Lords Sitting of 12 July 2000

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Gloucester.

Lord Morgan
Kenneth Owen Morgan Esquire, having been created Baron Morgan, of Aberdyfi in the County of Gwynedd, for life—Was, in his robes, introduced between the Lord Merlyn-Rees and the Lord Williams of Mostyn, and made the solemn Affirmation.
Baroness Noakes
Sheila Valerie Masters, DBE, having been created Baroness Noakes, of Goudhurst in the County of Kent, for life—Was, in her robes, introduced between the Lord Harris of Peckham and the Baroness Wilcox.

The Lord Chancellor: Leave of Absence
2.50 p.m.
The Lord Chancellor (Lord Irvine of Lairg): My Lords, before business begins, I take the opportunity to inform the House that I am to host a visit by the Minister of Justice of the Federal Republic of Germany on Friday 14th July when the House will sit. Accordingly, I trust that the House will grant me leave of absence.

Tributes to the late Lord Runcie
The Attorney-General (Lord Williams of Mostyn): My Lords, the whole House will have been saddened, as I was, to hear this morning of the death of Lord Runcie, our friend and colleague for so many years.
Lord Runcie first took his seat in this House in 1973 as Bishop of St Albans, and sat as Archbishop of Canterbury from 1980 to 1991 and thereafter as a life Peer. He was a man of great courage and deep conviction. He early in life shone academically and at sport. In 1941 he won a scholarship to Oxford. He studied there for a year and then enlisted in the Army. During the Second World War he served in the Scots Guards and, as all your Lordships know, in 1945 he was awarded the Military Cross for bravery under fire. That bravery continued throughout his ministry, particularly during his time as Archbishop.
His sympathies were always with the poor and the oppressed. He commissioned the Faith in the City report which drew attention to poverty in urban areas in days when perhaps consciousness of social exclusion was much lower than it is today. Lord Runcie was shown indeed to be far-sighted when urban deprivation and disadvantage became much more the
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centre of political attention and debate. He ensured that the report was followed up by action, setting up the Church Urban Fund which has subsequently done so much.
It is sometimes said that Lord Runcie was thought of as a reluctant archbishop. He said. I think with a wry smile, that his misfortune was that he was always able to see both sides of the argument—not a universal experience in your Lordships' House! He ensured that the voice of the Church was heard clearly in all public debates, and his preaching of the Gospel, in which lie had such a deep belief, was always uncompromising and direct. He was not afraid of controversy when he thought that conscience required it. I know that he is remembered most fondly by his brother bishops as a man of faith and humanity; as a man of humour; and as a man who had a lively sense of the absurd.
Lord Runcie was a deeply caring pastor, which would probably have pleased him most to have heard. We shall all miss him here and I know that your Lordships will want to join me in sending our affectionate sympathy to Lady Runcie and to his family. His was a good life well lived.
Lord Strathclyde: My Lords, on behalf of the Opposition Benches, I endorse the worthy, warm and full tribute paid by the noble and learned Lord, Lord Williams of Mostyn, to the late Lord Runcie. As the noble and learned Lord said, Lord Runcie had been a Member of this House since 1973 and was held in great affection and much respect on all sides of the House.
I did not have the privilege of knowing him closely, although, as is well known, he served with bravery and distinction in the Scots Guards along with a former leader of the Conservative Party in this House, the late Lord Whitelaw. He also shared with my immediate predecessor, my noble friend Lord Cranborne, an enthusiasm for owning and breeding pigs.
One has only to cite his war service—I wonder whether there will ever again be an Archbishop of Canterbury who holds the Military Cross—and also his rare private enthusiasm to have a sense of the range of the man which went far beyond his tiring achievements in the Church of England and in public life. He was a man of courage, wisdom, clear spirituality and distinguished scholarship, leavened always with common sense and good humour.
I cannot speak with full authority of his time as a skilful leader of the Anglican Church in a testing period but, in all the challenges he faced, his integrity and burning desire to bind people together never failed. In the wider world he had a deep insight into the importance of the orthodox tradition in Christianity and of those common threads from the early centuries of the Church that bind Christians of all denominations. He was known and respected across the whole Christian world.

