We intend to use the powers in Clause 7 to make regulations to prescribe terms for the new limited access rights which are more favourable to consumers than the general subject access conditions may be. The new right is intended to be a cheap and fast means of acquiring access to the key financial information held by credit reference agencies.
We think, therefore, that we have given data subjects the best of both worlds. General access rights are given the benefit of the Bill's more extensive protections. And the new, optional, limited right preserves the advantages of speed and cheapness from the 1974 Act.
Those of your Lordships with an eye for detail will note that we have as a consequence removed rights of access to personal data from the scope of the 1974 Act. We have left other access rights (for partnerships and unincorporated bodies) under that Act intact. They are not the business of this particular Bill.
We have also preserved the rights of individuals who consider their consumer credit files to be incorrect, which are found in Section 159 of the 1974 Act. But where those rights relate to personal data, we have provided for their enforcement to be the responsibility of the data protection commissioner rather than, as now, of the Director General of Fair Trading. This is also part of the policy of bringing all of the 1974 Act's rights in respect of personal data into the Bill's fold. The rights in Section 159 are of course without prejudice to data subjects' rights under Clause 12 of the Bill, and the fourth data protection principle, in respect of inaccurate data.
These amendments therefore represent a clear shift of emphasis. That brings with it an increase in the commissioner's responsibilities. We are looking into the matter of an appropriate transfer of resources accordingly. I hope your Lordships will be able to welcome these amendments as an improvement to both data protection and consumer credit law.
Perhaps I may use this opportunity to mention a subject not specifically dealt with by this group of amendments; namely, enforced subject access. At Second Reading, I mentioned two important omissions from the Bill. One was the transitional provisions in relation to which the Government have now brought forward amendments to be discussed later in the course of Report stage. The second was provisions to meet the Government's commitment to outlaw the practice of enforced subject access.
I very much regret that the Government have still not yet been able to bring proposals on that second matter before this House. It is proving to be an extremely difficult issue. We still, however, intend to do something about the problem and will try to bring forward proposals at Third Reading. If we cannot manage to do so, we shall be looking to return to the matter in another place.
I now turn to Amendments Nos. 10 and 11 in this grouping. These are technical amendments. They ensure consistency in the terminology used within Clause 7. That is what the directive says. Subsection (1)(c) refers to the "communication" of information. Subsection (5), which relates to the same information, inadvertently uses the verb "supply", which is the language of the 1984 Act. These amendments substitute "communicate" for "supply" in subsection (5).
In Committee, the noble Lord, Lord Teviot, proposed an amendment to Clause 7(1)(c) to add the words, "or made available", to the word "communicated". The noble Lord thought that the addition of "or made

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available" would deal with the situation where people were given the opportunity to find for themselves information that it might be wearisome for somebody else to find. We said that we did not believe that "communicated" constrained the means by which information was provided. Because of what the noble Lord said, we consulted parliamentary counsel as to whether our view was correct. She confirmed that view. Under Clause 8(2) the controller, by agreement with the subject, may make information available to the data subject otherwise than by providing him with a copy. We therefore thought that the assurances we gave to the noble Lord were met, and hoped that by checking with parliamentary counsel we could give him further reassurance as to the concerns he raised in Committee.
Amendment No. 14 is, again, a rather technical amendment. It changes the definition of "relevant day" in Clause 7. Noble Lords may recall that we amended this definition in Committee to improve its drafting. I am afraid that even with those improvements, the definition as it stands is not quite right.
The Bill sets a time period within which data controllers must respond to subject access requests. As the Bill stands, the period may in some cases not start until the data controller has also obtained the consent of any third party who can be identified from the information in question. This could have the effect of delaying a data subject's access to the rest of this information unnecessarily. That is not what we want. The amendment, read with the existing Clause 7(5), addresses the point.
There is one other amendment in this group standing in the name of the noble Viscount, Lord Astor. Subject to the views of other noble Lords, I thought that I would leave the noble Viscount to develop that amendment. I beg to move.
4.15 p.m.
The Earl of Northesk: My Lords, as the noble and learned Lord has indicated, a number of these amendments bring an individual's rights of access to his credit reference agency files under the data protection regime. On the surface there is nothing wrong with that, albeit that the access has been satisfactorily regulated for 25 years under the Consumer Credit Act—which, incidentally, gave the first subject access rights available in the UK.
This is a major change being introduced at short notice, to all intents and purposes without consultation with the consumer credit industry. The potential knock-on effects are considerable. It could be argued that the primary function of the Consumer Credit Act is to ensure responsible lending, whereas the primary function of the Data Protection Act is to ensure confidentiality. The tension between those two very laudable aims has already led to enforcement action from the Data Protection Registrar in this area. The Data Protection Tribunal, seeking to balance the need for both responsible lending and confidentiality, gave a ruling. When lenders check the existing commitments of an applicant for a loan, credit reference agencies supply information about members of the applicant's family at
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the same address to avoid financial over-commitment in a family. The Director General of Fair Trading adjudged that an individual searching his or her credit reference agency file should be given all the information with which a lender might be supplied. Thus, so-called "third party" information may be included in an individual's file. That is a relatively small price to pay to avoid over-indebtedness and fraud.
However, Amendments Nos. 12 and 16—relating to the effective removal of subsection (8) of Clause 10—run against the grain of that ruling.
The provisions relating to disclosure in the current Data Protection Act and this Bill would appear to have two possible effects on the present situation. Either a data subject would not see all the information that might be given to a lender; or the credit industry would effectively no longer be able to see information about other persons with the same surname at the same address as the applicant. The consequences of either scenario would be very grave for the industry. The Bill is all about striking the right balance. While the credit reference industry may not be particularly popular, it is nonetheless an important contributor to personal and national prosperity. These amendments put it, and the safeguards to ensure its continuing viability and responsibility, at risk.
I should like to take this opportunity to make a more general point, which may become something of a refrain as we progress through the Bill. The noble Lord, Lord Williams of Mostyn, began his contribution to the Grand Committee with a mild chiding:
"I would gently ask that amendments are put down in a reasonable time".—[Official Report, 23/2/98: col. CWH 4.]
I do not wish to carp, but the Government tabled a number of amendments on Thursday and Friday of last week which, taken in toto, could fundamentally alter the balance of the Bill to date. Moreover, the substance of many of them concerns matters which have not been widely trailed and which, as a result, were not well rehearsed in Grand Committee. The amendments to which I have referred are a case in point. I hope, therefore, that the Government will give careful consideration to whether it is appropriate to press ahead with these amendments and others at this stage. In the circumstances, it might be more appropriate to think in terms of bringing them back at Third Reading when we have had the opportunity to reflect more adequately on their likely impact and effect.
Turning to Amendment No. 70, which is also in this grouping, I have considerable reservations about this new clause. As the noble and learned Lord explained, the amendment to Section 158(1) of the Consumer Credit Act 1974 substitutes a new meaning to the defined expression "the consumer" by extending it to partnerships and unincorporated bodies. Whatever the merits of so doing in a data protection sense, this revision is not repeated by way of amendment to the provisions of Section 158(5), which still talks about files in relation to an individual, an expression which will be removed from Section 158(1)(a). This is compounded by the amendment now proposed to Section 159(1), which will remove the expression "consumer" and substitute the expressions "individual" and "objector",

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the latter being defined in relation to the former—that is, individuals—but no longer being relevant to the definition of "consumer" in Section 158(5). These amendments show an alarming lack of clarity and consistency of thought. As drafted, they are highly likely to create a muddle and lead to inconsistencies of interpretation.
Equally disturbing is the amendment proposed in relation to the new subsection (8)(b) to Clause 159. This appears to have the effect of giving the data protection commissioner exclusive jurisdiction in relation to correction of information relating to individuals—that is to say, objectors other than partnerships or other unincorporated bodies or persons. I contend that such exclusivity runs against the grain of the Bill's intent to strike an adequate and appropriate balance in data protection terms. Perhaps inevitably, I find myself repeating my counsel to the noble and learned Lord that here again is an instance where our interests might best be served if we can return to the matter at Third Reading, particularly bearing in mind the apparent absence of any proper and/or effective consultation with credit reference agencies on these matters.
Lord Teviot: My Lords, at this stage I am grateful to the noble and learned Lord the Solicitor-General for referring to my earlier amendment at Committee stage with regard to the word "communicated" and for having taken the matter further. I fully accept what the noble and learned Lord says.
Viscount Astor: My Lords, I had been going to suggest that my Amendment No. 15 be degrouped from this group of amendments, as it concerns a different subject. However, being a helpful kind of person, I will speak to it now in order to give the Minister a chance to think about how he will respond to my noble friend.
At Committee stage I moved an amendment to delete "trade secret" and insert "intellectual property". The noble and learned Lord the Solicitor-General said:
"that is a very legalistic way of dealing with the issue".—[Official Report, 23/2/98; col. CWH 44.]
I was not entirely sure whether, from a lawyer, that was a compliment or a criticism. However, being a modest person, I took it as a criticism and have therefore come up with a new amendment to insert "or intellectual property" and leave in "trade secret".
I am told, on wise and learned advice, that the law of trade secrets and confidential information is very much a subset of general intellectual property law. As I understand it, the noble and learned Lord said at Committee stage that that was not necessarily the case and that "trade secret" could cover the matter. My advice is that there is a different view, which is shared by industry. I believe there are many who believe that there should be a specific provision allowing information involving intellectual property in addition to trade secrets—if indeed it is additional, which the noble and learned Lord does not yet agree, though I hope he will do so—to be exempt from the data subject's right to be informed of the logic involved in
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certain automated decision-making. As I have indicated, this is consistent with paragraph 41 of the directive, which states that this right,
"must not adversely affect trade secrets or intellectual property".
My amendment is thus taken straight from the directive.
The Minister said that "trade secret" includes intellectual property. I accept that there seems to be a difference of legal advice on this matter. However, I think it would be unwise if we allowed that to be the case. Including my words in the Bill would remove any question about the matter. I therefore hope that the noble and learned Lord will be able to accept my amendment.
Lord Falconer of Thoroton: My Lords, perhaps I may deal first with the points raised by the noble Earl, Lord Northesk, relating to the Consumer Credit Act aspects of the amendments proposed. I believe he was right to point out that these amendments were only put down last Thursday. There has therefore perhaps not been sufficient time for noble Lords to consider them as they would have liked. Many of the points made by the noble Earl merit further consideration.
He is wrong to say that credit reference agencies were not consulted before these proposals were put down; they were. The way forward seems to me to be that the amendments should proceed at this stage but arrangements should be made for the noble Earl and those whom he thinks appropriate to meet with officials from the department of my noble friend Lord Williams of Mostyn so that the matters which he raises, which were well put and have considerable importance, can be properly discussed and the matter returned to at Third Reading if that proves necessary following those discussions. I hope that that deals with the legitimate concerns that the noble Earl raised.
Lord Skelmersdale: My Lords, there is a procedural difficulty here, is there not? This is Report stage; the next stage will be Third Reading, when amendments are prohibited if the matter has been agreed to at a previous stage, which will be the case under the arrangements proposed by the noble and learned Lord. The only way I can see out of this difficulty is that, should the noble and learned Lord advise that amendments are necessary, those amendments would have to be made in another place and return to your Lordships' House as amendments to the Bill as passed here. I do not consider that a very satisfactory arrangement. My noble friend certainly has a point.
4.30 p.m.
Lord Falconer of Thoroton: My Lords, I am advised that it is possible at Third Reading to make amendments even on matters which have been agreed to, so I do not believe that the procedural point to which the noble Lord refers exists. In any event, after discussion with the noble Earl, if there are matters that the Government consider should be amended, we can obviously bring forward amendments. I do not believe that the procedural difficulty is as described and is a reason for not pursuing the eminently sensible course that I have proposed.

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I turn to the amendment of the noble Viscount, Lord Astor. He suggested that it was a new amendment. Obviously so many amendments were tabled in Committee that he forgot this one. In fact, he tabled a similar amendment in Committee.
I listened carefully to his further explanation of why it is necessary to insert a reference to "intellectual property" to sit alongside the reference to "trade secrets". Despite the genuinely persuasive way he put it, I remain firmly of the view that the addition is both unnecessary and inappropriate.
The noble Viscount referred to Recital 41 of the directive, which says that the right to information about the logic involved in automatic processing of personal data,
"must not adversely affect trade secrets or intellectual property and in particular the copyright protecting the software".
Recital 41 is a comment on the third indent of Article 12(a) of the directive. Although Article 12(a) is in general terms, it allows the provision of information about the logic involved in automatic processing to be confined to fully automated decisions of the kind dealt with in Clause 13 of the Bill. Clause 7(l)(d) takes that more limited option. So we are already narrowing right down the scope for the provision of information about the logic underlying automated processing as far as the directive allows us.
I should say in the first place that Recital 41 refers in particular to the "copyright protecting the software." That has no application to the limited right conferred by Clause 7(1)(d). That right is limited to information about the logic involved in decision taking. That does not include details of the software which may be instrumental in the application of the logic to the decision-taking process itself.
In the context of the limited right established by Clause 7(1)(d), Clause 8(5) gives full effect to the purpose of Recital 41. Clause 8(5) limits the right provided by Clause 7(1)(d). Clause 7(1)(d) creates a right to be given information by a data controller. It confers no rights whatever to obtain copies of anything that the data controller has. Nor does it confer any new rights on the data subject to use the information he receives. It simply requires the data controller to produce some description of the factors and weightings involved in the decision taking. It therefore leaves intact the law of copyright and other issues of intellectual property. As Recital 41 says, the right we have created does not adversely affect intellectual property rights per se.
In effect, Clause 7(l)(d) is giving the right to be told the information behind the logic of the decision-taking process. All it gives is a right to information, not to copies of anything, and therefore all that one is concerned about is trade secrets.
The only legitimate concern that data controllers can have about this right is that it could force them to disclose information which is not generally known and which has some commercial or other value by virtue of that fact. That is what we understand to be the essence of a "trade secret" whether or not that information is in copyright form or the subject of other intellectual
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property rights. It is information which needs protection from disclosure. Clause 8(5) gives it that protection from the requirement to disclose in accordance with Clause 7(1).
"Trade secret" is a term with a clear pedigree in statutory use and, as I observed in Grand Committee, in case law. If the House wishes, I can recite a rather long list of statutes in which the term is used. I suspect that that might weary the House. I would, though, just mention Section 39 of the Radioactive Substances Act 1993. That imposes a requirement to give public access to certain documents, except in so far as the disclosure of any such document would involve the disclosure of, for example, a trade secret. The House will see the similarity between that provision and Clause 8(5) in this Bill.
We have had the same anxieties as the noble Viscount, Lord Astor. We carefully considered the matter but, having regard to the fact that the right is only to information and the only danger in relation to that is disclosure of trade secrets, we believe that the route that we have adopted provides adequate protection and that the words, "or intellectual property", which the noble Viscount suggests should be put in, would simply confuse the matter and be inappropriate in the circumstances.
Baroness Nicholson of Winterbourne: My Lords, before the noble and learned Lord concludes his response on Amendment No. 15, will he reassert that the reason for not supporting that amendment is that the intellectual property to which the noble Viscount is inadvertently referring is the software, which is fully protected already by the copyright Act 1988 and its subsequent amendments? Am I correct in that?
Lord Falconer of Thoroton: My Lords, I am grateful to the noble Baroness for that intervention. I am sure that the noble Viscount had that in mind in part, although I suspect that he had concerns about other intellectual property rights apart from copyright.
The noble Baroness, Lady Nicholson, is absolutely right. There is no problem about the copyright of software, for the reasons I indicated, nor about any other legal right apart from trade secrets. That is specifically dealt with in the context of the Act. I am sorry that it was such a lengthy explanation. I hope that it gives the noble Viscount some comfort, in the light of which he will withdraw his amendment.
Lord Campbell of Alloway: My Lords, perhaps I can ask for clarification. Can the Minister say whether there is any other statute of which he is aware, where "intellectual property" is used as a defined term of art?
Lord Falconer of Thoroton: My Lords, I am not aware of such a statute, though there may be one. Perhaps I can make inquiries and write to the noble Lord if I find a statute where that phrase is used.
Lord Campbell of Alloway: My Lords, if the term "intellectual property" were to go on the face of the Bill, it could create a precedent.
Lord Falconer of Thoroton: My Lords, it may well do. I am obliged to the noble Lord for raising the point.
Baroness Nicholson of Winterbourne: My Lords, the noble and learned Lord will be aware that we are bound by our signature to the Berne Convention and to WIPO as well, which I imagine feed into statutory legislation somehow, though I do not know precisely how.
Lord Falconer of Thoroton: My Lords, that is correct. I believe I had concluded my remarks.
Viscount Astor: My Lords, as the noble and learned Lord said and as I remarked earlier, I moved this amendment at Committee stage. I took note of what the noble and learned Lord said then, which is the reason I came back to it. There is an anxiety about what is and what is not a "trade secret" and how intellectual property and copyright fall under it. I shall certainly study carefully what the noble and learned Lord said in his response and consider whether this is an area to which we will need to return on Third Reading.
The Earl of Northesk: My Lords, before the noble and learned Lord sits down and with apologies for returning to the subject of credit reference agencies, perhaps I can say that I am grateful for his generous offer. However, in conceding that I raised one or two legitimate concerns, I am bound to ask whether the amendments to which I spoke, if they are accepted today, are amendable subsequently in a way which will address my concerns. Does the noble and learned Lord have any suggestion as to how, procedurally, he may seek to resolve that difficulty?
The Deputy Speaker (Lord Brougham and Vaux): My Lords, perhaps your Lordships will permit me to put the House in order. We will move on from Amendment No. 9 to Amendment No. 10, at which time the noble and learned Lord will be able to speak again. The Question is that Amendment No. 9 be agreed to. As many as are of that opinion will say "Content"; to the contrary "Not-Content". The Contents have it.
On Question, amendment agreed to.
Clause 7 [Right of access to personal data]:
Lord Falconer of Thoroton Lord Falconer of Thoroton moved Amendment No. 10:
Page 5, line 39, leave out ("supplying") and insert ("communicating").
The noble and learned Lord said: My Lords, I have formally spoken to this amendment. The standing order rules state that,
"The principal purposes of amendments on Third Reading arc to clarify any remaining uncertainties, to improve the drafting and to enable the Government to fulfil undertakings given at earlier stages of the bill. It is undesirable that an issue which has been fully debated and decided upon at a previous stage of a bill should be re-opened by an amendment on Third Reading".
I should have thought that that is more than enough to deal with the procedural difficulties.
Lord Skelmersdale: My Lords, I am grateful for that clarification. Nonetheless, should a Member of your Lordships' House wish to remove part or all of one of the amendments proposed by the noble and learned Lord, he could not do so.
Lord Falconer of Thoroton: My Lords, the relevant words seem to me to be:
"It is undesirable that an issue which has been fully debated and decided upon at a previous stage of a bill should be re-opened by an amendment on Third Reading".
One can simply read this debate and see where we stand in relation to Third Reading. Speaking for myself, I should have thought that, procedurally, there is no bar.
Lord Skelmersdale: My Lords, with the leave of the House, does the noble and learned Lord therefore agree with me that these subjects are not being fully debated now?
Lord Falconer of Thoroton: My Lords, the amendments were tabled on Thursday of last week and the noble Earl, Lord Northesk, has raised certain points that need further discussion. If those cannot be resolved, speaking for myself—though it is not a matter for me, it is a matter for the House—there could then be a proper debate on those issues that have not been fully aired during the course of this debate. At the moment, and speaking from a position of immense lack of experience, it does not seem to me that it gives rise to procedural difficulties, because the detail of what the noble Earl, Lord Northesk, has said has not been fully debated today.
Lord Campbell of Alloway: My Lords, nothing has been decided—I have not been here the whole time but I am interested in this matter—and neither has anything been fully debated. So how, procedurally, is the House put in balk for Third Reading? Nothing has been decided except a sensible meeting to seek to decide.
Lord Falconer of Thoroton: My Lords, I entirely understand what has been said. In formal terms, the amendments will go though at this stage and then we will come back to them at Third Reading, when there can be, as I understand it, such necessary full debate on those matters not fully ventilated at this stage.
On Question, amendment agreed to.
Lord Falconer of Thoroton Lord Falconer of Thoroton moved Amendments Nos. 11 to 14:
Page 5, line 40, leave out ("supplied") and insert ("communicated").
Page 6, line 4, at end insert—
("(6A) An individual making a request under this section to a credit reference agency may specify that his request is limited to personal data consisting of information as to his financial standing.").
Page 6, line 12, at end insert—
(""credit reference agency" has the same meaning as in the Consumer Credit Act 1974;").
Page 6, line 24, leave out from ("has") to end of line 29 and insert ("both the required fee and the information referred to in subsection (3)").
The noble and learned Lord said: My Lords, I have already spoken to these amendments. I beg to move.
On Question, amendments agreed to.
Clause 8 [Provisions supplementary to section 7]:
[Amendment No. 15 not moved.]
Lord Falconer of Thoroton Lord Falconer of Thoroton moved Amendment No. 16:
Page 7, line 24, leave out subsection (8).
The noble and learned Lord said: My Lords, I have already spoken to this amendment. I beg to move.
On Question, amendment agreed to.

Maze Prison
4.42 p.m.
Baroness Farrington of Ribbleton: My Lords, with the leave of the House, I shall now repeat a Statement made by my honourable friend the Minister in another place. The Statement is as follows:
"Madam Speaker, may I say at the outset how much I regret the death of Mr. David Keys in the Maze Prison during the weekend. The Northern Ireland Prison Service owes a duty of care to all prisoners, regardless of what they have done or may have done, and any death in custody is a matter of deep distress to prison staff.
"The circumstances of this case are now the subject of a murder investigation and I must choose my words with care. David Oliver Keys was found dead in his cell in C wing of FI Block 6 at approximately 8.30 a.m. on Sunday 15th March 1998 during the routine morning cell check. The body was found hanging with a ligature around the neck and both wrists slashed. He was pronounced dead at 9.05 a.m. The cause of death seemed to be suicide. The RUC and the coroner's office were notified, and the prisoners were moved out of C wing. During the course of the day the police and a pathologist visited the scene. Both expressed some concern that the cause of death might not be suicide. At 1700 hours the body was removed for a post mortem, the results of which led the RUC to launch a murder inquiry yesterday evening.
"Following his arrest and questioning by the RUC, Mr. Keys was remanded in custody on 11th March 1998 and was committed to Her Majesty's prison Maghaberry. He asked for, and was given, a form to complete seeking a transfer to the wings of HMP Maze occupied by the Loyalist Volunteer Force. This form is intended to ensure that the applicant is quite clear about the faction with which he wishes to be housed and about the nature of the regime which operates in Her Majesty's prison the Maze. Mr. Keys signed and dated this form on 11th March. In accordance with normal practice, the LVF prisoners were asked to confirm that Mr. Keys was acceptable to them. They said he was. No information was available to the prison service which suggested that
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Mr. Keys was in any way at risk from this faction. Accordingly, he transferred to the LVF wings of Her Majesty's prison the Maze on 1lth March.
"The Maze Prison contains more than 400 convicted terrorists and a further 100 or so remanded in custody in connection with scheduled offences. Some 150 prisoners have been convicted of murder or attempted murder. They are segregated according to faction, and two of the five factions have not declared ceasefires. The factions have considerable political and paramilitary influence, and they are supervised by locally recruited staff. Any one of these factors would, by itself, constitute a challenge to security and control. Combined, they present the Northern Ireland Prison Service with a unique set of circumstances not replicated elsewhere.
"Over the past year there have been a series of incidents which have rightly given rise to concern about the effectiveness of the establishment. Each has been made the subject of an inquiry, and substantial improvements in security have been made, under the guidance of a new managerial team.
"The escape and the murder of a prisoner in December 1997 are the subject of both police investigations and an inquiry by Martin Narey of Her Majesty's Prison Service. He is independent of the Northern Ireland Prison Service. I have received his report and it will be made public shortly. In addition, the Secretary of State has asked Her Majesty's Chief Inspector of Prisons, Sir David Ramsbotham, to carry out a full inspection of the prison. This will begin next Monday, and his report will be published.
"In the light of all these investigations, it would not be appropriate for me to say more today about the nature and performance of Her Majesty's prison the Maze. I can assure honourable Members, however, that Ministers will be treating the conclusions and recommendations with the utmost seriousness."
My Lords, that concludes the Statement.
4.48 p.m.
Baroness Seccombe: My Lords, I thank the noble Baroness for repeating the Statement. She will understand, I am sure, the very serious concern that this latest incident has aroused in this House and indeed throughout the country. In the past week we have seen the release of the terrorist, Miss McAliskey, we have seen Sinn Fein allowed back into the peace talks, Gerry Adams entertained in Downing Street after two IRA murders and now we have the murder of Mr. David Keys by fellow prisoners. It was carried out in a way that implies much forward planning and a substantial time in its perpetration, and it follows close on the heels of the shooting of the convicted terrorist, Billy Wright, last December.
After Mr. Wright's murder, the prisons Minister in another place, Mr. Ingram, gave an assurance that security at the Maze would be tightened up and new measures put in place to ensure that such incidents could not happen again. But that does not seem to be the case. I do not expect the noble Baroness to go into the details of security measures at the Maze, but can she inform