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People inside and outside the Anglican Church will miss him. But, above all, our deep sympathy goes to Lady Runcie and to his family at home.
Baroness Williams of Crosby: My Lords, from these Benches I add to the tributes paid by the Attorney-General and the noble Lord, Lord Strathclyde. I hope the House will forgive me if I say just a few words of personal tribute because Lord Runcie was a friend of mine throughout my life.
We first met in 1948 when he came to Oxford University almost directly from a long service in the Scots Guards, as the noble and learned Lord, Lord Williams of Mostyn, said, carrying with him a Military Cross about which he never spoke. Together we discussed for many hours whether he should enter the Church. He did not doubt his Christianity; but he doubted even then whether he was fit to enter holy orders. That was a mark of the modesty of the man.
We met again and saw a good deal of each other when he became Bishop of St. Albans in 1970. Shortly after he became Bishop, he opened, I believe, one of the very first churches in Pin Green—an area of Stevenage for which I was Member of Parliament—which allowed for almost the first time in this country the Anglican, Roman Catholic and Free Churches to share one building for their services. Today, under the shadow of Drumcree, that was a model that stood as a beacon in the world and is still one well worth following.
Subsequently, as we all remember, when he spoke at the service held with regard to the Falklands war, he had the courage to bring the Argentinian dead within the scope of his mercy—surely a proper thing for a Christian leader to do.
Then, at the time of Faith in the City, when the noble Lord, Lord Sheppard, acted strongly in Liverpool to bear out that witness, I was the Member of Parliament for Crosby and saw something of the remarkable example that the Church set out in one of the poorest cities of England. Again, many of us know that Lord Runcie entered into controversy and was attacked and criticised for Faith in the City. But he never at any time yielded or gave way on his belief and commitment to the concept of helping the poor, which he believed was central to the Christian faith.
Finally, in 1987, when Terry Waite insisted on going out to the Middle East to try to rescue the five hostages being held by the guerrilla forces of Iran, he went despite the Archbishop's strong advice. For years afterwards the Archbishop not only prayed for him but took into his employment my former political adviser, John Little, who travelled around some of the most remote souks of the Arab world seeking the release of the hostages.
Lord Runcie said,
"The Christian voice must be loud and clear on the great political issues of the time: on race relations, unemployment. disarmament and the proper distribution of the world's resources".
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He was a man who did not recognise the meaning of the word "hypocrisy" but lived his faith completely and every day.
In April this year he said:
"I am dying cheerfully".
I believe that he did die cheerfully and I believe, in the immortal words of John Bunyan, that the trumpets will sound for him on the other side.
Lord Craig of Radley: My Lords, as Convenor of the Cross Benches, I associate Cross-Bench Peers and myself with the eloquent and well deserved tributes expressed on all sides of the House to Lord Runcie. I also express our very sincere condolences to his wife and family.
Lord Runcie sat on these Benches. He was an archetypal Cross-Bencher with a wide and sympathetic understanding of all points of view. I can say how much Cross-Benchers enjoyed the presence of Lord Runcie among us. He was always ready with a smile and friendly greeting. On many occasions in the past he impressed me with his wit and humility, not least when he was referring to his time during the war in the Scots Guards. He served with distinction and, as has been mentioned, he was awarded the Military Cross in 1945.
He bore his last illness with great strength. He deserves your Lordships' admiration and praise. He will be greatly missed.
The Lord Bishop of Gloucester: My Lords, it was with great sadness that I heard the news earlier today of the death of Lord Runcie. It is a great privilege for me to pay tribute to him in the House on behalf of these Benches and to associate myself fully with the other tributes we have heard from all sides of the House.
Archbishop Robert, as I knew him then, consecrated me at the end of July 1986 in Southwark Cathedral as Bishop of Lynn to serve in the diocese of Norwich. It was a wonderful day for me and my family, enhanced for us all by the customary invitation to stay for the night before the consecration service as guests of the Archbishop and his wife at Lambeth Palace.
My previous 25 years of ordained ministry had been spent entirely as a parish priest, so I had never even been to Lambeth Palace, let alone stayed the night. It could so easily have been intimidating and over-formal for us, but the warmth and friendliness of Archbishop Robert and his wife Lindy and their daughter Rebecca, who I remember was the waitress for the evening dinner, put us all entirely at ease and made us feel at home. That lovely occasion remains one of our family highlights, even 14 years on. I also remember with deep appreciation the personal talk that the Archbishop had with me in his study on the eve of my consecration. He was natural, very human and deeply reassuring.
Lord Runcie was comfortable with all sorts and conditions of men and women. He was gracious and generous in his dealings with others and had a

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delightful and very witty sense of humour. His after-dinner speeches and his farewell tributes to retiring members of General Synod were always a great joy. Many were the anecdotes that circulated during his long and fruitful ministry. He was sometimes indiscreet, which some enjoyed and others thought improper for an archbishop, but for me it showed his wonderful humanity and how deeply he loved people, with all their faults and frailties. He had a great memory for people whom he had met and particular things they had shared with him. They would often be surprised following their meeting with a postcard or a letter.
In all the various ministries that he graced during his 50 years of ordained life, he always exemplified a true and deep understanding of priesthood which enabled him to relate pastorally and naturally to countless men and women, not only in our own Church of England and with our ecumenical partners, but throughout the Anglican communion. He had a great love and respect for fellow Christians in other countries and spent much of his time visiting and encouraging the Churches there, giving a high priority to the role of the Archbishop of Canterbury in our world-wide and expanding communion.
Among his many contributions to the life of our Church and nation, at least two stand out in importance. One, as we have already heard, was his initiative in achieving the publication of Faith in the City and the setting up of the Church Urban Fund that followed from it. That was a highly significant recommitment to the people of the inner cities which gave our Church a renewed confidence in its task of mission, particularly to those who are poor and often on the margins of society.
The other important contribution was his invitation to Pope John Paul II to pay a historic visit here in 1982. I still remember those wonderful pictures of two great Christian leaders praying together in Canterbury Cathedral. We are all very grateful for all that has flowed from that meeting in the years that have followed.
My Lords, you do not need me to tell you that the job of Archbishop of Canterbury is probably the most difficult in the Church of England. It is certainly the busiest, the most demanding and the one with the most expectations thrust upon it. Lord Runcie had his share of criticism, not least for what was called his caution on certain issues. He was cautious about the ordination of women to the priesthood and about the proposed covenant of the Church of England with the Methodist Church. However, that was not because he had no opinion. It was because he had a deep love for unity—the unity of our Church and nation—and felt great pain at any action that could lead to disunity or schism. In the best sense of the words, he was a liberal catholic. He was not woolly or indecisive, but open and ready to listen to all points of view, able to understand both sides of most questions, always able to affirm an opinion that he did not hold himself and always approaching any
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issue from a profoundly theological point of view. For Archbishop Robert, life did not easily fit in to rigid categories.
As we have heard, he was also a very courageous man with a fine war record. His stand during the Falklands war did not find universal favour, but it won him much respect. His long battle against cancer for the greater part of his retirement was another example of his courage, which he coupled with great cheerfulness and the maintaining of such a full diary that few of us were aware of how serious his last illness was. He was a very fine man and a greatly loved and respected archbishop with a deep Christian faith.
I thank God, as we all do, for the life and ministry of Lord Runcie and join other Members of this House in assuring Lady Runcie and her family of our sympathy, thoughts and prayers today and in the days to come.

DNA Evidence
3.6 p.m.
Lord Ackner Lord Ackner asked Her Majesty's Government:
In the light of the decisions of the Court of Appeal (Criminal Division) in R v. Weiz and the Attorney-General's Reference No. 3/1999 on 26th May, whether they will refer to the Law Commission the question whether the statutory restrictions on the use of DNA to be found in Section 64(3B) of the Police and Criminal Evidence Act 1984 should be maintained or relaxed; and, if not, why not.
The Parliamentary Under-Secretary of State, Home Department (Lord Bassam of Brighton): My Lords, the judgment of the Court of Appeal raises important issues in relation to the use of DNA profiles in evidence. My right honourable friend the Home Secretary is considering whether there is a case for amending the existing statutory provisions in Section 64 of the Police and Criminal Evidence Act 1984. I shall let your Lordships know what conclusion he reaches. We do not feel the need at present to seek advice from the Law Commission on the issue. I am advised that the Attorney-General has been granted leave to appeal the decision of the Court of Appeal and that the appeal is due to be heard on 23rd October 2000.
Lord Ackner: My Lords, I have two questions—or perhaps two and a half—for the Minister. However, first I should like to set out the foundation of the questions, namely the nature of the statutory restriction. In a few words, it provides that if a person is acquitted or the case against him is dropped, any fingerprints or DNA samples must be destroyed and that if they are not destroyed, they cannot thereafter be used. My first question is whether the Minister agrees with the Court of Appeal that in the two cases referred to in my question, the result of the statutory restriction was that a person "very probably guilty"—I use the Court of Appeal's words—of a brutal murder and a

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person "very probably guilty" of a rape of the utmost gravity were acquitted. My half question is whether the Minister also agrees that the reverse can happen to an innocent person, who could be found guilty because he was deprived of the ability to use the DNA samples.
My last question is simply whether, in the light of the words of the Court of Appeal and in the light of those two cases and the repercussions in relation to the other cases, the authorities or Parliament wish to revisit Section 64 of the Act. That is not a matter for the court. There can be no doubt as to the serious consequences which justify the course which I have suggested.
Lord Bassam of Brighton: My Lords, I have a great deal of respect for the noble and learned Lord but, as this case is still subject to the judicial process, it would be entirely inappropriate for me to comment on the wide-ranging issues which the noble and learned Lord has raised in your Lordships' House this afternoon.
Lord Elton: My Lords, I was the Minister who took the Police and Criminal Evidence Bill through your Lordships' House. Does not the fact that dangerous criminals may be released onto our streets and innocent people put into prison unnecessarily as a result of the provision to which the noble and learned Lord referred suggest that it would be a good thing to revisit this question? As referring a matter to the Law Commission is rather like placing a paper boat on the upper waters of the Nile and waiting for its emergence in the Delta, would it not be sensible to reconvene the Criminal Law Revision Committee and refer the matter to that committee?
Lord Bassam of Brighton: My Lords, the case is going to the House of Lords. The concluding sentence of the judgment indicated that Section 64 of PACE could be revisited. As I indicated earlier, that is exactly what Ministers are minded to do. We are looking into the issue as a matter of great urgency. We recognise the fullness of the issues which have been raised this afternoon.
Lord Richard: My Lords, is my noble friend aware that he is absolutely right in not commenting on the detail of the case prior to its consideration by the judicial authorities? Does he agree also that this is, perhaps, one of those Questions which is best taken away from Question Time and considered in other ways?
Lord Bassam of Brighton: My Lords, I am grateful to my noble friend for his support.
Lord Cope of Berkeley: My Lords, in fact the noble and learned Lord and my noble friend are suggesting that this matter should be considered in other fora. But is it not the case that the question to be considered is what the law should be whereas the courts are currently considering what the law is now?
Lord Bassam of Brighton: My Lords, that is the point. But it is right as a matter of public policy that we
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should consider those matters for the future. My right honourable friend the Home Secretary has made that plain.