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us whether security was tightened up after the Wright murder? Were all the new measures envisaged at the time put into place and were they in operation at the time of Mr. Keys' murder? Can the noble Baroness say when the report will be published?
4.50 p.m.
Lord Holme of Cheltenham: My Lords, I am grateful to the noble Baroness for making the Statement to this House which has been made in another place. I am sure that the House will acknowledge that it is a very serious situation in the Maze Prison. I do not want to cast my net as wide as the noble Baroness, Lady Seccombe, and make it part of a pattern because, generally, the prospects for a peaceful settlement in Northern Ireland are brighter than they have been for a long time.
However, when one looks at the situation in the Maze and the Statement that we have been given, I am sure that the Government will accept that we have now had a series of incidents over the past 10 months which must raise great doubts about the viability of the prison as a whole. We had an attempted IRA mass escape last May; there was the escape of an IRA double murderer dressed as a woman, last December; more recently, there was the murder of Billy Wright of the Loyalist Volunteer Force by the INLA, and now we have the apparent murder of a prisoner in his cell. Each of these incidents is now matched by its own investigation or inquiry. Were it not so serious, I might be inclined to say that at this rate there will be more inquiries about the Maze Prison than prisoners there.
We have got to the point where the Government, in contemplating what to do, have to ask themselves some serious questions about the prison. Perhaps I may ask them. First, the Statement refers to factional segregation. Are the Government satisfied with the underlying arrangements and rules at the Maze Prison which seem to have grown from the point when they were originally instituted by the Conservative government to where factional segregation has become factional control, where the prisoners, within those factions, are effectively guarding themselves? Secondly, when will the outgoing governor, who, I know, is staying on temporarily, be replaced? This is surely the time when there is a need for a new appointment and a firm hand in the Maze Prison.
Finally, I had intended to ask the Government at this point for a fully independent inquiry, but I believe the fact that Sir David Ramsbotham has been asked to look at the prison as a whole will reassure Members of this House, given his very fine, independent record. However, what is his remit? The Statement simply says that he is to carry out a full inspection of the prison. No doubt, that is what inspectors of prisons do. We must now be reassured that his remit is wide enough to include the way in which the system at the Maze Prison operates as a whole. I do not believe that this is the time for excitable calls for resignations because I do not believe that that helps a great deal. But the Government
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must respond, even within the constraints they have set themselves of not commenting, to the gravity of the situation.
4.54 p.m.
Baroness Farrington of Ribbleton: My Lords, I agree with both the noble Baroness and the noble Lord about the seriousness of the situation. Following the events which have been referred to; namely, the escape by Averill and the death of Billy Wright, the Government have imposed additional security measures. Additional security modifications and improvements will be considered in the light of the Narey Report. It is anticipated that it will be published shortly.
The murder of Mr. Keys occurred in the segregated LVF block where no other paramilitary prisoners were located. Therefore, the issue of factional segregation appears to be satisfactory. I shall write to the noble Lord with details as to when it is proposed to replace the current governor at the end of his term of office. The Narey Report is expected soon. I welcome the recognition of the importance of receiving that report and considering it. The Government should take that into account.
Factional segregation is not entirely factional control. The alternative needs to be very carefully considered even given the possible serious consequences for prisoners and prison staff were the segregation system to be ended. We are presently considering the recruitment of a replacement governor, but obviously the exact date is not known. I hope that I have answered the questions raised, but if not, I can assure noble Lords that I shall read Hansard carefully and write to them as a matter of urgency.
The Earl of Longford: My Lords, I want to raise a point of order. Through the Leader of the House I ask the Front Bench speaker on the Conservative side to apologise to Roisin McAliskey for calling her a terrorist.
Lord Richard: My Lords, we all know that this is a House without a Speaker and therefore without anyone who can make a ruling. It therefore follows that no one in the House can rule whether a point of order is or is not a point of order. My noble friend has made his point. I hope that he will be satisfied and leave it there. Perhaps we can then get on with the rest of the questions on the Statement.
4.57 p.m.
Lord Molyneaux of Killead: My Lords, noble Lords will be grateful to the noble Baroness for coming to the House to make this important Statement on behalf of the Northern Ireland Office. For that reason I shall direct my two brief points to the Government in general and not necessarily to the Minister. Are Her Majesty's Government now prepared to recognise that the prison regime in Northern Ireland has deteriorated alarmingly over the past year by reason of what are called "confidence-building measures" but which in reality are concessions to various terrorist organisations to persuade them to do us all the honour of remaining in

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the mis-named "peace process"? Do Her Majesty's Government realise that stability will not return to Northern Ireland until it is clear that government and Parliament are on the side of the law-abiding people of Northern Ireland of all faiths?
Baroness Farrington of Ribbleton: My Lords, the concern expressed by the noble Lord is well known to Her Majesty's Government. We believe that it would be inappropriate to make judgments about the current set of circumstances in HMP Maze prior to the Narey Report and the full inspection which is due to be carried out as a matter of urgency. I believe that we would all agree with the noble Lord that confidence has to be felt across the entire community. Government policy is directed to seek that end.
Lord Burnham: My Lords, in an interview on Radio 4 this morning, the chairman of the Prison Officers Association of Northern Ireland said that he would not ask, and did not expect, his members in the Maze to enforce discipline because of the danger to their lives. Do the Government accept that situation?
Baroness Farrington of Ribbleton: My Lords, I did not hear the interview to which the noble Lord refers. Obviously, it is difficult for me to answer in detail. The Maze is the only prison in the world facing the kinds of difficulties that it does. The prison has to accommodate over 500 dedicated terrorists affiliated to and maintaining active links with five different terrorist organisations. The regime at the Maze has to cope with the attendant security and control problems balanced against the need to maintain a humanitarian regime. That is an extremely complex and difficult task. The regime at the Maze therefore represents and reflects a pragmatic solution to the difficulties of operating the system. It is difficult. Obviously, the regime in the Maze will come under close scrutiny during the inspection.
Lord Blease: My Lords, perhaps I may endeavour to express again to the noble Baroness the sentiments conveyed by the other noble Lord from Northern Ireland, the noble Lord, Lord Molyneaux, who sympathised with the noble Baroness in presenting this problem to the House. It is very difficult for someone who does not live in Northern Ireland to understand the situation. Like other Members of this House who know what is happening there and who experience it day by day and who often have to sit by quietly because of our families and others who live there, perhaps I may say that we can understand the reservations of the noble Baroness at this time. However, does not the noble Baroness agree that recent incidents—not this latest incident, but other such incidents—are among many which call into serious question the whole system of control, management, regime and authority at the Maze Prison? Is there not now a need for an urgent, full, judicial review of the penal system which has given rise to such concern and alarm among peaceable citizens in the Province?
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I can assure the noble Baroness and the House that those Members of this House who live in Northern Ireland understand the full consequences of what happened yesterday morning when they woke up and heard that broadcast. It shook Northern Ireland to the timbers after what has happened recently. I hope that the Narey inquiry and the appointment of the chief inspector will help to explain some of those things but, like others, I feel that a full judicial inquiry is necessary in this instance.
Baroness Farrington of Ribbleton: My Lords, the police are undertaking a full investigation into the deaths which have occurred in HMP Maze. In addition, the Narey report will look into the escape of Mr. Averill. It would not be appropriate to consider a full judicial inquiry at this stage. We await the outcome of the Narey report. We await the outcome of the forthcoming inspection of the Maze. We shall then be able to make judgments. Even if a full judicial inquiry were to be authorised at this stage, it would have to await the outcome of the police inquiry into the murders in order to be able to make a judgment about proceedings. So, it is not an event that could take place quickly. The Government are taking the appropriate steps.
Lord McConnell: My Lords, the situation in the Maze Prison has been scandalous for a considerable time and it is getting worse if people are being murdered while in prison. We have heard a lot about inquiries. What is needed is immediate firm action and no further concessions to terrorists. We cannot afford to sit and wait for various inquiries to report. Undoubtedly we shall take—at least, I hope that the Government will take—considerable notice of them, but in the meantime let us get on with the job and improve security in the Maze Prison.
Baroness Farrington of Ribbleton: My Lords, I thank the noble Lord. I sought to explain—I apologise to the House if I was not clear—that following the escape there was an immediate investigation and measures to improve security against escape are now being put in place. I am sure that we all understand the noble Lord's impatience for action and results, but it is essential that the police are allowed to carry out their full inquiry into the murder. There can be no quicker way of looking at the issues of security and the running of the prison than to await the inquiry and report from Mr. Narey and the inspection by the Chief Inspector of Prisons, Sir David Ramsbotham.
Baroness Park of Monmouth: My Lords, does the noble Baroness agree that however much time may need to be taken—I recognise that there are many problems—in reviewing the situation inside the prison, there seems very little doubt that there is a threat to the lives of the families of the officials and warders who work in the prison? Does the noble Baroness agree that that is fairly generally accepted? Could not something be done at once about that because it leaves everything else open and may be of great reassurance to the officers working there?
Baroness Farrington of Ribbleton: My Lords, I am sure that the concerns expressed by the noble Baroness are well known to the Prison Service and that everything is being done to protect families from the sort of risk to which she refers. If I am made aware later of any further detailed plans, I shall write to the noble Baroness.
Lord Fitt: My Lords, does the noble Baroness agree that the present conditions in the Maze were instituted in 1982 after the hunger strike and that since then there has been a gradual erosion of control in that prison? The noble Baroness said that there had been a deterioration recently and mentioned a number of cases. In 1983, 33 prisoners escaped from the Maze Prison—and that was under the aegis of a Conservative Government, so I do not think that the present Government can be totally blamed for the awful conditions that exist in the Maze at present. As has been said, there is undoubtedly a risk to the lives of the warders and prison officers if any attempt is made to take away the concessions that have been made to those prisoners over the years. One need only reflect on what we saw on our television screens recently when the Secretary of State for Northern Ireland went into the Maze Prison. We saw the most horrific consequences of those concessions.
Yesterday morning, when the announcement of the death of the prisoner was first made, the Catholic population were in absolute fear because they thought that it was a repetition of the Billy Wright murder, but it is now rumoured in Northern Ireland that this victim was murdered by his own colleagues. Can the noble Baroness make representations to bring about an early inquest into this awful death—and it is a tragedy for his family, however one may see it—so that the people of Northern Ireland will know exactly what happened to bring about that death? I ask the Minister—I do not believe that she can give an answer—can any of those concessions that were made by the Conservative Government over a period of 18 years to murderers and thugs (on both sides of the political and religious divide) who are now in the Maze be taken away without endangering the lives of warders, prison officers, police and members of the Army?
Baroness Farrington of Ribbleton: My Lords, I begin by apologising if I gave your Lordships the impression that I had made a judgment about deterioration of the situation in the Maze. I certainly did not intend to do that and would want to make a judgment only on the basis of much greater knowledge following reading the Narey report and the report of Her Majesty's Chief Inspector of Prisons. In terms of the questions which my noble friend asked, at this stage I would prefer not to be drawn into making a judgment about the way in which the prison has been managed in the past and now. I am very much aware that the Secretary of State and her ministerial team must make an extremely difficult judgment in consultation with the professionals about the degree to which outside factors should be taken into account. A degree of judgment must be exercised about the way in which the prison is managed.
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I note the views that have been expressed about the background to the murder of Billy Wright. All I can say is that I shall ensure that the views that have been expressed in your Lordships' House are brought to the attention of my right honourable friend the Secretary of State and my honourable friend the Minister. Prison officers who are at risk are offered protection for their wives, families and homes. My noble friend referred to the fact that 38 prisoners escaped in 1983. I point out that 19 of those were recaptured immediately. In the light of the introduction of humane conditions balanced against control, one is not necessarily talking about concessions but about the very careful management of an extremely difficult situation. I hope that my noble friend accepts that a difficult judgment has had to be made in the past, must be made now and will have to be made in the future.
Baroness Denton of Wakefield: My Lords, I thank the noble Baroness for repeating the Statement made in the other place. I believe that the events in the Maze are likely to lead to incidents of revenge outside. The penalty will be the maiming or, even worse, the killing of the innocent. Therefore, it is absolutely essential that they must stop. Where do the Government believe that responsibility for preventing such incidents should lie? Do Her Majesty's Government agree that there are no political prisoners in Northern Ireland?
Baroness Farrington of Ribbleton: My Lords, where responsibility lies for making a judgment about how to prevent further violent incidents is a very difficult matter. Obviously, the ultimate responsibility for violence lies with those who directly perpetrate it. As to the need to protect those who are most at risk, the noble Baroness, with her distinguished experience as a Minister in Northern Ireland, is only too well aware that that is a task which the security forces seek to carry out at all times. The noble Baroness will also be aware of the Government's view that there are no political prisoners anywhere in the United Kingdom.
Lord Merlyn-Rees: My Lords, will my noble friend ensure that the point raised by my noble friend Lord Fitt and by the noble Baroness, Lady Park of Monmouth, about the position of prison officers is emphasised to the Chief Inspector of Prisons whom I respect? He knows a great deal about prisons in this part of the United Kingdom. There is not the slightest doubt that if a prison officer at the Maze is regarded as stepping out of line his wife and family are at risk outside. That is something which very few people this side of the water understand. In any inquiry what happens in Northern Ireland must be taken into account; otherwise, the investigation will be English, Welsh and Scottish-based and will not be good enough.
Baroness Farrington of Ribbleton: My Lords, I give my noble friend the assurance that I shall do everything to ensure that the concerns that have been raised today in your Lordships' House are passed on to all those involved in inquiring into the circumstances and conditions.

Data Protection Bill [H.L.]
5.15 p.m.
Consideration of amendments on Report resumed.
Clause 9 [Right to prevent processing likely to cause damage or distress]:
Lord Williams of Mostyn Lord Williams of Mostyn moved Amendment No. 17:
Page 7, line 36, after second ("controller") insert ("at the end of such period as is reasonable in the circumstances").
The noble Lord said: My Lords, I beg to move Amendment No. 17. Amendments Nos. 17, 18, 22 and 23 are grouped with Amendments Nos. 24 to 28 and 72.
I refer first to Amendments Nos. 17, 18, 22 and 23. At the moment Clauses 9 and 10 provide for data subjects to be able to give data controllers written notice requiring them to cease within a reasonable time or not to begin certain processing activities. The idea of "within a reasonable time" is simple enough. There should be a reasonable margin of time for the controller to put his affairs in order as soon as necessary to comply with the notice. It would be unreasonable in every case to expect him to respond instantly. As drafted, however, these clauses give that measure of latitude only in respect of the requirement to cease processing. There is no such qualification in respect of requirements not to begin. Having thought about it, we believe that that is not right.
If a data controller's plans to begin processing are very far advanced it may be very onerous to expect him to bring those plans to an instant halt in every case where he receives a notice of objection. These amendments in effect introduce a requirement for reasonable notice in such circumstances. The amendments, however, do not say that it will never be right to expect a data controller to bring his plans to an instant halt. In some cases it may well be reasonable to expect a data controller not to begin at very short notice, but not always. Much will depend on individual circumstances. These amendments are designed to introduce the necessary flexibility.
Amendment No. 19 in this group is in the name of the noble Lord, Lord Norton, and therefore I pass over it. I turn to Amendment No. 20. This amendment amends an amendment that we made in Committee. We have re-scrutinised it with some care. We did not get it quite right technically, for which I apologise. Subsection (1)(a) of Clause 9 starts at the wrong place so that subsection (1)(b) does not read intelligibly. This amendment is designed to sort that out. Amendments Nos. 21 and 24 are further government amendments and are designed to address points made by the noble Lord, Lord Norton, in Committee. He pointed out that in Clauses 9 and 10 there was no requirement for the data controller to respond to a written notice from an individual objecting to processing. Without such a response the individual would have no means of knowing whether his objection had been successful or, if unsuccessful, why it had been rejected. A requirement to respond in writing to a notice of objection would provide a link between the data controller and the data
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subject and hence the opportunity for dialogue before the data subject needed to consider involving the commissioner or referring the matter to the courts.
I explained in Committee that a written reply to a notice under Clause 9 or 10 is not essential to ensure compliance with the notice, in contrast to subject access requests made under Clause 7 where the only satisfactory way to comply is to reply in writing. I stressed nonetheless that I saw some force in the noble Lord's points and undertook to consider them further. We have indeed given further thought to the matter and have concluded that amendments in this regard would be helpful. I understand that they would also be welcomed by the registrar.
The amendments would oblige data controllers to respond in writing within 21 days to written notices from individuals seeking to prevent or stop processing likely to cause substantial damage or distress to themselves or others; or the processing of their data for direct marketing purposes. In the first of these instances, Clause 9 cases, controllers would either have to confirm that they had complied or intended to comply with the notice of objection or explain why they thought it unjustified and say to what extent, if any, they had complied or intended to comply with it. In the second instance, Clause 10 cases, where the issue is more straightforward, controllers would simply be required to explain how they had complied or intended to comply. A data subject receiving such a written response would thereby know in a straightforward way whether his request had been complied with and, if it had not, whether there was any basis for further dialogue before involving the commissioner or resorting to litigation.
Amendments Nos. 25 to 28 and 72 are also within this extensive list of amendments. At the moment, Clause 13 imposes a general prohibition on certain forms of automated decision taking which significantly affects data subjects. There are exceptions to the prohibition. But the practice is effectively otherwise banned. It has been put to us that this in fact goes further than the directive actually requires. We think on reflection that that is right. The directive is not expressed in terms of a ban but in terms of giving everyone the right not to be subject to these decisions, which is not the same. We do not wish to impose more restrictions on data controllers than are necessary to safeguard the rights required by the directive, so the amendments remove the ban and confer rights instead.
The difference in practice is that with a ban, no one can take these decisions—except in the exempted circumstances—without running the gauntlet of the entire regulatory mechanism which the Bill sets up. That is too heavy handed. We are therefore giving a right of objection. So, until someone objects, the matter is essentially one for the judgment of the data controller. This is therefore very much on the model of the right to object to direct marketing, set out in Clause 10. We have taken care to ensure that the new right to object properly safeguards the individual's position.
First, there is a general right by notice to require any data controller to refrain from taking these decisions, enforceable by the commissioner or through the courts.
Secondly, data controllers are required to inform data subjects who have not given such notice that a decision has been taken solely by automatic processing. The data subject can then exercise his right to serve a notice within 21 days on the data controller to have the decision reconsidered or taken on a different basis. The data controller must then respond within 21 days to that notice by giving the data subject details of how he intends to comply with the notice.
This revised clause aligns the right not to be subject to automated decision taking more closely with the directive and with the two other key rights in Clauses 9 and 10. I commend these amendments to your Lordships. I beg to move.
On Question, amendment agreed to.
Lord Williams of Mostyn Lord Williams of Mostyn moved Amendment No. 18:
Page 7, line 37, leave out ("within a reasonable time").
On Question, amendment agreed to.
The Deputy Speaker: My Lords, I advise the House that if Amendment No. 19 is agreed to, I cannot call Amendment No. 20.
Lord Norton Lord Norton moved Amendment No. 19:
Page 7, line 39, leave out from ("subject") to ("would") in line 44 and insert ("where there are compelling legitimate grounds for believing that the processing of those data or their processing for that purpose or in that manner").
The noble Lord said: My Lords, the amendment relates to Clause 9:
"Right to prevent processing likely to cause damage or distress".
The amendment seeks to replace the words "substantial damage" and "substantial distress" with the words appearing in Article 14 of the directive: "compelling legitimate grounds".
As the clause is drafted, the information which is being processed legally may not be processed if it is likely to cause the data subject substantial damage or substantial distress, together with a further test that the damage is unwarranted. Presumably, if the data controller dislikes the data subject and acknowledges that substantial damage or distress is going to be caused, but considers that the processing is warranted, then the data processing is permissible. After all, the criteria are all subjective judgments.
I have been informed by officials at the Home Office that there is no hidden agenda behind the wording of the clause and that the words "substantial damage" and "substantial distress" are their interpretation of the meaning of "compelling legitimate grounds".
I disagree, which is why I have tabled the amendment. I should be grateful to hear the Minister's reasons as to why the damage should be unwarranted. A further complication appears to present itself in that the data subject appears to have no rights to object to data processing, whether or not it causes damage, once the data subject has given consent under paragraph 1 of Schedule 2. That is contained in subsection (2)(a) of the
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clause. That seems to be a little harsh. I should he grateful to hear the Minister's explanation for that point. I beg to move.
The Earl of Northesk: My Lords, I apologise. I missed the opportunity to speak to Amendment No. 17 when the Minister spoke to the whole group of amendments. I shall intervene here and speak to my concerns relating to Amendments Nos. 24 and 25.
Amendment No. 24 mirrors the requirement that we shall presumably pass in Clause 9 that the data controller should have a duty to advise data subjects of those steps being taken to ensure that the processing of their data has ceased or will not even begin.
Of course, Clause 9 seeks to prevent processing that is unwarranted, as causing or being likely to cause substantial damage or substantial distress. For such data the additional protection of the data subject being advised of how the data controller intends to prevent processing is eminently sensible. There is nothing wrong with that. I am less certain that that is an appropriate approach to Clause 10, which relates to direct marketing.
As the Minister will be aware, a widely used practice in the direct marketing industry is that of offering the customer the opportunity of indicating his wish not to have his data further processed by means of an opt-out tick box. That methodology has distinct advantages. It is simple, concise and clear to both the customer and the business concerned. At issue here is whether it is intended that such tick boxes should be interpreted as being data subject notices. Legal advice obtained by the British Retail Consortium indicates that they should be. If that is the case, it will have the inevitable effect of adding considerably to the administrative costs of, for instance, the mail order catalogue industry.
The isolation of negative option ticks from the volume of orders processed within the specified time frame of 21 days would involve extensive extra work and cost. Moreover, on the basis that that system has operated well enough to date, it is highly unlikely that any real benefit would accrue to the data subject in those circumstances. In fact, he could be severely inconvenienced in the event that, on strict interpretation, he may be required to send any written objection to further processing separately from his having ticked the opt-out box.
In effect, the amendment's application to that practice will do little to enhance consumer protection or human rights. It may even work actively against them. I hope that the Minister will be able to tell me that, as with the slightly related amendment in Grand Committee, I am worrying unnecessarily although, as I have said, the BRC's legal advice is that I am not.
That said, if my interpretation is correct, it strikes me that Amendment No. 24, notwithstanding the Bill's avowed intent to strike an appropriate balance, will work disproportionately against the direct marketing industry. It may be worth adding that, on my interpretation, that industry would, in any event, be subject to the similar provision in Clause 9, albeit only

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in severe cases, and that that could he interpreted as being adequate to afford data subjects the protection intended by the amendment.
On that basis, I wonder whether Amendment No. 24 is strictly necessary, especially bearing in mind that the directive gives no indication that the procedure arising from it is required. Inevitably, I return to my refrain. It seems to me that this is another instance of a substantive matter, not widely trailed, which will alter the balance on the face of the Bill.
I move to Amendment No. 25. Clause 13 as it stands complies with the directive. On my interpretation, Amendment No. 25 will widen the effects of the Bill into areas not effectively allowed for in the directive. As I understand it, Amendment No. 25 envisages that an individual, writing in advance to a series of companies with which he does not necessarily have any contract, would be entitled to assert his right to ensure that the data controller in question would make no decisions about him based solely on the processing of his personal data by automated means.
On the surface, that seems to be a case of creating work when no work is necessary. I am bound to ask what purpose such a procedure is intended to serve. How often do the Government envisage that data subjects will exercise their rights in that regard? So far as concerns data controllers, it will mean inevitably that they will have to introduce systems and train personnel to accommodate such requests from data subjects, even though they may not have had any dealings with them.
Experience has shown that training staff to perform functions that are seldom put to use, or serve no useful apparent purpose, is not only wasted but debilitating to the morale of the staff concerned. What is important is that it has the adverse effect of diluting the effectiveness of training. On a more general level, it could be interpreted as having the effect of imposing unnecessary burdens upon business rather than retaining the proportionate balance that the Bill is intended to serve. I question whether that is the Government's intention.
I return to my refrain, although I suspect that it is unlikely to be heeded, that, surely, this is another occasion when further reflection between now and Third Reading would be desirable.
5.30 p.m.
Lord Skelmersdale: My Lords, I welcome Amendment No. 24 because it gives me an opportunity to make three points. First, I thank the Minister for fulfilling his promise in Grand Committee to write to me about direct advertising by the tobacco trade.
Secondly, over many years, and most recently in a joint EC sub-committee and the Statutory Instruments Joint Committee on which I had the honour to serve, I have been interested in the processes by which European law is translated into British law. Indeed, on occasions I have identified the temptation, to put it mildly, of officials, in the deliberations between Brussels and Parliament, to add little twiddles to miscellaneous European legislation. It occurs to me that this might be one such case and if so it is perhaps desirable.
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The Liberal Democrat Benches gave an example of "gold plating", as it is known, receiving public approval and the Minister accepted an amendment in principle on that basis. It is pertinent to the operation of the directive in this country, with our particular and peculiar circumstances. However, it is not acceptable when the "gold plating" is hidden and I believe that this might well be such a case.
Amendment No. 24 defines a data subject notice. References to all other definitions in the Bill are found under Clause 62. Therefore, I believe that reference to the notice could, with some degree of use and therefore clarity to those reading the Bill, be included in Clause 62. I hope that the Minister will consider that.
Lord Williams of Mostyn: My Lords, I certainly can and if it is an appropriate course to take we will take it. I shall take advice on the matter.
I am grateful for the welcome given in part by the noble Lord, Lord Skelmersdale, and for the comments made by other noble Lords. Specific questions have been raised; for instance, whether under Clause 9(2)(a) any consent given under paragraph 1 of Schedule 2 is not capable of being withdrawn? Any consent given in any part of the Bill may be withdrawn at any time and there is nothing to prevent that.
The noble Earl, Lord Northesk, asked about the problem of the tick box. We believe that a tick box is capable of being a written notice for the purposes of Clause 10(1). The noble Earl indicated that there had been discussions with various trade organisations and officials. We remain of the view that if further discussions are thought to be appropriate officials are always ready to consider improvements. I stress that these are difficult technical areas and we welcome informed criticism and scrutiny. I hope that we have demonstrated that throughout the passage of the Bill.
As regards the amendment tabled by the noble Lord, Lord Norton, the directive uses the words "compelling legitimate grounds relating to his particular situation". In our judgment, that is not satisfactory statutory language. I take the point that if at all possible one ought not to twiddle. Perhaps one ought to try to use the spirit and language of the directive and translate it into what is apt for our particular legislative and constructive tradition. We do not believe that the phrase "compelling legitimate grounds relating to his particular situation" is satisfactory in terms of statutory language. It does not mean much, except that the data subject must make a strong case.
We do not see that the courts will be able to give a reliable interpretation of that. How is the data controller, going about his lawful business, to know when he must yield to the interests of a data subject? We believe that this is one of the instances, referred to earlier, where there is a need to bring the words of the directive into sharper focus in order to obtain clarity and consistency. We have taken the view that for a data subject to make out compelling legitimate grounds he must make a case that the processing would damage him or someone else in some way; physically, in monetary terms or by way of distress. Because the presumption is that the data

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controller must be able to go about his lawful business, we have said that to be a compelling case the harm must be substantial and unwarranted.
That is a high threshold and is intended to be such. The directive indicates that. I do not wish to sound brutal, but some loss and distress are the small change, the regular consequences, of competition. One man's success in business may be his competitor's disappointment. That is not what the legislation is supposed to be about. We need to define matters with care and we believe that the literal words of the directive will not do. The directive's job, in Article 14, is to state terms of policy. The Bill's job is to work that policy carefully into the existing framework of enforceable rights and freedoms laid down elsewhere in the directive. It is not simple, but we believe that we have got it about right, giving effect to the intentions of the directive, in essential guidance on which everyone involved can confidently rely.
Finally, we must come to a judgment about where we draw the balance. I hope that your Lordships will believe that we have done so properly. Perhaps I may refer again to the issue of objection which was raised in a more general context by the noble Earl, Lord Northesk, as opposed to his specific question about tick boxes. We are trying to safeguard the interests of business. Instead of expecting someone in business, running any form of organisation, to have to run the gauntlet of the entire regulatory mechanism which the Bill sets up, we say that until someone objects it is a matter for the judgment of the data controller.
I take the noble Earl's point that one might be setting up systems and having employees trained for the rather and task of doing nothing—quite unlike any experience on the Front Bench in your Lordships' House! We have taken the model which most people believe is capable of working sensibly and reasonably in practice; the right to object to direct marketing as set out in Clause 10. It is true that one might have the extreme circumstance of the excessive individual who will write objecting to companies which have no sensible connection with his or her activities. However, we believe that that will be most unusual. Most people exercise their rights sensibly and we must construct a legislative framework which will deal with that.
I hope that with those comments I have satisfied your Lordships of the merits of the Government's amendment and I ask the noble Lord, Lord Norton, to withdraw his.
Lord Norton: My Lords, I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
Lord Williams of Mostyn Lord Williams of Mostyn moved Amendments Nos. 20 and 21:
Page 7, line 39, leave out from ("reasons") to first ("is") in line 42 and insert—
("(a) the processing of those data or their processing for that purpose or in that manner").
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Page 8, line 2, at end insert—
("(2A) The data controller must within 21 days of receiving a notice under subsection (1) ("the data subject notice") give the individual who gave it a written notice—

(a) stating that he has complied or intends to comply with the data subject notice, or

(b) stating his reasons for regarding the data subject notice as to any extent unjustified and the extent (if any) to which he has complied or intends to comply with it.").

The noble Lord said: My Lords, I have already spoken to Amendments Nos. 20 to 28. I beg to move.
On Question, amendments agreed to.
Clause 10 [Right to prevent processing for purposes of direct marketing]:
Lord Williams of Mostyn Lord Williams of Mostyn moved Amendments Nos. 22 to 24:
Page 8, line 13, after second ("controller") insert ("at the end of such period as is reasonable in the circumstances").
Page 8, line 13, leave out ("within a reasonable time").
Page 8, line 15, at end insert—
("(1A) The data controller must within 21 days of receiving a notice under subsection (1) ("the data subject notice") give the individual who gave it a written notice specifying the steps that he has taken or intends to take to comply with the data subject notice.").
On Question, amendments agreed to.
Clause 13 [Automated decision-making]:
Lord Williams of Mostyn Lord Williams of Mostyn moved Amendments Nos. 25 to 28:
Page 9, line 28, leave out subsection (1) and insert—
("(1) An individual is entitled at any time, by notice in writing to any data controller, to require the data controller to ensure that no decision taken by or on behalf of the data controller which significantly affects that individual is based solely on the processing by automatic means of personal data in respect of which that individual is the data subject for the purpose of evaluating matters relating to him such as, for example, his performance at work, his creditworthiness, his reliability or his conduct.
(1A) Where, in a case where no notice under subsection (1) has effect, a decision which significantly affects an individual is based solely on such processing as is mentioned in subsection (1)—

(a) the data controller must as soon as reasonably practicable notify the individual that the decision was taken on that basis, and

(b)) the individual is entitled, within 21 days of receiving that notification from the data controller, by notice in writing to require the data controller to reconsider the decision or to take a new decision otherwise than on that basis.

(1B) The data controller must, within 21 days of receiving a notice under subsection (1) or (1 A)(b) ("the data subject notice") give the individual a written notice specifying the steps that he intends to take to comply with the data subject notice.").
Page 9, line 33, leave out subsection (2) and insert—
("(2) A notice under subsection (1) does not have effect in relation to an exempt decision: and nothing in subsection (1A) applies to an exempt decision.
(2A) In subsection (2) "exempt decision" means any decision—

(a) in respect of which the condition in subsection (3) and the condition in subsection (4) are met, or

(b) which is made in such other circumstances as may be prescribed by the Secretary of State by order.").

Page 10, line 1, leave out subsection (5).
Page 10, line 5, after ("(1)") insert ("or (1 A)(b)").
On Question, amendments agreed to.
Clause 28 [Crime and taxation]:
The Deputy Speaker (Lord Dean of Harptree): My Lords, if this amendment is agreed to, I cannot call Amendment No. 30.
Baroness Nicholson of Winterbourne Baroness Nicholson of Winterbourne moved Amendment No. 29:
Page 17, line 33, leave out subsection (4).
The noble Baroness said: My Lords, Amendment No. 29 seems appropriately draconian in that I have the support of the noble Viscount, Lord Astor, whose tenacity in this matter I now welcome, and I am most grateful to him for his support.
I remind noble Lords why we believe this amendment should be properly assessed. While the current Act of 1984 provides what has seemed to be an acceptable balance between providing proper respect for personal information and the needs of law enforcement and tax collection officials, Clause 28 of this Bill includes provisions which largely replicate those in the 1984 Act but with one additional subsection; namely, Clause 28(4).
I raised my concerns about that subsection in Committee and the Minister was kind enough to reassure me with a government amendment. That amendment deletes the exemption with regard to the first principle, and I warmly welcome that. But I am sorry to see, on careful examination, that it leaves intact the exemption with regard to subject access and disclosure. Therefore, in my view and that of noble Lords on this side of the House, this amendment fails to address satisfactorily the point of principle that, lacking evidence to the contrary, the exemption cannot be justified; in other words, the government amendment fails to deal with the fundamental problem with Clause 28(4) that the blanket exemption is disproportionate.
In order to justify Clause 28(4) there needs to be clear evidence that the absence of the clause would have an adverse effect on important government functions. Those functions which are not enlarged upon in the government amendment must be a department such as the Inland Revenue.
Therefore, I have moved on from the draconian amendment and have suggested in Amendment No. 30 that if we cannot persuade the Government to delete Clause 28(4) entirely, which would be wonderful, we should assist the Government by asking that clear evidence of the necessity of Clause 28(4) is given to us by a specific amendment or deletion followed by a new clause.
Noble Lords will see that Amendment No. 30 refers specifically to the collection of taxes, duties and similar impositions. In other words, Clause 28(1)(c) has been strengthened and enlarged upon. This amendment is a probing amendment and I ask the Government to take it away and examine it. If they are able to do so and will discuss the matter with me outside the Chamber in order to put forward something more appropriate in terms of wording for Third Reading, they would be able to quote Gilbert and Sullivan satisfactorily and suggest that Clause 28(4) "never will be missed".
It is too large a power to give to a modern government. It may be that in the old days of paper records my arguments on Clause 28(4) would not carry the weight which I believe they now carry. But in the days of information technology when powers can be summoned and used so swiftly in terms of access to information and personal data, I believe that Clause 28(4) as it stands is inappropriate and that something more modest, along the lines of my probing amendment, would be more suitable.
The amendment is supported by the noble Viscount, Lord Astor. Therefore, this side of the House is showing its concerns to the Government and asking them to reconsider. I know that the Government have thought carefully about it and that time is short. But I am confident that if we meet to discuss the matter, which is what I request the Minister to do, an answer could be found. I beg to move.
Viscount Astor: My Lords, I put my name alongside that of the noble Baroness to the amendment moved in Committee and I have done so again because I am concerned about the powers. In doing so, I realise that the amendment probably goes too far and a middle way should be found. Amendment No. 30 offers an interesting way forward. Therefore, I look forward to hearing the Minister's response.
5.45 p.m.
Lord Falconer of Thoroton: My Lords, we agreed during Committee stage that Clause 28 is an important part of the Bill, going directly to the balance which has to be struck between individuals' rights in respect of processing of personal data and the need in some circumstances to limit those rights in the general public interest.
The noble Baroness, supported by the noble Viscount, previously moved the first amendment during the Committee stage of the Bill. Subsection (4) allows the Secretary of State, by order subject to affirmative resolution, to specify categories of information for exemption which are generally relevant to tackling crime, apprehending offenders or assessing taxes but which may not prove relevant in every individual case. To the extent that Parliament itself approved—there would have to be a debate on the matter—a selective exemption could be made for particular categories of data. The exemption could only be for crime, offenders or taxation purposes, and as the clause now stands it could only apply to the information to data subjects provision in Schedule 1 of Part II, to the subject access provision in Clause 7 or to the non-disclosure provisions built into the principles of Schedule 1.
As the noble Baroness pointed out, the scope of subsection (4) has already been reduced by government amendment in Committee. We removed the reference to the first data protection principle—fairness and lawfulness. This was in response to general concern about the breadth of the provision, and fully met the specific concern about fairness and lawfulness expressed by the House of Lords' Delegated Powers and Deregulation Committee.

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As was said in Committee, the immediate reason for including the non-disclosure exemption was to enable people to pass information to the Inland Revenue in the public interest. I do not detect any dissent from the validity of that particular exemption. The subsection (4) power takes account of the benefits of outsiders assisting the Inland Revenue's enforcement activities, without subjecting them to a test of case-by-case justification which would be completely destructive in these particular circumstances.
As to the subject information exemption, the Inland Revenue's recently introduced self-assessment system uses a range of indicators to identify individual tax returns which justify further inquiries. Subsection (4) will allow an exemption to be made for withholding this critical risk assessment information from data subjects. If it was not withheld, tax experts, if not the individuals concerned, could soon start to compare cases and deduce the revenue's criteria for further inquiry.
Together the exemptions would not only help compliance with the law but also save honest taxpayers many millions of pounds. So for the Inland Revenue, if for no other purpose, we need Clause 28(4). The complete abolition of Clause 28(4), which the noble Baroness and the noble Viscount both propose in their first amendment, does not seem a practical or sensible alternative.
I turn to the second amendment. This would retain but amend subsection (4), first, by applying it only to processing for the purposes of subsection (1)(c) —namely, the assessment or collection of taxes, duties and similar impositions—and, secondly, by replacing the order-making power with specification on the face of the Bill of the types of data to which the exemption applies. There are plainly benefits to that approach. It limits the exemption to an area of processing for which a clear need has already been identified. It would remove the concern expressed in debate about further orders, as yet unknown, coming forward in due course.
We appreciate those concerns. Indeed, we have no more desire than the noble Baroness to allow hole-in-the-corner restrictions on rights that individuals would otherwise enjoy under the Bill. But there are a number of considerations upon which I believe the noble Baroness should reflect in relation to the proposal that she makes.
First, we—and in that I include not just the Government but also Parliament—would lose the flexibility to deal with new developments. At present, I should make it clear that the Government have no other particular purposes in mind for subsection (4) than tax collection. However, circumstances change both within public administration and in the community. The Inland Revenue provision is needed now because the world has changed—more and more data controllers now use computers and the Inland Revenue has introduced a new self-assessment system. It is, in a sense, fortunate that the timing of this Bill gives us the opportunity to consider the merits of an exemption for those particular purposes.
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However, once enacted, this Data Protection Bill is likely to need to serve us for a decade or more. The original 1984 Act has had to serve for 14 years, and the House will recognise that we cannot—nor would we want to—put through an amendment to primary legislation on data protection in every parliamentary Session. It is quite possible that changing practices and needs might lead to similar cases being put forward by other departments with an interest in crime or offenders as well as taxation. We do not know at this stage, but the world changes and we need some flexibility to respond when it does.
Secondly—and this is a key point—by using the order procedure we can protect the interests of individuals as data subjects by targeting our exemptions much more precisely on the particular circumstances with which they are intended to deal. That should give reassurance to the House. We do not want to be tempted to cast the exemption wider than we have to now just because there might be a shift in circumstances in, say, three years' time. The order-making procedure gives greater flexibility to tailor and re-tailor provisions and thus reduces any temptation to over-exempt in the first instance, which is what Amendment No. 30 would be in danger of doing. I say that because it relates to taxation as a whole and would, therefore, be much less well focused than the approach in the present clause, which does not give an exemption in relation to taxation as a whole but would only give it to the extent allowed by the order that is actually made.
Thirdly, as I have made clear, we are not in any case contemplating future decisions behind closed doors by civil servants or, indeed, Ministers. The requirement to submit any proposed exemption through the affirmative resolution procedure means that there must be a parliamentary debate about the merits of the case; and that no exemption can take effect unless Parliament approves it. I think that that is a considerable safeguard. Proposing the procedure was an instance of the Government's good faith in the matter. It will, in practice, serve as a protection against any unwise decisions by the Executive on a matter which might affect individuals' rights. We shall, of course, consider all the matters raised this afternoon; but, in the light of the reasons that I have set out and the assurances that I have given, I hope that the noble Baroness will feel able to withdraw her amendment.
Baroness Nicholson of Winterbourne: My Lords, I am most grateful to the noble and learned Lord for his clear exposition. I shall, of course, consider everything that he said when I have the opportunity to read Hansard. I accept the noble and learned Lord's point about Amendment No. 29 in relation to Clause 28(4) as being a very tough one. We shall no doubt reconsider the matter next week, but I remind the noble and learned Lord that Clause 28(4) is a novelty; indeed, it did not form part of the 1984 Act. I do not believe that that Act has been deficient with regard to the draconian powers that this subsection gives to government. Nonetheless, I accept the noble and learned Lord's point about Amendment No. 29 and I shall withdraw it.

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However, I seek a meeting with the noble and learned Lord about Amendment No. 30 which, as he so rightly said, relates to an amendment to Clause 28(4). The noble and learned Lord argued that new developments may arise and that circumstances change. I should remind him that, if we are too prescriptive, we may fall into the trap that the French Government fell into in 1986 when they put forward such a fine-tuned computer hacking Bill that they have not been able to use it since, despite many incidents of computer hacking. That was because their definition of the computer—cerveau électronique--was so precise that it proved to be unusable the day after the legislation had been passed.
I understand precisely the point that the noble and learned Lord made, but he went on to buttress his argument by suggesting that this legislation would have a decade unchallenged and that it would have to be perfect throughout that time. I suggest to him that that will not be the case. We already know of a raft of EU directives which, one way or another, will impinge upon personal data protection. Indeed, the database legislation which the noble Lord, Lord Haskel, and I debated just before Christmas in a short space of time impacts upon this very Bill. I hesitate to speak for the noble Lord, but I believe that he may have shared my surprise when the Chamber emptied rapidly as he and I began to debate that legislation. People just do not understand the importance of this sort of legislation. Beyond this Bill a raft of possible EU directives looms, not least because, as I understand it, there will be an EU data protection registrar working with all the registrars from EU member states.
In that context, I draw the attention of the noble and learned Lord to the, as yet, undebated Schengen information agreement. That is a dramatic development, which I believe will also impact upon this legislation. Therefore, I believe that this sovereign nation—island though we may be, and despite our background of relatively fragile involvement with the EU over the past two decades—will be far more fully involved in such matters in the years to come. Indeed, I hope that we will be, because Britain has so much to offer in terms of professional knowledge and best practice to our EU partners.
In conclusion, I challenge the noble and learned Lord's argument on the implacability of this legislation, once it has been passed, in terms of other legislation not reflecting upon it. I believe that it will need to be re-examined by this House on a regular basis because of outside forces such as directives. There will be a registrar, the Schengen information agreement is already in place and there are more EU directives on the way. However perfect we make the Bill I suggest that, like the 1988 copyright Act, it will still be subject to incoming EU material which, under the new Government, I hope we will be in a position to influence rather than merely react to. That will be exciting. I ask the noble and learned Lord again for a meeting on the matter. In the meantime, I shall not press the amendment and beg leave to withdraw it.
Amendment, by leave, withdrawn.
[Amendment No. 30 not moved.]
6 p.m.
Lord Norton Lord Norton moved Amendment No. 31:
Page 17, line 37, at end insert—
("(5) The Secretary of State may by order provide that a person specified in the order may assess any processing of personal data exempted from any provision of this Act by virtue of this section, under such conditions as may be specified in the order.").
The noble Lord said: My Lords, Amendment No. 31 relates to Clause 28. I shall not repeat the arguments that I made in Committee save to add that it would appear that most countries which have data protection legislation also have audit powers included in the legislation.
The representation that the Solicitor-General made at Committee stage of unnecessary intrusion by data protection authorities interfering in business in an irresponsible way is not a valid criticism to justify the non-use of audit powers. There are many examples in UK legislation where regulatory bodies have statutory powers of entry and inspection without consent. In some cases their powers go much further than anything suggested in the Committee stage amendments. I refer to powers contained in the National Audit Act 1983, the Audit Commission Bill, the Value Added Tax Act 1994, the Health and Safety at Work etc. Act 1974 and the Sea Fisheries Act 1968.
Further to the remarks of the Solicitor-General, a power to walk unannounced into premises and demand access to the data processing under way is unlikely ever to be needed by the commissioner. The nature of data processing is such that by asking the right questions and examining files the commissioner can usually determine whether good practice is not being followed through ignorance or default.
My amendment seeks to introduce audit powers for the specific use of Clause 28, which is a powerful clause, especially when compared with Clause 41—the information notice clause—which is at present weak. The auditors would not necessarily be from the data protection commissioner's office as that body may not have the necessary resources available. The audit bodies would be appointed by the Secretary of State. On grounds of democratic accountability alone there should be an external independent body to supervise compliance on a regular basis. I beg to move.
Viscount Astor: My Lords, my Amendment No. 49 is grouped with this amendment. That is an amendment that I moved at the Committee stage. It concerns the commissioner giving reasons. The noble Lord, Lord Williams, said at Committee stage that he accepted that my amendment applied only to the extent that the commissioner considers appropriate. However, he then added that it would not always be appropriate for her to explain her views. Of course if it is not always appropriate, she may consider that it is not appropriate. If I may say so, I felt that the noble Lord slightly contradicted himself. We want openness in this matter. I believe my amendment encourages that.
I believe that I may be speaking to the wrong amendment. I apologise to your Lordships. I should be talking about informal approaches.

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I believe that the commissioner ought to make an informal approach before issuing information notices. In Committee the noble Lord said that, by and large, this happens but that it was not obligatory. I considered carefully the noble Lord's argument. However, I am sure he is aware that the Bank of England is required by the Banking Act 1987 to make such an approach when it is considering revoking a licence. Therefore there is a precedent for my amendment. In the light of that discovery I hope that the Minister will reconsider the issue.
Lord Falconer of Thoroton: My Lords, this group of amendments comprises Amendments Nos. 31, 49, 50, 64 and 75. The amendments concern the powers of the commissioner to ensure that processing is being undertaken in accordance with the provisions of the Bill. We are very much aware, particularly from the views expressed in Committee, that it is important that we should get these powers right and that they should be sufficient but proportionate.
I shall discuss not only the amendment of the noble Lord, Lord Norton, and that of the noble Viscount, Lord Astor, but also the amendment in this group that has not yet been moved by the noble Baroness, Lady Nicholson, and also the Government's Amendment No. 50. As your Lordships will be aware, the commissioner is being provided with some significant new powers in the Bill: to serve information notices and to undertake assessments of good practice, but only with the data controller's consent. It must inevitably be a question of judgment as to whether those powers are sufficient and proportionate. On the one hand, the noble Viscount, Lord Astor, suggests with his amendment that the commissioner's powers are too peremptory; he suggests that she should have to try more informal methods before being permitted to issue an information notice. On the other hand, the noble Lord, Lord Norton, and the noble Baroness press the case for significantly more assertive powers. Clearly a balance must be struck. The commissioner needs effective tools for the job but data controllers need to be able to go about their legitimate business unhindered. These are both important considerations and we have thought about them carefully.
The amendment we propose to Clause 41 would remove the prohibition on the commissioner from making an application for a warrant while an appeal is being brought against an information notice. In bringing forward this amendment we have listened carefully to the case which the registrar has made that it would be unhelpful to fetter her access to the courts to request a warrant as the Bill does at present. We have found that case persuasive. If a circuit judge is persuaded of all the matters set out in Schedule 8, which provides important safeguards against inappropriate use, we agree that an outstanding appeal against an information notice should not be an obstacle to the commissioner's taking action. We are weighing the balance in the commissioner's favour on that issue.
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We have framed the commissioner's powers cautiously. We do not think it appropriate to seek to limit the commissioner's powers further and so we cannot accept the noble Viscount's amendment requiring the commissioner before serving an information notice to seek to resolve matters informally. As was emphasised to the Grand Committee, the commissioner must by law exercise her powers reasonably and for the purpose provided. She is not at liberty to exercise the power to issue an information notice unnecessarily or oppressively. I have every expectation that the commissioner will continue her present respected practice of seeking always to resolve matters informally where appropriate. However, we recognise that it may and will not always be appropriate and sensible to do so. In such rare cases she needs to be able to act. We are unwilling to hobble this power with mandatory preliminaries. That does not seem to us either useful or proportionate.
But I have to say that we are not persuaded either that it is right to introduce the non-consensual audit powers soon to be proposed by the noble Baroness, nor the more specific powers to check on exempt processing where Clause 28 is relied on. As we understand the amendment of the noble Baroness, she will propose that the checking to see whether good practice has been complied with can take place without the consent of the data controller. We have listened carefully to the arguments which have been put forward this evening and on other occasions for the desirability both of the powers suggested by the noble Baroness and the power suggested by the noble Lord, Lord Norton. We have also listened carefully to the contrary arguments which have been put to us over time. We think the balance lies in favour of not subjecting data controllers to the prospect of compulsory check-ups. These can be disruptive. Disruption has a cost. We are not convinced that there is a clear justification for asking businesses to bear this cost. We think the possible benefits of compulsory check-ups do not warrant it. We cannot agree to these amendments today.
We are, however, still listening. I said that the question of the powers of the commissioner was one of judgment and balance, of effectiveness and proportionality. I can say to the House today that the registrar is continuing to put ideas to us as to a more rounded-out information notice power which offers her additional scope for appropriate action without unduly limiting data controllers' liberty to go about their business. We shall see whether we cannot go some way further to accommodate these ideas and bring forward suitable amendments as soon as we can.
I hope that the amendment we bring forward today will be seen as an earnest of our intentions and that in the circumstances the other amendments either will be withdrawn or not moved.
Baroness Nicholson of Winterbourne: My Lords, I waited to hear the noble and learned Lord's proposals as regards his amendment before commenting on Amendment No. 64. Perhaps I may comment, first, on Amendment No. 49. I echo the Solicitor-General's comments. Why make an informal approach first? The

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commissioner should have no such obligation. It would surely give ill-intentioned businesses time to set things right, safely hidden away from everyone, ready to start again with the next case. Such an informal approach would not seem binding and therefore gives all the power to the one in possession of the information.
If the noble and learned Lord agrees with that reasoning—from what he said on his amendment it seems that he did—I suggest that he has weighted too heavily the balance between the Data Protection Registrar and the data controllers, in this case mainly businesses. I suggest that the balance is weighted too heavily against the data protection commissioner.
The noble and learned Lord stated to the House that most businesses will be in line with the 1984 Act and the new legislation. As regards Amendment No. 64, I remind him that, according to polls that have been undertaken officially, 40 per cent. of businesses do not comply with the current Act. Amendment No. 64 takes that into account in allowing the data protection commissioner to make spot checks.
Viscount Astor: My Lords, I understand the noble and learned Lord's argument. However, it must be better for matters to be sorted out by informal approaches. The registrar seems to recognise that. That should be recognised in the Bill. I believe the Government recognise that such an approach is always best.
If, in effect, my amendment fetters the registrar, how is it that the Bank of England has to take that same approach when it considers revoking a licence? I have not heard a representative of the Bank of England or any bank officials say that it is a problem in those cases. Section 13 of the Banking Act 1987 makes provision for such action only after the informal approach has failed to resolve the issue.
6.15 p.m.
Lord Falconer of Thoroton: My Lords, with respect to the noble Viscount, as the Bill stands without amendment, it will be perfectly open to the commissioner to make an informal approach before any information notice is served. As I indicated, it may well not be appropriate to make an informal approach first but to go straight to the information notice phase because the circumstances justify it. It seems to us appropriate that the registrar or commissioner should be able to choose the appropriate course.
The noble Viscount draws an analogy between revoking a banking licence on the one hand and serving an information notice on the other. Merely stating the two powers indicates that they are very different indeed. In relation to a banking licence, one is dealing, first, with someone's livelihood, and, secondly, an issue in respect of which there must be public confidence. So, even having heard the arguments so well put by the noble Viscount, it seems to me clear that there is a substantial difference. With the greatest respect to him, we gain no real support or assistance from the analogy that he seeks to draw.
I replied in advance to the noble Baroness in respect of her amendment. At bottom, the noble Baroness's point is that the balance should be tilted in favour of the
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data subject in this respect. What underlay all my remarks is that we think a balance has to he struck between the rights of the data controller and of the data subject. There is power to audit a data controller's compliance with good practice. We think it right that it should be only with the consent of the data controller. Otherwise it could give rise to a burden upon a data controller which would be too disruptive and too high a price to pay for the regime.
Baroness Nicholson of Winterbourne: My Lords, the poll—I understand that it was an official poll—stated that 40 per cent. of current businesses do not honour the current legislation. Does the Minister accept that that must be addressed by the authorities and that the Bill should take that knowledge into account? We cannot allow Acts to be passed which are not fulfilled by the broad majority of those whom they address.
Lord Falconer of Thoroton: My Lords, I am not aware of the result of the poll but I do not dispute what the noble Baroness says about it. I am sure that the right way to procure compliance with the law is not to place upon business a burden that we regard as undue. I entirely agree with the noble Baroness that it is appropriate and right that the terms of the law be made known, and that the appropriate steps, which do not involve too much of a burden, be taken to ensure their compliance.
At the end of the day it is a question of where the balance lies. We have taken the view, although I have indicated that we are still listening, that the balance lies in making the audit power consensual. It is for that reason that we do not propose to accept the amendment because we think that the balance is in favour of the data controller in relation to that issue.
Lord Norton: My Lords, before the Minister sits down, he mentioned that it would be too great a burden for data controllers. Audits in general have to be performed to ensure fiscal compliance, and so on. In order to comply with a different form of legislation, I can see no reason why audits should not be performed. They need not be burdensome. They need not be on-the-spot checks. They can be planned. The very nature of data processing is that in many instances it leaves a trail. I wonder what burden the noble and learned Lord is thinking of.
Lord Falconer of Thoroton: My Lords, the proposal made in the name of the noble Lord, Lord Norton, and the noble Baroness, Lady Nicholson, involves giving the commissioner the power, without the consent of the person being investigated, to conduct an assessment or investigation of what that person is doing. That involves a disruption, a cost, and an element of intrusion in relation to their business. We do not think that that element of cost, disruption and intrusion is justified in seeking to balance the interest of the data controller with the data subject.
Lord Norton: My Lords, I have listened to the helpful comments of the noble and learned Lord the

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Solicitor-General. I shall read his comments in Hansard with great interest. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 31 [Journalism, literature and art]:
Lord Williams of Mostyn Lord Williams of Mostyn moved Amendment No. 32:
Page 18, line 43, leave out ("specified in subsection (2)") and insert ("to which this subsection relates").
The noble Lord said: My Lords, in this group are Amendments Nos. 37, 38, 39, 40, 41, 42, 43 and 44.
Viscount Astor: My Lords, I believe that we are speaking to Amendments Nos. 32, 33, 34, 35 and 36.
Lord Williams of Mostyn: My Lords, I have been led astray by an older man; namely, the Solicitor-General.
Lord Falconer of Thoroton: My Lords, it is entirely my fault for not rising to my feet quickly enough. I am sure that I do not have to remind your Lordships of the importance of Clause 31 in the data protection regime created by the Bill. It is to that section that this group of amendments relates. Perhaps I may speak to Amendments Nos. 32, 33, 34, 35, 36, 73 and 76 in this group.
I turn first to Amendments Nos. 32 to 36. This group of amendments is in effect mainly technical. It brings the terminology of subsection (1) of Clause 31, into line with that of subsection (2) of the clause.
The remaining four amendments to Clause 31 are of a little more substance, but they clarify or complement the provision which is already made in the clause rather than changing it. An essential feature of the mechanism is that it prevents data protection considerations being used to prevent the publication of unpublished journalistic and other material in certain circumstances. Clause 31 (4) provides for civil proceedings under any relevant provisions of the Bill to be stayed where a data controller claims that the processing is undertaken only for the special purposes—that is, journalistic, literary or artistic purposes—and with a view to the publication of previously unpublished material. The stay on proceedings remains until either the claim is withdrawn or a determination of the commissioner under Clause 43 that those criteria are not satisfied takes effect.
It occurs to us that there may be a small ambiguity in these arrangements. This concerns the circumstances in which no explicit claim is made by a data controller, but it appears to the court that the basis for such a claim is there—that is, that the processing is for the special purposes and with a view to the publication of unpublished material. Our expectation would be that in such circumstances a court would not in any event proceed to grant relief—by way of injunction otherwise—to a data subject inappropriately. But these amendments put the matter beyond doubt. They require proceedings to be stayed where a data controller makes a claim or where it appears to the court independently that the criteria in Clause 31(4) are met.
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This small change would improve the clarity of the Bill in this respect. I commend the amendments to the House. I beg to move.
On Question, amendment agreed to.
Lord Falconer of Thoroton Lord Falconer of Thoroton moved Amendments Nos. 33 to 36:
Page 19, line 22, after ("Where") insert ("at any time ("the relevant time")").
Page 19, line 23, leave out from ("claims") to ("that") in line 24 and insert (", or it appears to the court,").
Page 19, leave out line 34.
Page 19, line 36, at end insert ("or
() in a case where the proceedings were stayed on the making of a claim, that the claim is withdrawn.").
On Question, amendments agreed to.
Clause 32 [Research, history and statistics]:
Lord Teviot Lord Teviot moved Amendment No. 37:
Page 20, line 7, at end insert ("and for these purposes a data controller may deposit records containing personal data in a record office open to the public which agrees to comply with a code of practice approved by the Secretary of State").
The noble Lord said: My Lords, in moving this amendment I shall also speak to Amendment No. 38. In Committee, I was happy to accept the Minister's assurance that many of the concerns of the archive profession would be addressed by a code of practice issued by the Secretary of State. This amendment attempts to encourage record creators to deposit the records which are to receive further processing, and in particular to make provision for the period between the coming into force of this Act and the issuing of a code of practice. They need a clear statement authorising them to do so in the Act and not merely in the obscurity of a statutory instrument, which may not even appear for some months.
However, I do not know whether I have been pre-emptive or precipitate. Looking at Amendment No. 58, I see that there is to be a new schedule, which the Minister will undoubtedly introduce with the next grouping, to deal with certain exemptions so far as I understand them. I accept that they may go some way towards reassuring the depositories I have in mind. However, I should like an assurance when the Minister replies.
I should point out that these records are not for the most part public records, and therefore do not have the protection that that definition provides. The type of records I have in mind are membership registers of trades unions or co-operative societies, lists of employees and their wages among business records, and records of the recipients of charities. All such records are now protected by long closure periods, which will doubtless be confirmed by a code of practice. But until that code is published there is a real risk that some organisations, realising that their records do not conform to the Act, will be deterred from depositing them, resulting in their eventual loss to posterity.
I turn to Amendment No. 38. Noble Lords will realise that I moved this precise amendment in Committee. The noble and learned Lord the Solicitor-General indicated that the Government were concerned over this particular

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point and would try to find a compromise within the European directive. Hence, I have been anxiously looking for such an amendment to appear—sadly, in vain. However, I appreciate the Government's difficulties, and perhaps one will see such an amendment next week. That is the reason why I am reintroducing this amendment.
Its purpose is to ensure that research by a third party in the interests of a particular data subject without his prior consent may be allowed to continue. Although Clause 32(5)(b) allows such research on a data subject by a person acting "on his behalf", I am concerned that that provision may be interpreted to mean acting "on his authority". This amendment would cover the relatively few cases where that condition cannot be met.
Furthermore, I have learnt today that the Law Society is eagerly awaiting the Minister's answer to this problem. Its particular concern is for solicitors to be able to continue to trace beneficiaries of wills—an example that I mentioned in Committee. I should be grateful to have an answer to that point today. If the phrase "vital interests", in paragraph 3(a) of Schedule 3 is thought to be too clinical, I should be happy to add "or in his best interests" to Clause 32(5)(b), which would thus allow data to be disclosed "to the data subject or a person acting on his behalf, or in his best interests". I beg to move.
Lord Williams of Mostyn: My Lords, within this group we begin with Amendments Nos. 37 and 38, followed by Amendments Nos. 39, 40, 41, 42, 43 and 44. With his usual courtesy the noble Viscount has indicated that he will not move or speak to Amendments Nos. 45 and 46. That therefore leaves Amendment No. 74 as the final amendment in this group.
I am grateful to the noble Lord, Lord Teviot, for explaining these amendments. Perhaps I may return to Amendment No. 58 in its due place since it deals with a very technical area which will require a rather tedious and lengthy explanation. As I understand the noble Lord's first amendment, he wants to bring about a situation whereby records obtained by one person for a particular person and then passed to a public records office may be made available to the public in accordance with a code of practice approved by the Secretary of State.
Public records offices and public registers do not need to rely on the research exemption in order to disclose material which is statutorily required to be made public. That can be done under Clause 33.
Lord Teviot: My Lords, with respect to the noble Lord, I believe the examples I mentioned were those records not covered by the Public Records Office. They may be covered by a records office, but not the Public Records Office.
6.30 p.m.
Lord Williams of Mostyn: My Lords, that is so. We have made distinct provisions for public records which are not limited by the restrictions in Clause 32. I appreciate that there may be two further concerns. The
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first relates to contributors to registers. We believe that their position is covered by Clause 34(1). The second is the point on which the noble Lord was good enough to intervene: that records are not always the subject of statutory requirements to be provided.
We do not believe that the noble Lord's amendment is capable of being accepted within the terms of the directive. I think the noble Lord anticipated that that might be our response. It is not a response which is come to lightly; we wish to do our best to be co-operative. As I said in Grand Committee, I recognise these concerns. I am happy to say that officials are more than willing to meet the noble Lord—if he wishes, with colleagues of his or those who have interests in this field—to see whether we can make further progress towards a solution which might be helpful to the interests which he identified.
The amendment would bring about the disclosure of any records collected for any purpose. It would imply that the disclosure of any records collected for any purpose was fair and compatible with the original purpose. That might be the case in some circumstances, but we are unable to advise your Lordships that such disclosure would always meet the relevant tests. I hope that this can be the subject of further useful discussion.
If the record office keeps records for research purposes only, the contributor can himself claim the benefit of Clause 32(5) to protect an exemption on which he himself relies.
What I have said about Clause 33 also applies to Amendment No. 38. In so far as there are other research purposes which do not have the public character to which the noble Lord referred, the limitations in Clause 32(5) acknowledge the fact that we are allowed by the directive to make special exemptions for research purposes on two conditions only. The first is that data subjects are suitably safeguarded and the second that the processing in question is solely for research purposes and no other. Clause 32(5) is therefore for a particular function and no other. It provides that researchers can within those limits which I have identified give voluntary subject access without losing the right to say that they are processing solely for research purposes.
Clause 32(5)(b) provides that researchers can safely disclose to the data subject or a person acting on his behalf. Read with Clause 32(5)(d), we believe that that extends to persons whom the researcher had reasonable grounds for believing are acting on behalf of the data subject. We do not see any need to give that reference to a person acting on behalf of the data subject an artificially narrow construction. The noble Lord raised the question of an executor acting on behalf of a beneficiary. We believe that the executor acting on behalf of a beneficiary is lawfully entitled to continue the researches. That is the specific Law Society question which the noble Lord transmitted earlier. I hope that I have been able to reassure him and, through him, the Law Society.
Casting the net a little wider, it might well extend to a care agency, for instance, seeking to search out and support a missing person, though we should bear in mind that sometimes persons go missing for purposes

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which they regard as legitimate and reasonable. One again comes up against the difficult balancing which is sometimes easer to identify than to bring perfect harmony to.
I hope that I have been able to reassure the noble Lord that the reference to persons acting on behalf of the data subject can be given a practical interpretation, but I repeat that we are always willing to have discussions on an official or any other basis to see whether anything further ought properly to be done.
The next amendment in this grouping is Amendment No. 39, a government amendment. There is currently an omission in Clause 33. This clause relates to personal data made available to the public by or under enactment. An example might be the Registry of Births, Marriages and Deaths. The clause provides an exemption for such data from the subject information provisions, from Clause 12, which gives data subjects the right to have inaccurate data rectified, and from the non-disclosure provisions.
The exemption from Clause 12 is included because, where the data are required to be maintained and made available to the public by statute, those statutes make detailed special provision as to accuracy and therefore as to amendments and corrections. Any amendments to the data to correct inaccuracies in that class of records should be made under those specific statutory provisions rather than under data protection legislation. But Clause 12 is only a part of the Bill's regime for correcting inaccuracy. It provides individuals with direct civil remedies in the courts. Its counterpart in the regulatory regime is the fourth data protection principle, which requires personal data to be accurate and, where necessary, kept up to date. This principle can be enforced by the commissioner, and breach may give rise to a claim for damages under Clause 11. We do not want that to apply to public registers. They have their own systems for correcting inaccuracies. It would be a confusing duplication to overlay that with the requirements of the fourth data protection principle. That is the purpose of this amendment.
Amendments Nos. 40, 41, 42, 44 and 74 are government amendments. Amendment No. 43 is in the name of the noble Lords, Lord Campbell of Alloway and Lord Burnham. If I understand correctly from the noble Lord, Lord Campbell of Alloway, our amendments meet his requirements.
Lord Burnham: My Lords, I thank the noble Lord for giving way. I can solve this problem very quickly. I am most grateful to the noble Lord for his courtesy in writing to my noble friend Lord Campbell and even more so for incorporating our Amendment No. 43 in his Amendment No. 44. I shall not move our amendment.
Lord Williams of Mostyn: My Lords, I thank the noble Lord for his courtesy. I shall deal with Amendments Nos. 40 to 44 and 74 relatively briefly. This group of amendments extends slightly the subject information exemptions in Schedule 7.
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The first three amendments deal with the exemption in paragraph 1 of the schedule for confidential references provided by data controllers. It has been suggested to us that the exemption is too narrow. The references to education and employment may be too restrictive. We have therefore introduced these amendments to meet those concerns.
The next government amendment, Amendment No. 44, creates a new power for the Secretary of State to specify subject information exemptions in relation to employment and the service of the Crown or in relation to offices to which appointments are made by Her Majesty or Ministers. There is already an exemption in paragraph 3(a), which the Solicitor-General dealt with in Grand Committee, in relation to appointments to judicial office or the office of Queen's Counsel. It has been represented to us, not least by the noble Lords, Lord Burnham and Lord Campbell of Alloway, that there may be other positions in the public service which ought to be within that class of exemption. I stress that I am not able to make any commitments, but an example might be the senior military posts to which the noble Lords, Lord Burnham and Lord Campbell of Alloway, referred previously. We accepted this widening in principle; the question was how to bring it about.
I stress to your Lordships that we have in mind here only public positions where there are pressing reasons of public interest to make exemptions from the principle of transparency in subject access provisions. There are some public positions which are sensitive and prominent and which require absolute discretion in the appointments system if it is to work at all. We believe that the public is entitled to expect as much information as possible, subject to the provisos I set out. We have therefore formulated an exemption to allow the greatest possible flexibility so that the Secretary of State may specify exemptions by order. We believe that that is wiser and more prudent than having something inflexible on the face of the Bill. We have set out the scheme. I repeat my gratitude for the approach taken by the noble Lords, Lord Burnham and Lord Campbell of Alloway.
The final amendment, Amendment No. 74, is to ensure that this power is subject to the affirmative resolution procedure. We believe that any detailed proposals brought forward ought to be subject to parliamentary scrutiny in this respect.
On the basis of that explanation, I commend the government amendments.
The Lord Bishop of Ely: My Lords, I do not want to detain the House for too long. The concerns of the Bill relate to the data holding of all the Churches and, in particular, to the Church of England in virtue of Crown appointments. I should like to assure your Lordships of the full support of the Churches—who have discussed the implications of the directives since their publication—for individual rights and their commitment to scrupulous observation of them.
The Churches have a specific concern for the selection of candidates for ordination. That is why we are grateful for the Minister's proposal in Amendment

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No. 40, and the insertion of the word "training". The addition of the word "office" in Amendment No. 42 is also helpful in that it extends the exemption of confidential references to ecclesiastical offices, which are not employment. I also express my support for Her Majesty's Government's inclusion in Amendment No. 44 relating to Schedule 4 of appointments made by Her Majesty.
Lord Williams of Mostyn: My Lords, I am grateful to the right reverend Prelate for his support. Representations were made by the Church authorities. We gave them every consideration and that is why we tabled the amendments in this form.
Lord Teviot: My Lords, I am grateful to the Minister for responding to my amendment so pleasantly and informatively. I shall take up his invitation to meet with his officials, particularly in relation to Amendment No. 37. With no more ado, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 38 not moved.]
Clause 33 [Information available to the public by or under enactment]:
Lord Williams of Mostyn Lord Williams of Mostyn moved Amendment No. 39:
Page 20, line 28, at beginning insert ("the fourth data protection principle and").
On Question, amendment agreed to.
Schedule 7 [Miscellaneous exemptions]:
Lord Williams of Mostyn Lord Williams of Mostyn moved Amendments Nos. 40 to 42:
Page 49, line 20, after second ("education") insert (", training").
Page 49, line 20, after second ("education") insert (", training").
Page 49, line 21, after ("subject") insert—
("() the appointment, or prospective appointment, of the data subject to any office,").
The noble Lord said: My Lords, I have already spoken to Amendments Nos. 40, 41 and 42. With the leave of the House, I shall move them en bloc. I beg to move.
On Question, amendments agreed to.
[Amendment No. 43 not moved.]
Lord Williams of Mostyn Lord Williams of Mostyn moved Amendment No. 44:
Page 49, line 32, at end insert—
("Crown employment and Crown or Ministerial appointments
3A. —(1) The Secretary of State may by order exempt from the subject information provisions personal data processed for the purposes of assessing any person's suitability for—

(a) employment by or under the Crown, or

(b) any office to which appointments are made by Her Majesty, by a Minister of the Crown or by a Northern Ireland department.").

The noble Lord said: My Lords, I have already spoken to this amendment. I beg to move.
On Question, amendment agreed to.
[Amendments Nos. 45 and 46 not moved.]
6.45 p.m.
Lord Williams of Mostyn Lord Williams of Mostyn moved Amendment No. 47:
After Clause 37, insert the following new clause—
TRANSITIONAL RELIFY
(". Schedule (Transitional relief) (which confers transitional exemptions) has effect.").
The noble Lord said: My Lords, Amendment No. 47 is grouped with Amendments Nos. 58 and 79 to 83. These amendments deal with the transitional provisions proposed for the Bill. I am sorry that it has taken until now to put these proposals forward.
Perhaps not unusually, the transitional arrangements are extremely difficult because they are so technical and have been subject to many representations from various people with proper interests. It has therefore been difficult and time consuming, added to which the directive is not always the easiest beast to understand. We have tried to take full advantage of transitional flexibility while ensuring that arrangements are practicable and, importantly, do not impose unnecessary burdens on controllers.
We canvassed a number of different options and from the soundings there appeared to be two messages: first, to try to avoid if possible the creation of a dual regime— that is, running the 1984 regime and the new Act alongside each other during the transitional period; secondly, there was an equally strong desire to find arrangements which did not result in systems having to be changed merely because additional personal data were added to them during the transitional period. Organisations are already having difficulties with what I might call the "year 2000 problem". Many have made clear to us the extreme difficulty that they would have in coping in addition with the detailed technical systems changes which a provision of that kind could require. I believe that the new arrangements meet those concerns, as well as our objectives.
I shall try to be brief. The overall structure and effect of this grouping has two broad objectives: Amendments Nos. 47, 58 and 79 to 82 give effect to the transitional exemptions permitted by the directive; Amendment No. 83 makes technical provision to ensure the smooth transition from the 1984 Act to the Bill. I shall concentrate on the first set.
The key provision is the new schedule in Amendment No. 58. The basic scheme is that the transitional exemptions apply to "processing already under way" immediately before 24th October 1998. As your Lordships will remember, that is the date on which the directive is due to be implemented by member states. Paragraph 1 of the schedule is expressed in such a way that the subsequent addition of new personal data to such processing need not invalidate the exemption. That was one of the major concerns expressed to us in the discussions which I mentioned earlier. We are confident that the directive does not require this, so nor does the Bill. Any new processing started on or after 24th October 1998 will be subject in full to the Bill's provisions immediately. I therefore turn to processing already under way.
The expression is taken directly from the directive, where it is not defined. We have considered carefully whether we should seek to define it in the Bill. We concluded that we should not. Taking account of the informal discussions, we believe that the best approach is to allow data controllers themselves to decide what is and what is not processing already under way, in the light of any guidance that may be issued by the commissioner.
The exemptions fall into four broad categories. First, there is a complete exemption until 23rd October 2001 for certain processing. That covers processing of all manual records to which the Bill applies; and the principal categories of automated processing to which the 1984 Act does not apply but which will come within the scope of the Bill. Those exemptions are set out in paragraphs 2 to 9 of the schedule. Paragraph 10 is a limited exemption which replicates a similar provision in the 1984 Act.
The second main exemption applies to all remaining automated processing— that is to say, processing to which the 1984 Act currently applies. Such processing is exempt from those provisions of the Bill which are specified in paragraph 11 until 23rd October 2001. The exemption applies to most of the new requirements imposed by the Bill in consequence of the requirements of the directive. So, for example, it covers the requirement for controllers to provide information to data subjects under paragraph 2 of Part II of Schedule 1; the requirement to satisfy the conditions in Schedules 2 and, in some cases, 3, before processing may take place; the rights for individuals to object to processing under Clauses 9, 10 and 13; as well as a number of other provisions which are new to our law.
The third main exemption relates only to manual records. Part III of the schedule provides a further exemption from, in effect, the first five data protection principles (except the requirement to provide information to individuals under paragraph 2 of Part II of Schedule 1) for the period 24th October 2001 to 23rd October 2007.
In relation to this further exemption, first, it does not cover the subject access arrangements. Individuals will be able to gain access to their manual records as from 24th October 2001. Secondly, the exemption does not apply to personal data newly added to existing systems after 24th October 1998. Thirdly, the new schedule in Amendment No. 82 provides for individuals to be able to remedy inaccuracy in, or incompatible holding of, their manual data during this extended transitional period. The fourth category of exemption in the new schedule in Amendment No. 58 is found in Part IV. That provides special exemptions for processing only for historical research purposes from 23rd October 2001 with no limit as to time.
I have had to spend a moment or two in explanation. These are technical provisions. One further point arises as to the technical provisions made in Amendment No. 83. One of the things that is of concern to those affected by data protection law is what will happen to the existing registrations. We offer them the answer that existing registrations will be preserved until their normal date of expiry and treated as though they were notifications under the Bill. We believe that that is the simplest and most effective solution to this problem. It means that the data protection commissioner will not be
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inundated with a sudden surge of requests for notification. That is the thinking and the rationale behind this group of amendments. I commend them to the House.
Viscount Astor: My Lords, I am extremely grateful to the noble Lord for bringing forward his amendments on transitional relief. We are grateful that the Government have taken full advantage of the transitional reliefs that are offered by the directive.
As the noble Lord will appreciate, his amendments cover about six pages of the Marshalled List and he gave a detailed explanation, which I shall have to study carefully. Perhaps I may ask him one or two questions. I am concerned that paragraph 1 of the new schedule is not sufficiently clear on eligible data. Given continuity of processing for a specified purpose, the definition of "eligible data" for the purpose of transitional relief needs to be clear that they do or do not include data, such as an address, amended on or after 24th October 1998; data added to a record, such as a new educational qualification or a subsequent purchase for a continuing customer, on or after 24th October 1998; and data for a new data subject, such as a new employee, added on or after 24th October 1998.
It also needs to be clear that amendments to programs—such as those that may be necessary to deal with the millennium bug—do not disqualify the processing from transitional relief. Can the noble Lord confirm that none of these changes should disqualify processing from one or more specified purposes which began prior to 24th October 1998 from transitional relief? Further, the replacement of a software system by another employed for the same continuing purpose should not disqualify that processing from transitional relief.
I realise that those are rather technical questions and that transitional relief is a technical subject. Therefore, I should be very happy for the noble Lord to write to me between now and Third Reading on any of those questions. However, in general, we welcome the noble Lord's amendments.
Lord Williams of Mostyn: My Lords, that is a generous approach by the noble Viscount. His questions merit thought and detailed answers. I undertake to write to him with specific answers to each of those questions as soon as maybe.
On Question, amendment agreed to.
Clause 40 [Request for assessment]:
Viscount Astor Viscount Astor moved Amendment No. 48:
Page 23, line 25, at beginning insert ("if not, of his reasons, and if so,").
The noble Viscount said: My Lords, this is the amendment I nearly started to move earlier. I moved a similar amendment in Committee. It concerns the commissioner and open government. The Minister said that he accepted that my amendment applies only to the extent that the commissioner considers appropriate, which I thought was very reasonable. He then went on to say that it would not always be appropriate for her to explain her views and actions. He then used that as an argument for saying that he did not want the

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amendment. That rather contradicted his earlier statement that the commissioner has to go through this thing only if she considers it appropriate. For the benefit of open government I thought it worth returning to the issue to ask whether the Government had reconsidered their earlier view. I beg to move.
Lord Falconer of Thoroton: My Lords, the noble Viscount will recall my noble friend's response to his amendment in the Grand Committee. My noble friend said that the amendment was unnecessary and that remains the Government's view.
Clause 40 places an express duty on the commissioner, except in very limited circumstances, to make an assessment on receipt of a request. The noble Viscount's amendment seeks to require the commissioner to give reasons when she refuses to make such an assessment. The only bases for refusal to make an assessment under the Bill are those set out in subsection (2)(a) and (b): namely, that she has not been supplied with such information as she may reasonably require in order to satisfy herself as to the identity of the person making the request; and to enable her to identify the processing in question. So far as concerns paragraph (a)—the identity of the person making the request—that is a simple matter of trying to establish who that person is. If she is not sure, she can ask for more information. If she does not get it, she will notify as much under Clause 40(4). The basis for that will be apparent.
So far as concerns paragraph (b), if she cannot identify the processing, that is likely to be because the person making the request has not, despite being asked, given enough details. Again, that will be very apparent. The commissioner will have information notice powers to seek further details from the data controller if she can establish who that is. So it is unlikely to be the situation contemplated in Clause 40(2). On the basis of the analysis that has gone before, a refusal to make an assessment at all is only likely to result from a process of dialogue with the person making the request which ends with that person not giving enough reasonably requested information. It is not the sort of exercise of discretion where the giving of reasons has much obvious part to play.
Further—and this is worth emphasising—Clause 40(4)(b) requires the commissioner to inform the person who made the request for assessment of,
"any view formed or action taken as a result of the request".
In the Government's view, this means that the commissioner must, to the extent that is appropriate, tell the person concerned of any view formed about the merits of a request in respect of which the commissioner decided to take no further action. Whether and to what extent the provision of this information is considered appropriate is, in our view, quite rightly a matter for the commissioner, who must have particular regard to the issues of confidentiality.
I have explained why we think the amendment is unnecessary. I hope that the noble Viscount will consider withdrawing it.
Viscount Astor: My Lords, I am grateful to the noble and learned Lord. He has certainly gone further this
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evening in explaining the Government's views. I think he has satisfied my concerns. No doubt the registrar will have to take account of what was said during the passage of the Bill. I shall read carefully what he said. I notice that Amendments Nos. 67, 68 and 69 are grouped with this amendment and I wonder whether the noble and learned Lord wishes to speak to those before I withdraw my amendment.
Lord Falconer of Thoroton: My Lords, I am grateful to the noble Viscount for making that point. I was going to interrupt him before he finished because I had noticed that I should have spoken to those amendments.
Amendments Nos. 67 and 68 would allow the Secretary of State to direct the commissioner to assist the commissioner's opposite number in a colony to carry out data protection functions. They have been tabled in response to a request by the Gibraltar Government, who would like the commissioner to be able to carry out data protection functions on behalf of any supervisory authority which may be established there at the request of that authority. I understand that it is Gibraltar's intention to legislate later this year to implement the 1995 data protection directive. It is not possible to estimate at this stage the extent to which the commissioner's assistance might be required in this regard, but I am able to reassure your Lordships that the commissioner will be able to charge for such assistance on such terms as the Secretary of State may direct or approve. Any receipts would be treated in the same way as if they had originated in the United Kingdom; that is to say, they would be subject to the regime specified in Schedule 5 to the Bill.
With the leave of the House I shall speak to Amendment No. 69. It relates to Clause 54. That clause imposes a duty of confidentiality on the commissioner and her staff in respect of the information (both personal and business) which they obtain in the course of carrying out their functions under the Bill. The duty is backed by a criminal sanction.
Concern has been expressed that the clause, as drafted, imposed too heavy-handed a regime of secrecy on the commissioner's staff and might place them too readily in jeopardy of criminal penalties. I know this was of concern to the registrar, particularly in view of the culture of openness fostered by her office.
In Committee, we had a brief debate about the clause in the light of an alternative version proposed by the noble Baroness. Since Committee, Home Office officials have had the opportunity of discussing the provision further with the registrar. This amendment is the result of that discussion.
It does not go as far as the registrar had perhaps hoped but does incorporate some of her suggestions. While we are sympathetic to her points we are, of course, bound to implement the directive. This contains an express requirement to ensure that the members and staff of the supervisory authority are subject to a duty of professional secrecy with regard to confidential information to which they have access.

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While I appreciate that the overall effect of the amendment may appear remarkably similar to that of the present clause, it incorporates a number of changes. The obligation of secrecy is now imposed specifically on, and limited to a,
"person who is or has been the Commissioner, a member of the Commissioner's staff or an agent of the Commissioner",
rather than being related to the information itself and applying to "any person". This wording more clearly reflects the requirement of the directive.
The drafting has also been amended so that the elements which go to make up "confidential" information are contained within subsection (1) and the extent of the authority to disclose is contained in subsection (2).
On a technical point, the registrar considers that with this amendment, in the event of a prosecution under the clause, it would be for the prosecution to prove that the disclosure was of information falling within all the elements now contained in subsection (1).
The registrar had some concern that in the present clause subsection (1)(b) might operate by way of a defence only, so that if a member of staff was charged under the clause he would have to show that the information was in the public domain. This would have placed an additional burden on the member of staff. To that extent we have sought to accommodate the registrar's concerns. I cannot see, in the light of the directive, that we can go further. I commend the amendment to the House.
Viscount Astor: My Lords, it is for me at this stage to withdraw Amendment No. 48.
Amendment, by leave, withdrawn.
Clause 41 [Information notices]:
[Amendment No. 49 not moved.]
Lord Falconer of Thoroton Lord Falconer of Thoroton moved Amendment No. 50:
Page 24, line 7, leave out from ("furnished") to ("pending") in line 8.
On Question, amendment agreed to.
Schedule 6 [Appeal proceedings]:
Lord Falconer of Thoroton Lord Falconer of Thoroton moved Amendment No. 51:
Page 47, line 30, leave out ("one or more") and insert ("those").
The noble and learned Lord said: My Lords, Clause 27 provides for personal data to be exempted from the main elements of the Bill where this is necessary to safeguard national security. The question of necessity is subject to ministerial certification. There is a right of appeal to a designated panel of the Data Protection Tribunal for any person affected by this certification. Schedule 6 has effect in relation to these appeals and to the proceedings of the tribunal in respect of them.
The proposed amendments have been put forward in the light of further reflection on the arrangements for these appeals. In this group are Amendments Nos. 51 to 56 and 84 and 85. The amendments to Schedule 6 would have the effect of requiring the tribunal to be drawn from a panel of lawyers, with a quorum of three, when hearing
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national security appeals other than those in which the tribunal's jurisdiction is exercised ex parte. The lawyers concerned would be drawn from those designated under paragraph 2(1) of the schedule—that is to say, from among the tribunal chairman and those deputy tribunal chairmen appointed by the Lord Chancellor whom he has designated as being capable of hearing such appeals. One of these persons will be designated by the Lord Chancellor to preside.
I said in Committee that there were going to be circumstances in which personal data would need to be processed by the appropriate agencies to safeguard national security and that Clause 27 made it possible for that processing to be carried out without the otherwise subsisting controls in the Bill putting national security at risk. I stressed that the exemptions available could apply only if they were required for the purpose of safeguarding national security and then only to the extent that they were so required. A Cabinet Minister, the Attorney-General or the Lord Advocate would be able to certify the requirement. Under the current Data Protection Act the signing of a ministerial exemption certificate is the end of the matter. This Bill will give a right of appeal to the Data Protection Tribunal for persons affected by the issue of such a certificate.
Having, as I indicated, reflected further on the arrangements for giving effect to this provision, I have to tell your Lordships that we believe the specialised and sensitive nature of these national security appeals makes it appropriate for them to be dealt with by lawyers. Appeals under Clause 27(4) of the Bill will be dealt with by a judicial review approach, which is not inherently suited to lay input. Appeals under Clause 27(6) will turn on a fairly narrow question of fact; that is, whether the certificate's general description of personal data applies to the particular personal data at issue. It seems to us that this is a question on which lay members are unlikely to be able to offer any additional expertise. But if a non-legal perspective or a particular data protection expertise were found to be needed in either case, this would of course be available to the tribunal via expert witnesses. An all-lawyer panel for these appeals would, furthermore, be in line with the position of the existing tribunals which deal with matters involving national security.
The proposed amendments to Schedule 10 would have the effect of removing the tribunal from the jurisdiction of the Council on Tribunals in relation to national security appeals. It would remain subject to the council's supervision in respect of other appeals. This proposed exemption, which the council is aware of, would preserve the current position in regard to tribunals dealing with matters involving national security; namely, that they are, because of national security considerations, outside the council's remit and their work kept within the so-called "ring of secrecy".
A particular effect of this amendment would be to remove the requirement for the Secretary of State to consult the Council on Tribunals when drawing up rules of procedure. I am happy to assure your Lordships that in practice we intend to consult the council on the rules

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which we shall be drafting for national security appeals as soon as practicable and which will be laid before your Lordships' House. I beg to move.
On Question, amendment agreed to.
Lord Falconer of Thoroton Lord Falconer of Thoroton moved Amendments Nos. 52 to 56:
Page 47, leave out lines 32 to 34.
Page 47, line 35, leave out ("or (2)").
Page 47, line 36, leave out ("or, as the case may be, by the Secretary of State").
Page 47, leave out lines 40 to 44 and insert ("three of the persons designated under paragraph 2(1), of whom one shall he designated by the Lord Chancellor to preside").
Page 48, leave out lines 1 to 4.
On Question, amendments agreed to.
Clause 47 [Determination of appeals]:
Lord Williams of Mostyn Lord Williams of Mostyn moved Amendment No. 57:
Page 28, line 3, at end insert—
("(7) For the purposes of subsection (6) —

(a) the address of a registered company is that of its registered office, and

(b) the address of a person (other than a registered company) carrying on a business is that of his principal place of business in the United Kingdom.").

The noble Lord said: My Lords, this a short, technical amendment. Clause 47 deals with the determination of appeals brought by data controllers to the Data Protection Tribunal. Subsection (6) provides that any party to an appeal may refer to the appropriate court on a point of law. The appropriate court depends on the address of the person who was the appellant. This amendment specifies how the address is determined. It is based on the approach adopted in the 1984 Act. I beg to move.
On Question, amendment agreed to.
Lord William of Mostyn Lord William of Mostyn moved Amendment No. 58:
Before Schedule 8, insert the following new schedule—
("SCHEDULE
TRANSITIONAL RELIEF
PART 1
INTERPRETATION OF SCHEDULE
1.—(1) For the purposes of this Schedule, personal data are "eligible data" at any time if, and to the extent that, they are at that time subject to processing which was already under way immediately before 24th October 1998.
(2) In this Schedule—
"eligible automated data" means eligible data which fall within paragraph (a) or (b) of the definition of "data" in section 1(1):
"eligible manual data" means eligible data which are not eligible automated data;
"the first transitional period" means the period beginning with the commencement of this Schedule and ending with 23rd October 2001;
"the second transitional period" means the period beginning with 24th October 2001 and ending with 23rd October 2007.
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PART II
EXEMPTIONS AVAILABLE BEFORE 24TH OCTOBER 2001
Manual data
2. Eligible manual data are exempt from the data protection principles and Parts II and Ill of this Act during the first transitional period.
Processing otherwise than by reference to the data subject
3. During the first transitional period, for the purposes of this Act (apart from paragraph 1), eligible automated data are not to be regarded as being "processed" unless the processing is by reference to the data subject.
Payrolls and accounts
4. —(1) Subject to sub-paragraph (2), eligible automated data processed by a data controller for one or more of the following purposes—

(a) calculating amounts payable by way of remuneration or pensions in respect of service in any employment or office or making payments of, or of sums deducted from, such remuneration or pensions, or

(b) keeping accounts relating to any business or other activity carried on by the data controller or keeping records of purchases, sales or other transactions for the purpose of ensuring that the requisite payments are made by or to him in respect of those transactions or for the purpose of making financial or management forecasts to assist him in the conduct of any such business or activity,

are exempt from the data protection principles and Parts II and III of this Act during the first transitional period.
(2) It shall be a condition of the exemption of any eligible automated data under this paragraph that the data are not processed for any other purpose, but the exemption is not lost by any processing of the eligible data for any other purpose if the data controller shows that he had taken such care to prevent it as in all the circumstances was reasonably required.
(3) Data processed only for one or more of the purposes mentioned in sub-paragraph (1)(a) may be disclosed—

(a) to any person, other than the data controller, by whom the remuneration or pensions in question are payable.

(b) for the purpose of obtaining actuarial advice,

(c) for the purpose of giving information as to the persons in any employment or office for use in medical research into the health of, or injuries suffered by, persons engaged in particular occupations or working in particular places or areas,

(d) if the data subject (or a person acting on his behalf) has requested or consented to the disclosure of the data either generally or in the circumstances in which the disclosure in question is made, or

(e) if the person making the disclosure has reasonable grounds for believing that the disclosure falls within paragraph (d) above.

(4) Data processed for any of the purposes mentioned in sub-paragraph (1) may be disclosed—

(a) for the purpose of audit or where the disclosure is for the purpose only of giving information about the data controller's financial affairs; or

(b) in any case in which disclosure would be permitted by any other provision of this Part of this Act if sub-paragraph (2) were included among the non-disclosure provisions.

(5) In this paragraph "remuneration" includes remuneration in kind and "pensions" includes gratuities or similar benefits.
Unincorporated members' clubs and mailing lists
5. Eligible automated data processed by an unincorporated members' club and relating only to the members of the club are exempt from the data protection principles and Parts II and III of this Act during the first transitional period.

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6. Eligible automated data processed by a data controller only for the purposes of distributing, or recording the distribution of, articles or information to the data subjects and consisting only of their names, addresses or other particulars necessary for effecting the distribution, are exempt from the data protection principles and Parts II and III of this Act during the first transitional period.
7. Neither paragraph 5 nor paragraph 6 applies to personal data relating to any data subject unless he has been asked by the club or data controller whether he objects to the data relating to him being processed as mentioned in that paragraph and has not objected.
8. It shall be a condition of the exemption of any data under paragraph 5 that the data are not disclosed except as permitted by paragraph 9 and of the exemption under paragraph 6 that the data are not processed for any purpose other that mentioned in that paragraph or as permitted by paragraph 9, but—

(a) the exemption under paragraph 5 shall not be lost by any disclosure in breach of that condition, and

(b) the exemption under paragraph 6 shall not be lost by any processing in breach of that condition.

if the data controller shows that he had taken such care to prevent it as in all the circumstances was reasonably required.
9. Data to which paragraph 8 applies may be disclosed—

(a) if the data subject (or a person acting on his behalf) has requested or consented to the disclosure of the data either generally or in the circumstances in which the disclosure in question is made,

(b) if the person making the disclosure has reasonable grounds for believing that the disclosure falls within paragraph (a), or

(c) in any case in which disclosure would be permitted by any other provision of this Part of this Act if paragraph 8 were included among the non-disclosure provisions.

Back-up data
10. Eligible automated data which are processed only for the purpose of replacing other data in the event of the latter being lost, destroyed or impaired are exempt from section 7 during the first transitional period.
Exemption of all eligible automated data from certain requirements
11. —(1) During the first transitional period, eligible automated data are exempt from the following provisions—

(a) the first data protection principle to the extent to which it requires compliance with—

(i) paragraph 2 of Part II of Schedule 1,

(ii) the conditions in Schedule 2, and

(iii) the conditions in Schedule 3,

(b) the seventh data protection principle to the extent to which it requires compliance with paragraph 13 of Part II of Schedule 1;

(c) the eighth data protection principle,

(d) in section 7(1), paragraphs (b), (c)(ii) and (d),

(e) sections 9 and 10,

(f) section 11, except so far as relating to—

(i) any contravention of the fourth data protection principle,

(ii) any disclosure without the consent of the data controller,

(iii) loss or destruction of data without the consent of the data controller, or

(iv) processing for the special purposes, and

(g) section 13.

(2) The specific exemptions conferred by sub-paragraph (1)(a), (c) and (e) do not limit the data controller's general duty under the first data protection principle to ensure that processing is fair.
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PART III
EXEMPTIONS AVAILABLE AFTER 23RD OCTOBER 2001 BIT BEFORE 24TH OCTOBER 2007
12. —(1) During the second transitional period, eligible manual data which were held immediately before 24th October 1998 are exempt from the following provisions—

(a) the first data protection principle except to the extent to which it requires compliance with paragraph 2 of Part II of Schedule 1,

(b) the second, third, fourth and fifth data protection principles, and

(c) section 12.

(2) Sub-paragraph (1) does not apply to any eligible manual data to which the exemption in paragraph 14 applies.
PAK r IV
EXEMPTIONS AFTER 23RD OCTOBER 2001 FOR HISTORICAL RESEARCH
13. In this Part of this Schedule "the relevant conditions" has the same meaning as in section 32.
14. —(1) Eligible manual data which are processed only for the purpose of historical research in compliance with the relevant conditions are exempt from the provisions specified in b-paragraph (2) after 23rd October 2001.
(2) The provisions referred to in sub-paragraph (1) are—

(a) the first data protection principle except in so far as it requires compliance with paragraph 2 of Part II of Schedule 1,

(b) the second, third, fourth and fifth data protection principles, and

(c) section 12.

15. —(1) After 23rd October 2001 eligible automated data which are processed only for the purpose of historical research in compliance with the relevant conditions are exempt from the first data protection principle to the extent to which it requires compliance with the conditions in Schedules 2 and 3.
(2) Eligible automated data which are processed—

(a) only for the purpose of historical research,

(b) in compliance with the relevant conditions, and

(c) otherwise than by reference to the data subject,

are also exempt from the provisions referred to in sub-paragraph (3) after 23rd October 2001.
(3) The provisions referred to in sub-paragraph (2) are—

a) the first data protection principle except in so far as it requires

compliance with paragraph 2 of Part II of Schedule 1,

(b) the second, third, fourth and fifth data protection principles, and

(c) section 12.

16. For the purposes of this Part of this Schedule personal data are not to be treated as processed otherwise than for the purpose of historical research merely because the data are disclosed—

(a) to any person, for the purpose of historical research only,

(b) to the data subject or a person acting on his behalf,

(c) at the request, or with the consent, of the data subject or a person acting on his behalf, or

(d) in circumstances in which the person making the disclosure has reasonable grounds for believing that the disclosure falls within paragraph (a), (b) or (c).").

The noble Lord said: My Lords, I have already spoken to this. I beg to move.
On Question, amendment agreed to.
Clause 49 [General duties of Commissioner]:
Viscount Astor Viscount Astor moved Amendment No. 59:
Page 28, line 8, after ("Commissioner") insert ("after taking account of any representations made to him").
The noble Viscount said: My Lords, in Committee I moved a similar amendment seeking that it should be the duty of the commissioner, after consultation with the parties affected, to promote good practice by data controllers. The noble and learned Lord the Solicitor-General said that he wondered whether a statutory requirement was right because it raised questions about who the commissioner should consult and that that would be difficult to prescribe. I took note of what the noble and learned Lord said. I have altered the wording so that the amendment I am moving today, Amendment No. 59, does not impose any prescription on who should be consulted, but states simply that the commissioner should take,
"account of any representations made to him".
I propose the amendment on the basis that it seems an improvement which takes into account the noble and learned Lord's concerns. Given that he offered me a slight chink of light in Committee when he said that he would certainly have another look at the matter, I thought that I would come back with a better amendment. I hope that the noble and learned Lord finds it acceptable.
Again, this is a large group of amendments and your Lordships will note that it includes Amendment No. 71, which stands in the name of the noble Baroness, Lady Nicholson, and which deals with data matching. I have my name to that amendment as I support the principle, but I shall leave it to the noble Baroness to go into all the details. I beg to move Amendment No. 59.
Lord Williams of Mostyn: My Lords, this grouping contains Amendments Nos. 59, 61 and 62. The noble Viscount is right that he raised this matter in Committee when we indicated that there might be some advantage in requiring the commissioner to consult. We promised that we would think about it and we have. We have become convinced that there is an advantage in making the consultation mandatory. It is important that those affected should give their views as part of the process. We believe that our amendment, Amendment No. 61, which specifies,
"and after such consultation with trade associations, data subjects or persons representing data subjects as appears … to be appropriate",
meets the questions raised by the noble Viscount and others. On the basis that our amendment has been drafted to meet what the noble Viscount wanted, I ask him to withdraw his amendments, Amendments Nos. 59 and 62, and to endorse Amendment No. 61, the government amendment, which we have tabled bearing in mind the representations that he made.
Viscount Astor: My Lords, I am extremely grateful to the Minister and I shall, of course, withdraw my amendment. According to my groupings list, other amendments are grouped with this and I do not know whether it will be convenient for the noble Baroness,
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Lady Nicholson, to speak to her amendments now or whether the Minister would like me to withdraw mine first.
Lord Williams of Mostyn: My Lords. I believe that Amendments Nos. 60, 63 and 65, which stand in the name of the noble Baroness, come in the next group.
Viscount Astor: My Lords, I have a different groupings list. I am grateful to the Minister. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
7.15 p.m.
Baroness Nicholson of Winterbourne Baroness Nicholson of Winterbourne moved Amendment No. 60:
Page 28, line 18, at beginning insert ("where so directed by the Secretary of State by order and, in any other case,").
The noble Baroness said: My Lords, in moving Amendment No. 60, I should like to speak also to Amendments Nos. 63, 65, 66, 77 and 71, which is starred. In their places on the Marshalled List, I shall also be moving Amendments Nos. 73 and 76, but most briefly because they are part of the same thinking as this group of important amendments to which I am now speaking.
Clause 49, my proposals to amend it, and the new clause which I propose should follow it (Amendment No. 66) strengthen the position of the data protection commissioner particularly with regard to codes of practice. In justifying such action, perhaps I may refer again in greater detail to Article 286 of the treaty establishing the European Community, as inserted and renumbered by the Treaty of Amsterdam, to the effect that the Council, acting together with the Commission and the European Parliament,
"shall establish an independent supervisory body responsible for monitoring the application of such Community Acts"—
as it were, on data protection—
"to Community institutions and bodies and shall adopt any other relevant provisions as appropriate".
Therefore, it looks as though a commissioner will be appointed in Brussels with broad supervisory powers if the majority of member states go ahead, as we would expect, and ratify the Treaty of Amsterdam. It therefore falls to us to ensure that our data protection commissioner has sufficient powers and sufficient authority to be able to work effectively within such an important EU context.
I suggest that strengthening parliamentary control over this area of work is therefore good practice both with regard to the principles of parliamentary democracy and, in our democracy, given a change of government, it enables the Opposition to look at the activities of the commissioner and to flag up certain issues. That is why my two later amendments ask for positive rather than negative resolution.
The Minister and the Solicitor-General already know how important I think it is that we should address codes of practice particularly with regard to data matching which opens the door to blackmail and blacklisting with regard to household indebtedness and trades union involvement. From the point of view of individual freedom, codes of practice on matters such as data matching are safeguards

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with regard to the trend towards centralised computer filing. The immense increase in computer powers in the current decade has made "Big Brother" central filing not only a technical possibility by the linking together of data bases, but also an actuality. "Relational data bases" are a practice nowadays.
I am sorry to say that "data mining", which means searching for and extracting by automated means information of personal importance, has already been engaged in by government agencies for commercial gain. I cite an example which was given to me by a civil servant. In his private capacity he parked his car in a Safeway car park. To his surprise, by the payment of £2.50 Safeway was easily able to obtain his details from the agency which carries the powers of registering and licensing cars. In fact, he had no parking problems. He wrote to the agency asking how it could happen and it was made clear to him that on the payment of £2.50 it was readily possible for the agency to match a numberplate with a name and address and to give out that information to bodies such as supermarkets and carpark agencies.
It is therefore very important that codes of practice are drawn up for data matching and data mining for relational data bases. These and other codes of practice will come within the commissioner codes to be placed before Parliament so that Parliament, the general public and experts in this field of work are consulted in the drafting process under this part of the Bill, and Parliament will have authority to comment on such matters.
Finally, although such codes will not have the force of law they will nevertheless be extremely influential. I have no doubt that they are likely to be taken into account by courts dealing with data protection issues. I beg to move.
Lord Elton: My Lords, before the noble Baroness sits down perhaps she will deal with one point. The noble Baroness said that she was speaking also to Amendment No. 65, which apparently withdraws the requirement for the registrar to report to Parliament. I did not hear the noble Baroness refer to it in her speech. Can she tell us why that is so?
Baroness Nicholson of Winterbourne: My Lords, if the noble Lord, Lord Elton, did not hear me comment on that amendment then I doubt very much that I did so. I shall double check to see why I did not. I suggest that the noble Lord speaks to it himself.
The Earl of Northesk: My Lords, I acknowledge that the Bill poses a thorny problem with respect to issues such as data matching, data sharing or even data mining, to which reference has been made by the noble Baroness, Lady Nicholson. On the one hand, I do not believe that there is any dispute among noble Lords that such practices need to be properly and adequately regulated. On the other hand, it is appropriate to ask whether the Bill as a framework measure is the appropriate place to achieve that objective. I have no objections to the general tenor of
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the arguments advanced by the noble Baroness. Proper and effective codes of practice for data matching are necessary. In so far as I have a difficulty with Amendment No. 71 for example, it is because while it may resolve the specific problem with regard to government departments its remit in the context of a framework Bill is a little too focused. Leaving aside the issue of government being a very big player in information terms, what of the wider world? More importantly, if it is right to regulate data matching in this way surely it must also be right to regulate data sharing, data mining, closed-circuit television and so on by the same mechanism.
I believe that to pursue such a strategy renders the Bill rather more unwieldy than it already is and fixes it in the here and now, thereby denying it flexibility so that it is applicable for a sufficient time in the future. Of course, this leaves the difficulty of how to regulate such practices within government and beyond. I believe that the most serious problem is one of transparency. The public do not really know what goes on with government and other databases. That being so, it gives rise to quite legitimate fears that perhaps data is being processed unlawfully by virtue of these practices. The real issue, therefore, is how to engender that transparency as well as greater public trust in the technologies involved. I tend to share the views of the data registrar on this point. In an ideal world it should be possible to ensure that the practice of data matching or any other current or future computer technologies which have implications for data protection is assessed on a case-by-case basis; that is, as a generality it is conceivable that the problems here can be addressed by reference to specific clauses in individual pieces of legislation as and when it becomes necessary so to do.
It may be that earlier in today's proceedings I enhanced any reputation that I may have had as a member of the awkward squad as far as concerned the Front Bench opposite. I hope that my views on this matter do something to help redress the balance. I wonder whether the Minister has any thoughts to contribute on the suggestion that I have made.
Lord Elton: My Lords, curiosity has drawn me into a debate in which I had not intended to participate. I note that Amendment No. 65 purports to remove subsection (7) from Clause 49. That amendment is grouped with the amendment that we are now discussing, and the noble Baroness said that she was speaking to the whole group. I do not believe that it is germane to the questions that we are asking. I believe that it would be quite appropriate for the registrar to make this report, but, in any case, if no arguments are put forward in support of the amendment I am sure that noble Lords will not accept it.
Baroness Nicholson of Winterbourne: My Lords, the noble Lord, Lord Elton, in his very helpful intervention, may not have had sufficient time to examine Amendment No. 66.
Lord Williams of Mostyn: My Lords, this group of amendments comprises Amendments Nos. 60, 63,

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65, 66, 71 and 77. We had an interesting and informed discussion in Grand Committee on the issues to which the noble Baroness has returned this evening. We pointed to the Bill's requirements for personal data to be processed lawfully and fairly and explained that such processing could only be done lawfully by government departments under the royal prerogative, the authority of statute or common law. We said that we would carefully consider the general approach which the noble Baroness deployed.
There have been very useful discussions between officials, the registrar, the noble Baroness and others. Therefore, we are perfectly content to welcome Amendments Nos. 60, 63, 65, 66 and 77. We believe that there is a difference in respect of Amendment No. 71, and it is certainly not the awkward squad from which I take my endorsement. The noble Earl, who is very knowledgeable on these matters, said in Committee that we needed to have a sensible regime that was not too inflexible and therefore unworkable either for industry or data subjects. We do not believe that we need the provision set out in Amendment No. 71 because we have moved flexibly towards a good deal, if not virtually all, of what the noble Baroness sought. Therefore, I respectfully invite her not to press Amendment No. 71 but to be content with something that is larger than a small mercy; namely, the acceptance, if your Lordships think it appropriate, of Amendments Nos. 60, 63, 65, 66 and 77.
Baroness Nicholson of Winterbourne: My Lords, I am most grateful to the Government. I appreciate the initial response of the Minister when I raised this subject in Grand Committee. I fully appreciate that this subject takes considerable thought. I also recognise the hard work that has gone into this matter and the consultation that the Minister has so kindly enabled me to have. He properly suggests that with the acceptance of Amendments Nos. 60, 63, 65, 66 and 77 Amendment No. 71 becomes superfluous. Therefore, I shall not move that amendment.
Viscount Astor: My Lords, before the noble Baroness sits down, since my name appears against Amendment No. 71 perhaps I may say how grateful
I am to the Government for their response. Certainly, the other amendments go a long way towards addressing the concerns.
On Question, amendment agreed to.
Lord Williams of Mostyn Lord Williams of Mostyn moved Amendment No. 61:
Page 28, line 18, after ("so") insert ("and after such consultation with trade associations, data subjects or persons representing data subjects as appears to him to be appropriate,").
On Question, amendment agreed to.
[Amendment No. 62 not moved.]
Baroness Nicholson of Winterbourne Baroness Nicholson of Winterbourne moved Amendment No. 63:
Page 28, line 28, at end insert—
("() An order under subsection (3)(a) shall describe the personal data or processing to which the code of practice is to relate, and may also describe the persons or classes of persons to whom it is to relate.").
On Question, amendment agreed to.
[Amendment No. 64 not moved.]
Baroness Nicholson of Winterbourne Baroness Nicholson of Winterbourne moved Amendment No. 65:
Page 29, line 4, leave out subsection (7).
On Question, amendment agreed to.
Baroness Nicholson of Winterbourne Baroness Nicholson of Winterbourne moved Amendment No. 66:
After Clause 49, insert the following new clause—
REPORTS AND CODES OF PRACTICE TO BE LAID BEFORE PARLIAMENT
(".—(1) The Commissioner shall lay annually before each House of Parliament a general report on the exercise of his functions under this Act.
(2) The Commissioner may from time to time lay before each House of Parliament such other reports with respect to those functions as he thinks fit.
(3) The Commissioner shall lay before each House of Parliament any code of practice prepared under section 49(3)(a) for complying with a direction of the Secretary of State, unless the code is included in any report laid under subsection (1) or (2).").
On Question, amendment agreed to.
Clause 51 [International co-operation]:
Lord Falconer of Thoroton Lord Falconer of Thoroton moved Amendments Nos. 67 and 68:
Page 30, line 11, leave out from ("Kingdom") to end of line 14 and insert—
("() The Commissioner shall, if so directed by the Secretary of State, provide any authority exercising data protection functions under the law of a colony specified in the direction with such assistance in connection with the discharge of those functions as the Secretary of State may direct or approve, on such terms (including terms as to payment) as the Secretary of State may direct or approve.").
Page 30, line 28, at end insert—
(""data protection functions" means functions relating to the protection of individuals with respect to the processing of personal information.").
On Question, amendments agreed to.
Clause 54 [Confidentiality of information]:
Lord Falconer of Thoroton Lord Falconer of Thoroton moved Amendments Nos. 69 and 70:
Page 31 , line 23, leave out subsections (1) and (2) and insert—
("(1) No person who is or has been the Commissioner, a member of the Commissioner's staff or an agent of the Commissioner shall disclose any information which—

(a) has been obtained by, or furnished to, the Commissioner under or for the purposes of this Act,

(b) relates to an identified or identifiable individual or business, and

(c) is not at the time of the disclosure, and has not previously been, available to the public from other sources,

unless the disclosure is made with lawful authority.

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(2) For the purposes of subsection (1) a disclosure of information is made with lawful authority only if, and to the extent that—

(a) the disclosure is made with the consent of the individual or

of the person for the time being carrying on the business,

(b) the information was provided for the purpose of its being made available to the public (in whatever manner) under any provision of this Act.

(c) the disclosure is made for the purposes of, and is necessary for, the discharge of—

(i) any functions under this Act, or

(ii) any Community obligation,

(d) the disclosure is made for the purposes of any proceedings, whether criminal or civil and whether arising under, or by virtue of, this Act or otherwise, or

(e) having regard to the rights and freedoms or legitimate interests of any person, the disclosure is necessary for reasons of substantial public interest.").

After Clause 56, insert the following new clause—
AMENDMENTS OF CONSUMER CREDIT ACT 1974
(".—(1) In section 158 of the Consumer Credit Act 1974 (duty of agency to disclose filed information) —

(a) in subsection (1) —

(i) in paragraph (a) for "individual" there is substituted "partnership or other unincorporated body of persons not consisting entirely of bodies corporate", and

(ii) for "him" there is substituted "it",

(b) in subsection (2), for "his" there is substituted "the consumer's", and

(c) in subsection (3), for "him" there is substituted "the consumer".

(2) In section 159 of that Act (correction of wrong information) for subsection (1) there is substituted—
"(1) Any individual (the "objector") given—

(a) information under section 7 of the Data Protection Act 1998 by a credit reference agency, or

(b) information under section 158,

who considers that an entry in his file is incorrect, and that if it is not corrected he is likely to he prejudiced, may give notice to the agency requiring it either to remove the entry from the file or amend it."
(3) In subsections (2) to (6) of that section—

(a) for "consumer", wherever occurring , there is substituted "objector", and

(b) for "Director", wherever occurring, there is substituted "the relevant authority".

(4) After subsection (6) of that section there is inserted—
"(7) The Data Protection Commissioner may vary or revoke any order made by him under this section.
(8) In this section "the relevant authority" means—

(a) where the objector is a partnership or other unincorporated body of persons, the Director, and

(b) in any other case, the Data Protection Commissioner."

(5) In section 160 of that Act (alternative procedure for business consumers) —

(a) in subsection (4) —

(i) for "him" there is substituted "to the consumer", and

(ii) in paragraphs (a) and (b) for "he" there is substituted "the consumer" and for "his" there is substituted "the consumer's", and

(b) after subsection (6) there is inserted—

"(7) In this section "consumer" has the same meaning as in section 158." ").
On Question, amendments agreed to.
[Amendment No. 71 not moved.]
Clause 60 [Orders, regulations and rules]:
Lord Williams of Mostyn Lord Williams of Mostyn moved Amendment No. 72:
Page 34, line 29, leave out ("13(5)") and insert ("13(2A)(b)").
On Question, amendment agreed to.
Baroness Nicholson of Winterbourne Baroness Nicholson of Winterbourne moved Amendment No. 73:
Page 34, line 32, at end insert—
("section 31(3),")
The noble Baroness said: My Lords, I spoke to this amendment earlier on Amendment No. 76. It is a request to the Government that approval should be sought by Parliament rather than that codes of practice, particularly with regard to journalism, literature and art should go through by negative resolution. I ask the Government to comment on the two amendments.
Lord Falconer of Thoroton: My Lords, Amendments Nos. 73 and 76 were grouped at an earlier stage. Amendment No. 73 is being moved now, but there is no difficulty over that.
It is essentially a matter of judgment whether a particular power to make subordinate legislation should be subject to negative resolution or affirmative resolution. The general approach adopted in the Bill is that the affirmative resolution procedure is needed where the subordinate legislation affects individuals' rights—for example, subject access exemption orders— or otherwise significantly affects the basic data protection regime; for example, the specification of the descriptions of processing subject to preliminary assessment under Clause 21.
I do not believe that the power provided by Clause 31(3) falls into either of those categories. It is essentially a procedural mechanism for establishing whether or not particular codes of practice relevant to the question whether publication of special purposes material is in the public interest. The order-making power does not of itself determine whether publication is in the public interest. It merely allows the Secretary of State to say that such and such a code may be relevant to the question. This is a very limited function, and I am not absolutely persuaded that it needs to be subject to the affirmative resolution procedure.
The Select Committee on Delegated Powers and Deregulation of your Lordships' House has considered the powers provided by the Bill to make subordinate legislation. In its report of 4th February it did not express a view on the power in Clause 31(3). This suggests that the Select Committee is satisfied that negative resolution is appropriate. Nonetheless, since the noble Baroness clearly feels that this is a matter of some importance, I am pleased to tell her that the Government can accept these amendments.
Baroness Nicholson of Winterbourne: My Lords, I am grateful to the Solicitor-General for his exceptional attention to the Select Committee's pronouncements. I hope that he will continue to think about its pronouncements on Clause 28(4) later in the proceedings.
On Question, amendment agreed to.
Lord Williams of Mostyn Lord Williams of Mostyn moved Amendment No. 74:
Page 34, line 34, at end insert ("or paragraph 3A of Schedule 7").
On Question, amendment agreed to.
[Amendment No. 75 not moved.]
Baroness Nicholson of Winterbourne Baroness Nicholson of Winterbourne moved Amendment No. 76:
Page 34, leave out line 42.
On Question, amendment agreed to.
Baroness Nicholson of Winterbourne Baroness Nicholson of Winterbourne moved Amendment No. 77:
Page 34, line 42, at end insert—
("section 49(3)(a),").
On Question, amendment agreed to.
Clause 62 [Index of defined expressions]:
Lord Williams of Mostyn Lord Williams of Mostyn moved Amendment No. 78:
Page 36, line 44, column I. leave out ("personal") and insert ("information or").
The noble Lord said: My Lords, in Committee we improved the drafting of the definition of processing by substituting "information or data" for "personal data", wherever the latter term appeared. Those changes were not carried through to the index of definitions. This technical amendment is designed to put that right. I beg to move.
On Question, amendment agreed to.
Lord Williams of Mostyn Lord Williams of Mostyn moved Amendments Nos. 79 to 83:
Page 36. line 44, column 2, at end insert ("and paragraph 3 of Schedule (Transitional relief)").
After Clause 62, insert the following new clause—
MODIFICATIONS OF ACT HAVING EFFECT AFTER 23RD OCTOBER 2001 BUT BEFORE 24TH OCTOBER 2007
(". During the period beginning with 24th October 2001 and ending with 23rd October 2007, the provisions of this Act shall have effect subject to the modifications set out in Schedule (Modifications of Act).").
After Clause 62, insert the following new clause—
TRANSITIONAL PROVISIONS AND SAVINGS
(". Schedule (Transitional provisions and savings) (which contains transitional provisions and savings) has effect.").
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Before Schedule 10, insert the following new schedule —
("SCHEDULE
MODIFICATIONS OF ACT
1. After section 13 there is inserted—
"Rights of data subjects in relation to eligible manual data.
13A.—(1) A data subject is entitled at any time by notice in writing—

(a) to require the data controller to rectify, block, erase or destroy eligible manual data which are inaccurate, or

(b) to require the data controller to cease holding eligible manual data in a way incompatible with the legitimate purposes pursued by the data controller.

(2) A notice under subsection (1)(a) or (b) must state the data subject's reasons for believing that the data are inaccurate or, as the case may be, his reasons for believing that they are held in a way incompatible with the legitimate purposes pursued by the data controller.
(3) If the court is satisfied, on the application of any person who has given a notice under subsection (1) which appears to the court to be justified (or to be justified to any extent) that the data controller in question has failed to comply with the notice, the court may order him to take such steps for complying with the notice (or for complying with it to that extent) as the court thinks fit.
(4) In this section—
"eligible manual data" means eligible manual data as defined in paragraph 1(2) of Schedule (Transitional relief) which were held immediately before 24th October 1998, but does not include data to which the exemption in paragraph 14 of that Schedule applies;
"inaccurate" shall he construed in accordance with section 12(5)."
2. In section 14(1), for "13" there is substituted "13A".
3. In section 31—

(a) in subsection (2) for "section 13" there is substituted "sections 13 and 13A", and

(b) in subsection (4) for "or 13(6)" there is substituted ", 13(6) or 13A(3)".

4. In section 33 for "section 12" there is substituted "sections 12 and 13A".
5. In paragraph 9 of Part 11 of Schedule 1, the word "or" at the end of paragraph (c) is omitted and after paragraph (d) there is inserted "or
(e) he contravenes section 13A by failing to comply with a notice given under subsection (1) of that section to the extent that the notice is justified.").
Before Schedule 10, insert the following new schedule—
("SCHEDULE
TRANSITIONAL PROVISIONS AND SAVINGS
Interpretation
1. In this Schedule—
"the 1984 Act" means the Data Protection Act 1984;
"the old principles" means the data protection principles within the meaning of the 1984 Act;
"the new principles" means the data protection principles within the meaning of this Act.
Effect of registration under Part 11 of 1984 Act
2.—(1) Subject to sub-paragraph (2), any person who, immediately before the commencement of Part III of this Act—

541

(a) is registered as a data user under Part II of the 1984 Act, or

(b) is treated by virtue of section 7(6) of the 1984 Act as so registered,

is exempt from sections 16(1) and 21(5) of this Act until the end of the period at the end of which, if section 8 of the 1984 Act had remained in force, the registration would have expired unless renewed.
(2) Any application for registration as a data user under Part II of the 1984 Act which is received by the Commissioner before the commencement of Part III of this Act (including any appeal against a refusal of registration) shall be determined in accordance with the old principles and the provisions of the 1984 Act.
(3) If a person falling within paragraph (b) of sub-paragraph (1) receives a notification under section 7(1) of the 1984 Act of the refusal of his application, sub-paragraph (1) shall cease to apply to him—

(a) if no appeal is brought, at the end of the period within which an appeal can be brought against the refusal, or

(b) on the withdrawal or dismissal of the appeal.

(4) The Commissioner shall include in the register maintained under section 18 an entry in respect of each person who is exempt from section 16(1) by virtue of sub-paragraph (1); and each entry shall consist of the particulars which, immediately before the commencement of Part III of this Act, were included (or treated as included) in respect of that person in the register maintained under section 4 of the 1984 Act.
(5) For the purposes of section 19(1), a person who is exempt from section 16(1) by virtue of sub-paragraph (1) shall be taken to be a person in respect of whom an entry as a data controller is for the time being included in the register maintained under section 18; and notification regulations under Part IV of this Act may make provision modifying the duty referred to in section 19(1) in its application to such persons.
(6) Where, at the end of the period referred to in sub-paragraph (1), subsection (5) of section 21 applies to a person who was previously exempt by virtue of that sub-paragraph, that subsection shall have effect with the omission of the words from "and either" onwards.
(7) Notification regulations under Part III of this Act may make further transitional provision in connection with the substitution of Part III of this Act for Part II of the 1984 Act (registration), including provision modifying the application of provisions of Part III in transitional cases.
Rights of data subjects
3.—(1) The repeal of section 21 of the 1984 Act (right of access to personal data) does not affect the application of that section in any case in which the request (together with the information referred to in paragraph (a) of subsection (4) of that section and, in a case where it is required, the consent referred to in paragraph (b) of that subsection) was received before the day on which the repeal comes into force.
(2) Sub-paragraph (1) does not apply where the request is made by reference to this Act.
(3) Any fee paid for the purposes of section 21 of the 1984 Act before the commencement of section 7 in a case not falling within sub-paragraph (1) shall be taken to have been paid for the purposes of section 7.
4. The repeal of section 22 of the 1984 Act (compensation for inaccuracy) and the repeal of section 23 of that Act (compensation for loss or unauthorised disclosure) do not affect the application of those sections in relation to damage or distress suffered at any time by reason of anything done or omitted to be done before the commencement of the repeals.
5. The repeal of section 24 of the 1984 Act (rectification and erasure) does not affect any case in which the application to the court was made before the day on which the repeal comes into force.
6. Subsection (3)(b) of section 12 does not apply where the rectification, blocking, erasure or destruction occurred before the commencement of that section.
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Enforcement and transfer prohibition notices served under Part V of 1984 Act
7.—(1) If, immediately before the commencement of section 38—

(a) an enforcement notice under section 10 of the 1984 Act has effect, and

(b) either the time for appealing against the notice has expired or any appeal has been determined,

then, after that commencement, to the extent mentioned in sub-paragraph (3), the notice shall have effect for the purposes of sections 39 and 45 as if it were an enforcement notice under section 38.
(2) Where an enforcement notice has been served under section 10 of the 1984 Act before the commencement of section 38 and immediately before that commencement either—

(a) the time for appealing against the notice has not expired, or

(b) an appeal has not been determined,

the appeal shall be determined in accordance with the provisions of the 1984 Act and the old principles and, unless the notice is quashed on appeal, to the extent mentioned in sub-paragraph (3) the notice shall have effect for the purposes of sections 39 and 45 as if it were an enforcement notice under section 38.
(3) An enforcement notice under section 10 of the 1984 Act has the effect described in sub-paragraph (1) and (2) only to the extent that the steps specified in the notice for complying with the old principle or principles in question are steps which the data controller could be required by an enforcement notice under section 38 to take for complying with the new principles or any of them.
8.—(1) If, immediately before the commencement of section 38—

(a) a transfer prohibition notice under section 12 of the 1984 Act has effect, and

(b) either the time for appealing against the notice has expired or any appeal has been determined,

then, on and after that commencement, to the extent specified in sub-paragraph (3), the notice shall have effect for the purposes of sections 39 and 45 as if it were an enforcement notice under section 38.
(2) Where a transfer prohibition notice has been served under section 12 of the 1984 Act and immediately before the commencement of section 38 either—

(a) the time for appealing against the notice has not expired, or

(b) an appeal has not been determined,

the appeal shall be determined in accordance with the provisions of the 1984 Act and the old principles and, unless the notice is quashed on appeal, to the extent mentioned in sub-paragraph (3) the notice shall have effect for the purposes of sections 39 and 45 as if it were an enforcement notice under section 38.
(3) A transfer prohibition notice under section 12 of the 1984 Act has the effect described in sub-paragraph (1) or (2) only to the extent that the prohibition imposed by the notice is one which could be imposed by an enforcement notice under section 38 for complying with the new principles or any of them.
Notices under new law relating to matters in relation to which 1984 Act had effect
9. The Commissioner may serve an enforcement notice under section 38 on or after the day on which that section comes into force if he is satisfied that, before that day, the data controller contravened the old principles by reason of any act or omission which would also have constituted a contravention of the new principles if they had applied before that day.
10. The Commissioner may serve an information notice under section 41 on or after the day on which that section comes into force if he has reasonable grounds for suspecting that, before that day, the data controller contravened the old principles by reason of any act or omission which would also have constituted a contravention of the new principles if they had applied before that day.

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Warrants issued under 1984 Act
11. The repeal of Schedule 4 to the 1984 Act does not affect the application of that Schedule in any case where a warrant was issued under that Schedule before the commencement of the repeal.
Complaints under section 36(2) of 1984 Act and requests for assessment under section 39
12. The repeal of section 36(2) of the 1984 Act does not affect the application of that provision in any case where the complaint was received by the Commissioner before the commencement of the repeal.
13. In dealing with a complaint under section 36(2) of the 1984 Act or a request for an assessment under section 39 of this Act, the Commissioner shall have regard to the provisions from time to time applicable to the processing, and accordingly—

(a) in section 36(2) of the 1984 Act, the reference to the old principles and the provisions of that Act includes, in relation to any time when the new principles and the provisions of this Act have effect, those principles and provisions, and

(b) in section 39 of this Act, the reference to the provisions of this Act includes, in relation to any time when the old principles and the provisions of the 1984 Act had effect, those principles and provisions.").

On Question, amendments agreed to.
Schedule 10 [Minor and consequential amendments]:
Lord Falconer of Thoroton Lord Falconer of Thoroton moved Amendments Nos. 84 and 85:
Page 56, line 31, leave out ("sub-paragraph (a) of').
Page 56, leave out lines 33 to 36 and insert—

(""Data protection

14.(a) The Data Protection Commissioner appointed under section 6 of the Data Protection Act 1998;

(b) the Data Protection Tribunal constituted under that section, in respect of its jurisdiction under section 46 of that Act.")

On Question, amendments agreed to.
Clause 64 [Short title, commencement and extent]:
Lord Williams of Mostyn Lord Williams of Mostyn moved Amendments Nos. 86 and 87:
Page 37, line 17, at end insert—
("() sections 1 to 3,").
Page 37, line 20, leave out ("section 60,") and insert ("sections 60 to 62,").
The noble Lord said: My Lords, this group consists of Amendments Nos. 86 and 87. These amendments are technical. They bring the Bill's definition provisions into force on Royal Assent. That clarifies the basis upon which we will be making subordinate legislation once the Bill is passed but before it comes fully into force. I beg to move.
On Question, amendments agreed to.

Criminal Justice (International Co-operation) (Amendment) Bill [H.L.]
7.40 p.m.
Lord Evans of Parkside: My Lords, I beg to move that this Bill be now read a second time. The Bill amends Section 12 of the Criminal Justice (International Co-operation) Act 1990. Before turning to why I believe
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it needs amending in the way this Bill proposes, it may be helpful to the House if I explain what Section 12 of the principal Act does.
The section is concerned with precursor chemicals; that is, chemicals which are used in the manufacture of controlled drugs. The term "controlled drugs" has its usual meaning as those drugs which come within the scope of the Misuse of Drugs Act 1971.
Section 12 makes it an offence to manufacture or supply precursor chemicals, of which 22 are identified in the Act, knowing or suspecting that they are for the unlawful production of controlled drugs. The intention, therefore, is to prevent producers of illicit controlled drugs from obtaining the ingredients they need to make them.
There is also a system of licensing and registration for companies trading in precursor chemicals, which have many legitimate industrial uses besides the production of controlled drugs. This system regulates the manufacture and distribution of the chemicals, helps prevent their diversion and monitors international trade in them. It is replicated throughout the European Union by EC legislation and is mirrored in the other countries who are also parties to the 1988 United Nations convention against the illicit traffic in narcotic drugs and psychotropic substances.
For many years, and even before formal controls were introduced on precursor chemicals, the United Kingdom authorities have had a constructive relationship with the chemical industry. But in my view in one respect the industry has not had quite the protection it deserves when it has helped the authorities.
Consider the situation where a manufacturer of a precursor chemical, suspicious that an order he has received is destined for the unlawful production of a controlled drug, notifies the police of his concerns. The police, on considering the matter, take the view that it is indeed a suspicious order but that there is insufficient evidence to charge the person who has ordered the chemical with an offence. To secure sufficient evidence, they suggest that the manufacturer fulfils the order by supplying the chemical. But here is the rub. Under the law as it stands, as soon as the manufacturer supplies the chemical he commits an offence. It is of no help to him that he has done so at the request of the police as a good citizen. That cannot be right.
I understand that there is in practice an administrative arrangement which the police and the Crown Prosecution Service can employ in individual cases to give manufacturers who assist in such a way reassurance that they will not be prosecuted. I do not believe, however, that that is enough. What my Bill does is to provide a statutory safeguard. In terms, it states that:
"A person does not commit an offence … if he manufactures or … supplies the scheduled substance with the express consent of a constable".
My Bill provides a statutory safeguard to all those who are assisting the authorities in the continuous fight against illegal drug production.

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The responsible trade deserves this safeguard and through this small and modest Bill would obtain it. I commend it to the House.
Moved, That the Bill be now read a second time.—(Lord Evans of Parkside.)
7.43 p.m.
Lord Thomas of Gresford: My Lords, I am most grateful to the noble Lord, Lord Evans of Parkside, for introducing the Bill and for the careful way in which he explained its purpose. It is interesting to note that it took until the 1990 Act was passed to outlaw the production of precursor chemicals for the making of drugs. Yet it was as long ago as 1874 that a Mr. C. R. Alder Wright, in London, boiled morphine with acetic anhydride, which is the leading drug in the schedule to the Act, and produced diamorphine. Some years later, that was termed by a German scientist as heroin, being, as he thought, heroic in its attributes. That is one of the ways in which today's scourge in the drugs industry has been created.
Although the Bill is simple, it appears to provide protection for agents provocateurs, Therefore, one requires a little care in approaching its provisions. I recall a case some years ago from Hong Kong called Somchai Liangsiprasert, where the appellant who appeared in the Privy Council here was a Thai national. He was persuaded by an agent provocateur, the equivalent of the noble Lord's constable, a DEA agent in the United States, to hand over a substantial quantity of heroin. That heroin, handed over in Bangkok, was immediately taken under armed US Marine Guard to the American Embassy and from the embassy was taken by plane by agents into the United States. Mr. Somchai Liangsiprasert was charged with conspiracy to import the drugs into the United States. Of course, they went in under the auspices of the United States Government. He was subsequently convicted of conspiracy to traffic in drugs in Hong Kong because he went to Hong Kong to collect his money.
One of the possible side-effects of this simple amendment to the Act is that it could make it impossible to bring conspiracy charges against the person who supplied the drugs to the agent provocateur, because if the agent provocateur does not commit an offence under the provisions of the Bill it may be that conspiracy charges would not be available to the prosecution. One would need to look at that matter with care.
When one enters into consideration of such a delicate area of the criminal law, a certain amount of care must be taken. We will provide that as the Bill goes through its proper stages.
7. 47 p.m.
Baroness Anelay of St. Johns: My Lords, I, too, thank the noble Lord, Lord Evans of Parkside, for introducing the Bill with such clarity. It was most helpful to the House. We on these Benches support efforts to prevent and prosecute the abuse and misuse of drugs. We did so while in government and were responsible for introducing the original 1990 Act which
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the noble Lord seeks to amend. We continue to support any attack on the trafficking in drugs. Drugs trafficking is indeed a menace to society. However, I also agree that where there is consensus between the main parties on action which should be taken it is sometimes perhaps all the more important to test the reasons why we are making changes in order to ensure that what we achieve is what we are intending. We must achieve the right policy intention underlying the proposed legislative changes.
Therefore, I have some questions to put to the noble Lord, Lord Evans, in the spirit of what I hope is helpful inquiry. Because I intend to be helpful, I gave advance notice of the general thrust of my questions. I note that the purpose of the Criminal Justice (International Co-operation) Act 1990 was to enable the United Kingdom to co-operate with other countries in investigations and criminal proceedings to implement the 1988 Vienna Convention against illicit trafficking of narcotic drugs and psychotropic substances. It is therefore known as the Vienna Convention. It was also implemented to provide for seizure and detention and forfeiture of drug trafficking money which was imported or exported in cash. It had that dual objective.
The noble Lord has explained that Section 12(1) of that Act has a specific function. It makes it illegal for someone to manufacture a substance which is listed in the schedule accompanying the Act or to supply that substance to another person if he knows or suspects that the substance will be used for the unlawful production of a controlled drug.
The list of those specified substances is contained in the second table in Schedule 2 to the 1990 Act. Therefore, it includes such things as potassium permanganate and sulphuric acid—items which can be found in any school laboratory and can he used innocently. But, as the noble Lord pointed out, they can be used as part of the processes, as precursors, of the production of illegal drugs. That use would then be illegal under the 1990 Act.
The noble Lord explained why he feels that there is a loophole in the 1990 Act because manufacturers innocently going about their business may find that, quite unintentionally, they are being caught up in illegal trade as someone is trying to use the substances for illegal purposes. They try to be helpful to the police in sorting out the illegal side of it and securing a prosecution. At present, the problem is that they appear to be trapped and find themselves guilty of an absolute offence.
I read the discussions in Hansard on the original 1990 Bill. Mr. Butler raised that point and asked:
"If it becomes illegal knowingly to supply precursor substances, what happens if a manufacturing company which trades licitly has told the authorities of its suspicions and the authorities allow it to supply the chemicals to track down the clandestine laboratories? Would that manufacturing company still be liable to prosecution?"
The reply was given by my noble friend Lord Patten, who at that stage was a Member of another place. On advice he answered that no,
"large manufacturing undertakings involved at the beginning of the manufacturing process of precursor chemicals would not be liable in those circumstances".

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It was the best understanding at the time that there was an administrative procedure by which the manufacturers would not become liable to prosecution in the circumstances which the noble Lord, Lord Evans, outlined this evening. I was therefore interested that the noble Lord said that it is now understood that such companies would be liable. I listened carefully to his explanation and I shall read it in Hansard. Moreover, I shall listen with interest to what the Minister has to say on the subject.
Of course, I agree that it would be wrong to have any situation created by statute whereby an innocent manufacturer was made guilty of an offence and had to rely on an administrative decision only not to prosecute if that were the case and we found that people were falling foul of the law. But if that is not the case and no one has got into difficulties, perhaps amendments are not required. We must consider that issue.
The question to which I have addressed myself is whether this Bill marks a shift away from the original policy intention underlying the 1990 Act, perhaps unwittingly. Certainly, having heard the noble Lord's explanation, I feel that any such shift would be unwitting. However, we need to be aware of our objectives and the possible consequences of what we do in relation to any amendment to the statute.
So far we have heard from the noble Lord, Lord Thomas of Gresford, that he has reservations as regards the Bill because he feels that it may open the door to agents provocateurs having the opportunity to exploit its provisions. The amendment provides that the express consent of a constable is sufficient to enable someone to escape prosecution. I am concerned that the way in which the Bill is phrased gives an opportunity for perhaps another use of the amendment other than that which the noble Lord seeks to achieve.
The Bill introduces police powers in such a way that the law, if it were amended by this Bill, could be used by the police to extend further their activities in the setting up of sting operations or using people as agents provocateurs, as the noble Lord, Lord Thomas of Gresford, said. I ask the Minister whether that is an unintended but possible consequence of the amendment. If it is unintended, is that acceptable? Is it argued that the Bill is needed in order to be able to obtain convictions which cannot be achieved otherwise? Do the Government have examples of occasions on which the prosecution of criminal activities has been frustrated for want of this amendment? Do we expect in future that the police will set up sting operations from scratch, seeking to entrap criminals into placing orders so that they can track down a line of production and sale of illicit drugs?
Entrapment is a delicate area. Perhaps the Minister will address himself to how far one should be able to promote it within a Bill. I note that entrapment is a defence in the United States but not so here. Therefore, I ask the Government what is their view about the propriety of using sting operations and just how extensive their use should be.
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Does every police force in the country still have, as I believe was the case in 1990, a police officer who is a dedicated precursor chemical monitor whose job it is to keep in close contact with all licit chemical manufacturers on his patch? If so, do the Government expect that in operational terms they will be the officers who will grant the consent which is to be introduced by this Bill? Or would it be members of the drug squad or any constable at all of any police force in the country?
These are broad issues of principle and practice which are raised by the Bill and which we should consider seriously. I should be grateful to either the Minister or the noble Lord, Lord Evans of Parkside, for a response to those matters.
Finally, there is one aspect of the Bill which causes me concern. It may be that the Minister or the noble Lord can answer the question satisfactorily. If not, perhaps the noble Lord, Lord Evans, will consider the matter between now and the Committee stage because it is a matter about which I am considering tabling an amendment.
I refer the House to line 10 of the Bill and the phrase,
"with the express consent of a constable".
Why is the terminology of the 1985 misuse of drugs regulations not used? Those regulations contain the phrase,
"a constable when acting in the course of his duty as such".
Would it not be better that that definition should be on the face of the Bill, given the sensitive and potentially extensive use of the amendment?
I suspect that we have all read reports of alleged corruption within the Metropolitan Police and the recycling of drugs by police officers, something I know the Metropolitan Police much regret. Therefore, is it right that we should agree to give a blanket right to a constable to grant consent for the manufacture or supply of scheduled substances? Surely it would be far better to make it clear right from the beginning that such consent can only give rise to legal activity if it is given while he is acting in the course of his duty.
Once again, I thank the noble Lord for introducing the Bill and of course we shall not oppose its Second Reading.
7.59 p.m.
Lord Williams of Mostyn: My Lords, I am grateful to my noble friend Lord Evans of Parkside for his introduction and explanation. We welcome the Bill. We believe that there should be a statutory safeguard against prosecution for those manufacturers and suppliers who assist in enforcement operations. It is perfectly true that the Crown Prosecution Service can, by arrangement with the police, give an undertaking that a manufacturer or supplier will not be prosecuted. We believe that that should be on a proper statutory basis.

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The fact that this would then be provided for on a statutory basis as opposed to an administrative basis does not, therefore, alter the situation to which the noble Lord, Lord Thomas of Gresford, and the noble Baroness, Lady Anelay of St Johns, referred. If one has administrative arrangements, the opportunity for misdeed and wrong behaviour is no greater than if one has a statutory basis.
I turn now to one or two points of detail that have been raised. The noble Baroness asked why the reference should not be to a constable in the execution of his duty. The precedents are in the Drug Trafficking Act 1994 where Section 51 relates particularly to a disclosure which is a defence if a prospective defendant makes disclosure before a particular act and,
"the act is done with the consent of the constable".
There is no restriction there to a constable acting in the execution of his duty; nor in the very serious circumstances of disclosure about the control of terrorists' funds. Again, the phrase is,
"acting with the express consent of a constable".
One can see the point. It is very difficult to expect a manufacturer or supplier who is trying to assist law protectors and law enforcers to establish—and I am not quite sure how this could be done—that the constable is, indeed, acting in the execution of his duty. If the constable is not, and acts in the corrupt way specified by the noble Baroness, criminal sanctions and internal disciplinary sanctions can be taken against him.
We do not believe that there should be too much detail in that respect. Many of these decisions must be made operationally by chief constables. We believe that a chief constable running his force properly must have a margin of discretion about who gives the authority in particular circumstances. It may well be an officer of relatively junior rank because, very often, they have enormous expertise on drug squads. In response to an observation made by the noble Baroness, I should point out that most police forces have specialist officers whose duties include the monitoring of precursor chemicals.
Entrapment, "sting" operations and the use of agents provocateurs are matters which need to be carefully defined. It is manifest from Home Office and ACPO guidelines that police officers, undercover officers, or informants should not act as agents provocateurs—that is, those who incite or counsel others to commit a crime which would not otherwise have been committed. Ultimately, if the police overstep the mark, the prosecution has to take a view and the courts can also take their own view, which they do quite robustly, about abuse of process.
However, it seems to me that that is different from what might be called, in the argot, a "sting" operation because they vary infinitely. Some sting operations are perfectly legitimate and lawful. If someone is offering to sell stolen goods, or large quantities of drugs, I personally see no objection in morality, in principle or
550
in law to an officer growing his hair and a beard, placing a ring in his nose or ear or any other appropriate part of his body—or, indeed, any inappropriate part of his body—and pretending to be Joe Bloggs. He will not go along and say, "By the way, I am Constable 343 Jones"—or indeed Williams—"will you please sell me these drugs?" Therefore, one has to be quite careful when talking about entrapment, "sting" operations and agents provocateurs. Police forces have to be astute and the CPS has to be very careful, as indeed do the courts, about abuse of process. As I said, the use of anyone as an agent provocateur is forbidden.
We believe that this is a useful Bill, which tidies up the law, because it gives protection to those who want to behave responsibly, lawfully and properly in assisting the police in what is a very dangerous area. I agree with what has been said. When one has a Bill which seems to have the approval of all corners of the House, that is the time when one needs to be particularly careful. As I said, we welcome the Bill and I am grateful to my noble friend for its introduction.
8.4 p.m.
Lord Evans of Parkside: My Lords, I should like to express my gratitude to the noble Lord, Lord Thomas of Gresford, and to the noble Baroness, Lady Anelay of St Johns for the comments that they have made on the Bill and for their broad welcome to it. I am especially grateful to the noble Baroness for giving notice of the points which she intended to raise. I should also like to thank my noble friend the Minister for explaining the Government's attitude. Of course, I shall accept the advice of my noble friend in that respect.
On the question of qualifying the definition of constable, I believe that my noble friend the Minister has given very sound reasons for using previous practice, which I certainly accept. The idea of the provision is that companies should feel comfortable when they are assisting the police in an operation to catch illicit drug manufacturers. To require them to satisfy themselves that the constable is executing his duty could, I believe, be counter-productive.
I understand and sympathise with the concern of the noble Baroness over sting operations. I also understand the noble Lord's anxiety about the use of agents provocateurs. However, it seems that they are worries which could apply to a range of operations and not just those involving precursor chemicals. I was reassured to hear that there is general guidance making it clear that police officers should not in any operations act as agents provocateurs. Of course, the final safeguard must be the courts.
I shall read most carefully what the noble Baroness and the noble Lord have said. I shall, indeed, study the Hansard report most carefully. If necessary, I shall be only too happy to consult with them and my noble friend the Minister as to how we should address such issues in Committee. I believe that the Committee stage could prove to be most interesting.

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I earlier referred to the longstanding and constructive relationship which the UK enforcement authorities and the chemical industry have had. My Bill would help ensure that that important relationship endures into the future. It is important that it should if the pernicious business of unlawful manufacture of controlled drugs is going to be successfully combated. The Bill would provide just that hit of extra confidence for the industry. It is important that the industry should have that confidence given to it by Parliament. I very much hope that the Bill will find its way on to the statute book. I ask the House to give the Bill a Second Reading.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Transport Policy and Railway Land
8.6 p.m.
Lord Cadman Lord Cadman rose to ask Her Majesty's Government whether plans for an integrated transport policy are being forestalled by the continuing disposal of railway land.
The noble Lord said: My Lords, the subject of my Question has arisen as a direct consequence of the privatisation of the railways, resulting in the new rail freight companies' success in attracting new business. Is this success to be frustrated by parts of the railway estate disappearing before their very eyes?
Following the passage of the Railways Act 1993, decisions were taken by British Rail as to which parts of its estate were to be regarded as operational or not. All operational land was, at the appropriate time, vested in the infrastructure provider, Railtrack Plc. Non-operational land remained in the hands of British Rail and is administered by its subsidiary company, Rail Property Limited. Much of this non-operational land consists of parts of long-closed routes and structures, some of which carry substantial liabilities. One can cite here as an example the architecturally elegant stone-built viaduct that dominates the village of Pensford, just south of Bristol, which was part of a route that served the once quite important Somerset coalfield.
Since British Rail had found itself unable to operate an economic freight service, much of that non-operational land also consisted of old station goods yards, marshalling yards, redundant junctions and sidings, much of which lies adjacent to existing operational routes. Unbelievably included were a flyover at Nuneaton and an underpass at Reading, both of which had to be withdrawn from potential disposal due to their strategic importance.
It was recognised some time ago that some sites which were being disposed of could well have a future role to play. Sites as far apart as Yatton in Somerset, Hereford and Workington in Cumbria have been offered for sale by RPL, despite their being identified as having freight use potential.
Much of the problem lies in the fact that in many cases the redevelopment value of a site for housing, a supermarket or whatever exceeds that for rail freight purposes. The recent episode at Battersea illustrates this
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point well. It seems strange, does it not, that the industry is being invited to bid for sites—albeit assisted perhaps by a freight facilities grant—that have been put up for sale by a government company so that they can be retained within the railway estate despite the Government's stated aim that they wish to encourage the transfer of freight from road to rail?
It would appear that Department of Transport Ministers and officials still do not seem to realise that the potential for increased rail freight business is real and impending. There will be a need in the future for loading and storage facilities to be provided adjacent to existing railway routes and close enough to prospective customers for this potential to be realised. Here we have a government agency putting many sites that could be suitable up for sale.
With regard to redundant routes, some of these could well be considered for eventual reuse, especially in the vicinity of densely trafficked lines near known pinch points or to provide a diversionary route while serious work is undertaken to a main line, for example the west coast main line. As a topical example, in France abandoned lines are literally left to rot, with hardly any redevelopment taking place. This Easter in eastern France a pretty busy junction is to be closed down to enable a river bridge to be replaced. The SNCF has been able to set up a diversionary route to enable some traffic to avoid the area by reopening a route that was closed down some years ago. The fact that some track relaying has been involved on this route demonstrates the importance attached here to providing some continuity of service and the relative ease with which such a route can be put back into service.
It has been suggested that the department is constrained by the provisions of the Transport Acts of 1962 and 1968 which, it seems, required BR to act commercially and obliged it to obtain the best possible price for surplus assets. That may be so, but Section 27(1) of the 1962 Act states,
"The Minister may, after consultation with any Board, give to that Board directions of a general character as to the exercise and performance by the Board of their functions in relation to matters which appear to him to affect the national interest".
Section 28(4) of the same Act appears to allow the Minister to direct that under certain circumstances directions may so be given, notwithstanding that they may make it necessary for the board of British Rail to dispose of assets at a loss. Therefore perhaps there is some scope here.
It has also been stated that the Government have committed themselves to the public expenditure programme of the previous administration. Amazingly, these sales are deemed to be part of this programme and therefore all kinds of excuses are made to ensure that they take place. Obviously someone, somewhere needs the money. Of course all this is bad news for the industry and integrated transport generally and could possibly be regarded as a shambles. I hope that the Government will set up some kind of strategic rail authority. It is a pity that that is not up and running now because it should have the power to sort out situations like this.
The trouble is that once these sites are disposed of it will be well nigh impossible to get them back or even to replace them. Local authorities have a vital role to play here. It is imperative that they identify quickly within their planning programmes the need to provide for rail freight facilities. Strategic railway sites, whether for freight or passenger use, must be safeguarded so that rail can play its full part in any integrated policy. I wonder what guidance the Government can give to local authorities here because this is important.
It is encouraging that Rail Property Limited has agreed to circulate to all interested parties in future details of any sales as particulars become available. This will perhaps enable potential rail interests to get together with local authorities and convince them that this or that area has rail potential and so perhaps can be prevented from being redeveloped via the planning process and thus not lost to the rail industry.
I hope that the noble Baroness on the Front Bench can give us some encouragement this evening. I take this opportunity of thanking all those noble Lords who will take part in this debate.
8.13 p.m.
Lord Berkeley: My Lords, I start by congratulating the noble Lord, Lord Cadman, on initiating this interesting debate. It is interesting to me. I declare an interest as chairman of the Rail Freight Group. It is therefore appropriate that I concentrate my remarks on rail freight and debate how rail freight may or may not be affected by the land issue that the noble Lord, Lord Cadman, so eloquently discussed. He has obviously spent much time reading sales prospectuses of various sites which the property board still has on offer. Those prospectuses are glossy but one does not have much time to act in that regard.
I believe that rail freight is central to delivering the Government's transport policy. On the Government's own estimates, road congestion on many routes from, say, Preston to Maidstone will probably be gridlocked for many hours of the day within 15 years. However, freight will still have to be moved around. Much of it will still go by road as there is no practical alternative—certainly, no one would wish to change that—and road travel has a major role to play. However, much long distance freight can be carried by rail. That process has already started. After years of decline, rail freight traffic grew by 15 per cent. last year, excluding coal. Although the tonnage of coal has decreased, the tonnage carried per kilometre has increased as for some reason it is imported into Hunterston to be burnt in Didcot power station which is quite a long journey by rail. Of course that is good for the railways.
Last year, as part of the roads review, we made a suggestion to the Minister of Transport as regards lorries travelling over 200 kilometres. That is about the break-even distance between road and rail. Some 50 per cent. of the lorry freight in this country is carried on journeys of over 200 kilometres. We suggested that a proportion of those longer journeys could use the railways. We asked whether that would be possible and
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what effect it would have. We calculated that if half of those longer journeys were made by rail that would require an extra thousand freight trains a day. That is roughly the same number as EWS runs at the moment. Connex South Eastern runs 2,000 trains a day. Railtrack has said that that goal is perfectly achievable given investment in the rolling stock and in the infrastructure. It would obviously have an enormously beneficial effect on road traffic congestion.
What is this new traffic we are discussing? I have mentioned coal. Aggregates and other bulk traffic take up an enormous share of rail freight. Rail freight's growth or decline is dependent on the economy and many outside influences, not the least of which is the price of gas relative to coal. The new traffic is traffic that was probably lost to the railways many decades ago. It is growing in partnership with the highly efficient logistics service providers who now mainly use road traffic. However, they are all keen to try rail. I give the House a few examples. There is waste disposal by rail from city centres. At the end of last year I had the privilege of launching a project to take Edinburgh's waste to Dunbar by train. Even on a 40 mile journey with a road stretch at each end, the scheme beat the competition. I refer to concrete batching plants in city centres and elsewhere supplied by rail. The noble Lord, Lord Cadman, mentioned Battersea which is a potential site for a concrete aggregates plant. Before Christmas we discovered that the rail property board preferred to sell the site in question to Battersea Dogs Home which does a wonderful job looking after stray dogs. However, it is my submission that whereas aggregates concrete plants should be connected by rail, dogs do not need to be connected by rail. There is a priority problem here.
The food and drink industry is starting to transport goods by rail, either for primary distribution or between distribution centres from supermarkets and manufacturers to other retail outlets. Chemicals and dangerous goods can be transferred by rail far more safely than by road. I refer in this connection to both domestic and cross-Channel routes.
What does it need to make what I term a "rail freight revolution" happen? There are many factors which noble Lords have mentioned on previous occasions. I refer to customer service, competitive price, investment in new rolling stock, traction and train paths through the rail network. All those factors must be brought into play and I believe that that will occur. However, the one thing rail cannot do without is terminals for loading and unloading. Otherwise we shall have a scenario, as in the case of the flying Dutchman, going round and round the world. Terminals cover anything from major international intermodal terminals, of which there are a welcome few, through special waste disposal, concrete aggregates plants, rail connected ports, terminals for general merchandise or food and drink, private terminals at factories, urban distribution centres and just flat land in parts of Scotland where timber is loaded on the main line.
There is great diversity. It cannot all take place in one place. One does not wish to have food and drink terminals next to a major chemical plant. It does not work. However, what they all have in common is the

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need for land, with good road and rail connections and suitable planning zoning. Already, with the small growth to date, there is the problem of congestion in some existing terminals. That means delays. Customers do not like that. We hope that they do not take their trade away.
It is worth pointing out that virtually all factories and distribution and retail centres are connected to roads. It goes without saying that they have to have a road connection. Local authorities often take a great interest in those terminals. But not many now are rail connected; and not many now have the economic potential to be so connected. It is therefore important to preserve sites which exist at present even if they are not in use. The costs of taking freight by rail become more competitive with road freight if the factories or warehouses at one or both ends are rail connected. If they are not, it is important that the road legs of journeys are as short as possible. But the key is to be rail connected. It makes an enormous difference to the economics of competing with road freight. If rail freight is to increase by three to four times in the next 10 to 15 years, the provision of terminals is vital.
The noble Lord, Lord Cadman, mentioned the sale of its land by the British Railways Board. It is no great surprise to me. I never looked upon the board as a great friend of rail freight. The allocation of land took place in 1994. When Railtrack was given the operational land it was not over-endowed with land. The board probably kept most of the land for itself with a view to selling off the 2,000 sites, which the noble Lord mentioned, by, I believe, the end of this year. I find it surprising that the Government appear to be following the policy of the last government and encouraging the sales. The Government have changed. The transport policy—thank goodness—has changed. I hope that the Government can instruct the British Railways Board to slow down or pause a little.
First, the Government should consult widely with industry and those involved. After much prodding they are consulting with Railtrack. The examples given by the noble Lord, Lord Cadman, arose only because Railtrack said, "Hang on, we want these sites". Otherwise the flyover at Nuneaton would have become a municipal car park. EWS and Freightline were consulted. But, quite rightly, they have their own commercial agenda; and they do not always have the long term vision of others or the detailed knowledge of local authorities. Is it possible for the Government to instruct the board to delay sales until consultation has taken place? If a piece of land could be useful for future rail freight, can the board be instructed to hold off from selling a piece of land perhaps for three years until the strategic rail authority is set up, or other arrangements explored? It would not be right to instruct the board to sell land below market price; that might contravene the Transport Acts of 1962 and 1968. However, perhaps the board could hold off on the sale of the few parcels of land considered to be crucial for the rail freight industry.
We have been told by the Minister of Transport for London, Glenda Jackson, that this would risk breaching the financial duties imposed on British Rail by the two Acts. But who told the board suddenly to sell everything off, at sometimes knock down prices, apparently with
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the intention of clearing the books by the end of this year, when it had not cleared its books for 30 years? What has changed? There must be an element of a government instruction here.
The land is potentially vital for the development and growth of the railways. The land—it is probably only 10 per cent. of the total area—is being sold as a tidying up process at the end of privatisation. If the sale goes ahead, it will inhibit growth, increase costs and reduce rail traffic. That means more traffic on the roads. I believe that those objectives are totally contrary to the present Government's transport strategy. I welcome the debate and look forward to hearing what the Minister says.
8.24 p.m.
Lord Thomson of Monifieth: My Lords, I join in thanking the noble Lord, Lord Cadman, for introducing the debate. He and the noble Lord, Lord Berkeley, both speak with great expertise on the general issue of the contribution that railway land can make to an integrated national transport system.
I wish to concentrate on a particular aspect of the disposal of railway land: its use as a contribution to creating a national cycle network—part of a sustainable transport system for the future. I should declare an interest as one of the patrons of the cycle charity, Sustrans. With the help of a substantial millennium grant from the National Lottery, Sustrans is well on its way to its target of 2,500 miles of national cycle network by June 2000. Indeed, it now hopes to complete 3,000 miles by then and to go to a national network of 8,000 miles by the year 2005.
Disused railway lines have an important role to play in this remarkable project. Sustrans commenced building railway paths in 1979 with the 16 kilometre long Bristol and Bath path, which now carries over a million trips annually, both cyclists and ramblers. Old railway corridors are ideal for walkers and cyclists in that they give an easily graded and generally traffic free route.
Since that time Sustrans has worked closely with the local authorities and I think it is true to say that between them they have managed to keep intact all the length of railways which have been sold by British Rail. This includes nearly 150 miles of popular paths built by Sustrans. To some extent Sustrans is doing what some Members of your Lordships' House and another place called for in the great 1966 Beeching debates; namely, that the routes of railways pieced together at such great cost by the Victorians should be kept as a network of greenways for the nation.
The noble Lord, Lord Berkeley, spoke with great authority about the problems of valuation of railway land. It is worth noting that by and large the value of the linear railways corridors is very small because what land values they might have are counterbalanced by the considerable liability of the viaducts, bridges and fencing. In selling the linear lines, British Rail is shedding itself of those very real costs, and I suppose that Sustrans is one of the very few organisations which sees those liabilities as assets because they give it the continuous route, free of traffic.

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The larger areas comprising stations and former goods yards, about which the noble Lord, Lord Berkeley, spoke, have a much greater value. It is those that in many ways are more of a loss today. As the noble Lord emphasised, those areas are seen as crucial for future freight termini in any resurgent railway system. I strongly support him in saying that those should be maintained and exploited in the national interest.
Sustrans is at present completing the acquisition of a list of largely fragmented pieces of railway line, each of which is an essential component of the longer routes that are being put together. It is most anxious to ensure that the fragmentation of the railways following the last government's privatisation should not lead to that residue being lost to public use.
If for some reason the transfer of the fragments of railway land in Sustrans' current list were to be delayed or halted, it would cause a real problem to the completion of the national cycle network. I hope to reassure the noble Lord, Lord Cadman, slightly on this particular point. Sustrans has reconfirmed on many occasions its willingness and determination to hold these fragments for possible railway use at some time in the future if so required. It will be resolving the difficult problem faced by Rail Property: namely, the proper care and maintenance of over 500 structures—bridges, viaducts and the like. It will aim to refurbish most of those during the construction of public paths over the next three or four years. It has good reason for doing so. While for Rail Property any such repair work is a drain on its now almost non-existent resources, for Sustrans it is the very purpose of the whole operation.
Sustrans is working closely with Railtrack on the development of the national network. It, in turn, has been working with the rail operating companies to check which sections of land might be required by them. So far as I know, the only pieces that they require have all been removed from the list being transferred to Sustrans. In the case of one, the route from Dumfries to Maxwelltown, provision has been made for the public path to run beside a single railway.
On all those projects, Sustrans is working closely with local authorities. It will not proceed with any works unless the local authority is satisfied that that is the best option for the railway land in question. That means that, to some extent, it is acting as a safe holding body while the Government make their policy decisions on the future retention of land and the wider issues raised by the debate initiated by the noble Lord, Lord Cadman. I might make the presumptuous remark that Sustrans may be a safer body to hold such land than either the local authorities, which are subject to many pressures and demands, or even—if I may say so with respect to the Minister who will reply—central government, who have not been notable in preventing the fragmentation of railway land over many years.
I simply wanted to plead with the Government that, in dealing with the more general issues raised by the noble Lords, Lord Cadman and Lord Berkeley, they will give a fair wind to the remarkable and imaginative concept of using disused railway lines in the way that I
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have described. It is both ecologically and financially sound. It is a concept that should be of great benefit to the health of future generations.
8.32 p.m.
Lord Mountevans: My Lords, 1, too, am grateful to my noble friend Lord Cadman for raising this issue. We all believe, or hope, that Britain is not alone in being close to the dawn of a new golden era for rail freight. We must do all we can to advance that particular cause. In this country, as abroad, the reasons speak for themselves. There are environmental reasons: the railway is green transport. There are the economic ones. The noble Lord, Lord Berkeley, mentioned some, but I always tend to think that one man moving perhaps 600 tonnes of tare is very much more productive than 10 or 20 men with tractor-trailer rigs. There are the negative costs of congestion. There is a safety dimension—when there is a major road accident, it tends to be overlooked; when there is a small railway accident, everyone is shouting, because we take the safety or our railways so much for granted. And of course there is privatisation—new money, new ideas. All those seem to be good reasons for anticipating and looking forward to a golden era.
One may take one's pick of the growth projections; there are many. But it seems to me that growth will be assured. However, to secure that growth, we must take steps to ensure, as other noble Lords said, that potential infrastructure is not prematurely disposed of. For a while at least we must go easy on the disposal of land which has or may have potential for terminal use. That is important whether we talk of a modest little terminal where swap bodies may be unloaded; whether we talk about a single siding, and not disconnecting or locking it out of use; or whether we talk of a major freight terminal.
I am somewhat reluctant to see a three-year blight on such sites, as suggested by the noble Lord, Lord Berkeley. That period may be slightly too long. We must make up our minds much more quickly than that, if we can. However, I do feel that short-term blight is a necessary evil which must be accepted while we develop an integrated freight transport policy.
In fact, if I had one wish in this context, it would be that the forthcoming transport White Paper accepts that necessary evil. If the paper does nothing else but give us some breathing space, I for one shall welcome it.
8.35 p.m.
Lord Methuen: My Lords, I, too, welcome this debate, initiated by the noble Lord, Lord Cadman—coming, as it does, so soon after the debate introduced by my noble friend Lady Thomas of Walliswood. The close proximity of the two debates indicates the degree of interest in this House in an integrated transport policy with particular reference to railways. That was also borne out in the highly supportive attitude of the previous speakers.
I should first declare an interest as a sometime member of the railway signal engineering profession and a companion member of the Institution of Railway

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Signal Engineers. I was active in the early 1960s, when there was a huge investment programme in the electrification of a number of lines, including the west coast mainline, and in the mechanisation of freight handling in automated marshalling yards. To the best of my knowledge, all the latter have been swept away with the concentration of freight traffic into train load operations.
I was pleased to see the optimistic forecasts by EWS, the Rail Freight Group and others for a significant growth in rail freight traffic volumes, although I fear that their most optimistic figures may result in rail freight traffic only a small percentage of that currently carried by HGVs. Perhaps the Minister can enlighten the House as to the respective tonne-kilometres that the DETR is forecasting for those two transport modes.
I also notice from the briefing given to us by the Rail Freight Group of the noble Lord, Lord Berkeley, that there is at last a change in thinking away from the sole use of train load freight, and the re-introduction of wagonload and parcel traffic, and more encouragement for the use of private sidings, from which so much freight used to originate. However, does that mean that we now have once again a requirement for marshalling yards? Or how is it envisaged that wagonload traffic will be processed? Shall we also at last see the introduction of automatic coupling to a European standard for all freight traffic?
Like previous speakers, I am aghast at the wholesale disposal of central facilities for the handling of freight. I think we forget how numerous those facilities used to be. I can remember freight operations at High Street Kensington and Farringdon stations on the Underground, and steam freight trains on the Circle Line between Paddington and Smithfield in the early 1950s. That may have been overkill, given the position these days; however, it indicates the degree to which rail freight penetrated right into the heart of our cities. I am not expecting the revival of rail freight to result in such a spread of freight facilities as were available in those pre-Beeching days, but the point is that in many towns all land suitable for freight handling has been redeveloped.
But the disposals and closures of rail facilities have other repercussions. Last week, the Oakley viaduct on the Midland main line north of Bedford was closed for emergency repairs and the two tracks were removed to facilitate that work. Luckily, the four-track section which used to extend from St. Pancras to Trent Junction near Nottingham (with only limited two-track sections) was still in situ at Oakley, and hence the trains were able to be diverted onto the freight lines. Elsewhere on that line such an emergency would have had serious repercussions as much of the four-track permanent way has been reduced to three or only two tracks, and there are many bridges on that route and elsewhere where Railtrack could face similar problems with the Victorian engineering.
That example shows how the railways are existing by the skin of their teeth. In the old, pre-Beeching days there was a vast over-duplication of rail facilities resulting from the competitive rail environment that
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British Rail inherited and which required rationalisation. That resulted in it being possible to re-route trains in the way mentioned by the noble Lord, Lord Cadman, which is now largely impossible. It also provided additional paths for both passenger and freight traffic—a facility that we do not now have. If we wish to recover the lost freight traffic, it is essential that we preserve such mothballed and unsold railway lands with any potential for reuse and reinstate much of the four-track sections which enabled freight and passenger traffic to coexist on the same routes. It is all very well to say that freight will travel at 70 miles an hour, but surely our passenger traffic will travel at over 100 miles an hour? We need these additional tracks for safe, efficient and flexible operation.
The other plea I would make is for the retention of urban track beds for future light-rail usage. We have seen this in the Manchester area. Reading the Railway Gazette (which is available in the Salisbury Room), one sees how poor is our take-up of light rail compared with that of the rest of the world and in particular of Europe. I encourage the Minister to look favourably on such projects as a major pollution-free contributor to our integrated transport policy in this country.
I support the noble Lord, Lord Thomson of Monifieth, with regard to organisations such as Sustrans. In the Peak District we have several old railway lines which have been made into cycle tracks. I saw the lack of such a policy when I lived in Oxfordshire. The line from Banbury through Chipping Norton towards Cheltenham would have made an ideal cycle track, hut it has been sold off in bits, which makes that now totally impractical. One hopes that the proposed strategic rail authority will look at some of these matters.
Finally, can the Minister tell us why it is possible to safeguard land for road building but not existing railway lands for reuse? Does she not agree that the approach which the Government are taking sacrifices long-term interests for short-term financial gain?
8.41 p.m.
Lord Brabazon of Tara: My Lords, I am grateful to my noble friend Lord Cadman for asking this Question, which follows on naturally from our debate on 25th February on the state of the railways in general.
Everyone is agreed that it is desirable to put more freight on to rail and off the roads, even those, and perhaps particularly those, such as myself who count themselves fully paid-up members of the motoring lobby—and I suspect, after tomorrow, even more fully paid-up! Not only would a reduction in freight journeys on the road reduce congestion, it would also save the Government money on road maintenance as it is the heavy lorry that causes by far the most wear and tear to the roads. In the debate last month and today we have heard very encouraging forecasts of growth in rail freight, particularly from the noble Lord, Lord Berkeley, ranging from 50 per cent. to 200 per cent. in 10 years and even more over the longer term. Nevertheless, as freight overall is also forecast to grow, so the actual percentage of freight by rail will still be relatively small compared to freight by road, often for obvious practical

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reasons, such as the inability to have a railway siding at every factory or supermarket. In the overall debate it is therefore important not to neglect roads altogether. Most freight carried by rail will still require a road journey at either end or both ends.
The problem of disposal of surplus railway land is, I admit, a difficult one. I intend to confine my remarks to freight use. Much as I enjoyed the speech of the noble Lord, Lord Thomson of Monifieth, about the track, I believe the main problem is with land which was previously used for freight. The Minister said on 25th February (Hansard, col. 762) that planning guidance might be strengthened to protect land for future rail use. I suspect that many of the sites in question are so-called brownfield sites and so might also be suitable for new housing development if the Government are to meet their targets for new houses on such brownfield sites. There is a possible conflict here. It would be interesting if the Minister could say more about the use of the planning system in this context.
There is also the problem, such as with the Channel Tunnel Rail Link, where disposal of land for development forms an integral part of the financial package to build the link. If that land is not to be sold for development to the highest bidder, which may not be for railways use, the money will have to be found from somewhere else. I have seen a copy of a letter from the Deputy Prime Minister's Office to the managing director of EWS that reaffirms the Government's decision to stick to the previous government's public expenditure programme. The money is obviously not going to come from public funds, so where will it come from?
Returning to the planning issue, any new rail freight terminal on existing rail land, or an expansion of existing facilities, is bound to lead to an increase in road traffic in the immediate vicinity. This may well be unpopular with local residents and is a point that needs to be taken into consideration.
The planning process could work positively, and perhaps achieve the happy combination of a boost for rail freight and the best value from the sale of surplus land, if, where a site is to be sold for commercial development, such as a supermarket, planning permission could require a railway siding to be included. Perhaps it could go even further and require a certain proportion of deliveries to be made by rail to the site as a condition of planning approval.
The main difficulty in reserving railway land for future use for freight facilities appears to be the requirement of British Rail to sell surplus land at market value—in other words, to the best buyer. As has been said, once such land has gone for another type of development, it has almost certainly gone for ever. How does one weigh up the competing claims, one for actual commercial development now and the other for some hypothetical future need for rail freight development? What is in the best overall interests of the locality and the nation as a whole and will have the greatest impact on jobs and on the local economy? These questions are not easily solved and there is sometimes an alternative view.
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I have no doubt that the Minister will say that we must await the conclusions of the White Paper on an integrated transport policy. I hope that the outcome might at least identify the main sites in question and perhaps put a hold on their sale, while letting other, less important sites go on the market. But it must be for the industry itself to decide whether the existing sites are necessarily the best ones or whether there might not be better sites elsewhere which have not yet been considered for development. I believe that the best solution of all would be for the railway industry to use its new-found access to private capital and its ability to look longer term than in pre-privatisation days and, where possible, to buy the sites for themselves. I look forward to the Minister's reply.
8.47 p.m.
The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Baroness Hayman): My Lords, like other noble Lords, I am grateful to the noble Lord, Lord Cadman, for raising this important issue. It is soon after our previous debate on the railways, but I believe that that reflects the wish, which the Government share with many noble Lords who have spoken tonight, to see an improvement in our rail services and to see more passengers and freight attracted to our railways.
We are committed to creating a truly integrated transport system, to strike a better balance between the various transport modes and to give people a real choice. Before we can do that, there are fundamental problems in our railway industry that we propose to address. The noble Lord, Lord Cadman, referred to the need for a strategic rail authority, and other more general issues have been raised by noble Lords tonight, but we have focused most on the specific areas raised in the noble Lord's Question about the continuing disposal of railway land and the uses to which it might be put.
The proposition has been put this evening that the Government should intervene to stop the British Railways Board, through its property arm, Rail Property Limited, from disposing of its remaining surplus sites. The Government's policy here, as with other areas of railway policy, has to be based on the situation we inherited, the situation that we found rather than the situation that we would have wished to find. We also inherited—and are committed to—the expenditure programme of the previous administration.
Lord Brabazon of Tara: My Lords, the Government did not inherit the public expenditure programme from the previous government. This Government decided to commit themselves to it. That is not the same thing as inheriting it; they had no obligation to do so.
Baroness Hayman: My Lords, I thought I had made clear by what I said that we inherited a set of figures. We are committed to, and made clear our commitment to, those figures. As the noble Lord is well aware, the receipts from the disposal of British rail land are part of that expenditure programme. We and British rail are bound by legislation.

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The noble Lord, Lord Cadman, and my noble friend Lord Berkeley, cited the legislation by which BR could be directed in its management of property. However, that legislation was amended in part by the Railways Act 1993, which limited some of the actions we can take to those connected with railway privatisation, which is not an aim of this Government. Given that legislative position, BR has a duty to dispose of its assets at the best possible price. However, in relation to the site at Battersea, which I know is of concern to my noble friend, I understand that the company involved made an application for planning permission at an adjoining site. It may be that the interests of both rail freight and the dogs may be met within existing policies.
The other position we inherited—I am sure the noble Lord, Lord Brabazon of Tara, will accept this—is that few significant sites now remain within BR ownership. BR's programme for disposing of surplus land has been ongoing for many years. Furthermore, when the previous government created Railtrack in 1994, Railtrack took not only the operational line, stations and land, but also those closed sites and lines which were thought to have a realistic prospect of reopening. I am pleased to say that, of those, traffic has returned to 25 routes since April 1994 and Railtrack believes that there is further potential for 41 other routes at some time in the future.
The Government recognise that some of the sites which did not appear to the previous administration to have a future for transport, may now have more potential. That does not mean that a site which served a railway purpose many years ago, will necessarily serve the different demands of railways or other modes of transport in the future. But, where a site has real potential for future rail use, we have sought to ensure that appropriate procedures are in place to identify it. The noble Lord, Lord Methuen, asked us to look favourably on light rail use, for example, on urban track beds. We recognise that light rail can be an effective means of transport in certain circumstances, such as the Manchester example to which he referred. We will be considering what role light rail will have in the context of the White Paper on integrated transport.
To return to the procedures which are in place to identify railway sites, BR gives Railtrack, other railway businesses and local authorities advance warning of sales so that they can bid if they choose. RPL has drawn to the attention of Railtrack around 450 sites which adjoin or are close to operational railways. RPL welcomes Railtrack's sharing of that information with other rail industry interests and also welcomes inquiries from the rail industry about sites, either specifically or general. RPL send auction catalogues to Freightliner as well as to Railtrack and AWS. Railtrack is now in negotiation with Rail Property Limited with a view to buying a number of sites, including lines at Acton. Colnbrook, Dumfries, Limehouse, Menstrie and Nuneaton. Railtrack also bid for sites at auction and has been successful in a number of cases. It recently purchased a 13-acre site on the east coast main line.
To turn to the issue raised by the noble Lord, Lord Thomson of Monifieth, most former track beds are in private or local authority ownership. However, it is
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proposed to transfer a number of BR's remaining track beds—they have around 75 lengths mostly in short and isolated stretches—to Sustrans, the cycling charity. I can assure the noble Lord that we support those proposals. In that way, not only will provision be made for safe walking and cycling, but the integrity of the transport corridor will be maintained. As the noble Lord pointed out, it will be in safe hands. Though realistically we believe that few, if any, of the stretches of line going to Sustrans will have the potential to reopen as commercial railways, Sustrans will be under a covenant not to undertake work that would preclude the reinstatement of railway lines. It is therefore an extremely advantageous scheme and one that the Government are pleased to support.
The noble Lord, Lord Brabazon, raised the issue of planning guidance. Current guidance already makes it clear that local authorities should consider the potential of disused track beds and routes for future transport schemes. As I said the other day, we are looking closely, in the context of integrated transport policy, at whether planning guidance might be strengthened to protect suitable land for future rail use. A fully revised draft of PPG12, which governs the issues, will be issued for public consultation later this year.
The Government believe that the procedures now in place are the right way to proceed. We are not prepared to distort competition or offer additional subsidies to Railtrack or other privatised members of the rail industry in the form of cheap land sold at the taxpayers' expense at less than market value. Nor are we prepared to risk distorting the property market or depressing prices for other RPL sites. I might add that EWS told us that it accepts the principle that British Rail land and property should be offered on the open market. Halting sales would mean sterilising and blighting land—a point recognised by the noble Lord, Lord Mountevans—even though we understand the anxieties that we should not lose out. But there are potentially different high priority uses, a point referred to by the noble Lord, Lord Brabazon of Tara. Blight leads to misuse such as fly-tipping, which imposes costs on the public purse.
In tonight's debate, as has been expected, emphasis was given to freight. The Government wish—as does my noble friend Lord Berkeley, and the noble Lord, Lord Mountevans—to see rail freight back at the heart of Britain's rail industry. An increase in rail's share of the freight market will be a key part to integrated transport policy for all the reasons outlined tonight. The new freight companies are winning new traffic on to rail. English, Welsh and Scottish Railways aims to triple traffic in 10 years; Freightliner aims to increase the volume of container traffic by 50 per cent. in five years.
I am not sure whether the detailed data asked for by the noble Lord, Lord Methuen, in relation to comparisons between different modes are available. Perhaps I may make inquiries and write to him on that point.
Railtrack is keen to meet the needs of the expanding rail freight market and protect land that has a realistic possibility of future freight demand. Its code of practice for freight, published last year, states that it will discuss

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in advance with the rail freight industry, local authorities and other interested parties any proposed significant changes to its existing portfolio of land holdings that have realistic freight potential. Where that is the case, Railtrack will aim to preserve existing facilities or provide a suitable equivalent as well as considering new locations for investment to anticipate expected demand.
We already provide grants to industry towards the capital cost of rail freight equipment in cases where the traffic would otherwise be moved by road. We have taken measures to improve the freight facilities grant, not only in financial terms, but also by cutting the red tape associated with it. We have also secured commitments from the French Government and Eurotunnel to obtain a better deal for rail freight carried through the Channel Tunnel and beyond, not only by EWS, but also by potential new entrants to the market. In the context of the development of the integrated transport policy, we are considering what other measures might be introduced to encourage rail freight.
I noted the comments made by several noble Lords, including the noble Lord, Lord Methuen, in relation to the value of smaller freight sites. But it is worth pointing out that nowadays freight operators seeking rail-based terminals usually need substantial parcels of land. Bulk
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materials require space for loading, unloading and storage. In some circumstances processing plant must also be provided on site. In the intermodal sectors, space is needed for loading, unloading, lorry access and parking, and the provision of storage and warehouse facilities on site or nearby may be critical to the overall viability of the development. BR has few such sites. That is not to suggest that small sites are never of any interest, for instance, for single company terminals. But their potential for future rail freight depots is bound to be relatively constrained.
To sum up, we have taken action to boost the take-up of rail freight grants to transfer freight from road to rail, and we have beefed up next year's budget by £10 million to £40 million. We have ensured that BR routinely tells railway businesses of the sites coming up for auction and we are satisfied that in the context of the disposal of land Railtrack observes a strict code of practice.
I hope that what I have said tonight will reassure noble Lords that the Government are fully committed to the improvement of our freight and passenger railway services as part of our integrated transport strategy, and that the disposal of BR's surplus land does not jeopardise that policy, a policy that the Government fully intend to implement.
House adjourned at nine o'clock.