Chronic Fatigue Syndrome and ME
3.13 p.m.
The Countess of Mar The Countess of Mar asked Her Majesty's Government:
When the Chief Medical Officer's task force on chronic fatigue syndrome and myalgic encephalomyelitis is expected to report.
The Parliamentary Under-Secretary of State, Department of Health (Lord Hunt of Kings Heath): My Lords, the Chief Medical Officer's working group on CFS/ME is expected to report in the summer of 2001.
The Countess of Mar: My Lords, I am grateful to the noble Lord for that reply. However, is he aware that in the intervening period, there is no consensus on the treatment for ME? More and more cases are coming to my attention every day in which local authorities are invoking Section 47 of the Children Act, which indirectly accuses parents of abusing their children. In fact, it seems that the abuses are on the part of the local authorities. Parents are accused of having Munchausen's Syndrome by proxy. They are hounded into forcing their children to have treatments which make them more sick. Families are cracking up under the strain.
The noble Lord knows that I have already raised this matter in relation to South Wales. I still have not received an answer from the Welsh Office. Will he look into the possibility of holding an inquiry into the way in which local social services departments are handling those children?
Lord Hunt of Kings Heath: My Lords, I am well aware that there is no agreed method of treatment for that condition. That is why the work of the working group is so important and it is right that it is taking time to reach conclusions.
As regards the child protection issues which the noble Countess has raised, it is not appropriate for me to comment on specific cases, but I assure her that the working group is considering the principles involved. It is my hope that good practice guidance will result in improved management and understanding of the circumstances in relation to children.
Lord Clement-Jones: My Lords, in view of the Minister's statement that the working group is to take a year longer than originally expected to reach a conclusion, it seems that further research on this matter will be held up. There is only one piece of research of which I am aware, carried out by the University of Manchester, into the causes of ME and it appears that that will be held up by the delay in the publication of the report. Will the Minister assure the House that research will be commissioned in the

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meantime both by the MRC and the Department of Health, if necessary, so that we can tackle the ME issue rather more urgently than we appear to be doing at present?
Lord Hunt of Kings Heath: My Lords, it would be wrong to suggest that the working group is taking too long and is being too slow. There are extremely complicated issues. It is well known that there are many differing views about the causes and treatments of that very distressing condition. It is right that the working group should take its time to reach its conclusions.
As regards research, I can tell the noble Lord—and I am happy to write to him with the details—that the NHS Research and Development Programme has supported research projects on CFS/ME to a total cost of £221,000.
Lord Turnberg: My Lords, does my noble friend agree that in the absence of a known cause for this distressing condition and a diagnostic test for it, clearly more research is needed? Meanwhile, the NHS must focus on making resources available to ensure that that evidence-based treatment which is available, which seems to improve the majority or 75 per cent of patients—namely, cognitive behaviour therapy visited in a cautious way—should be made more freely available.
Lord Hunt of Kings Heath: My Lords, my noble friend has raised a very important point. I acknowledge that that has shown to be an effective treatment in certain cases. But before further guidance is issued to the NHS, it is better to wait for the outcome of the working group's deliberations. Certainly, we should then hope to take forward from the working group any subsequent advice which needed to be made to the NHS about treatment. And if the working group puts forward suggestions for further research, we shall consider those very carefully.
The Countess of Mar: My Lords, does the noble Lord recall that almost two years ago I raised the question of a particular case in the House with the noble Baroness, Lady Hayman, when she was the Minister? I was assured at that time that the results of a judgment in the Birmingham courts, which said that the parents were the prime people to give consent to treatment, would be handed down to social services departments.
In view of the length of time that the task force is going to take to respond, will the Minister instruct social services departments to lay off those families and to allow them to treat their children as they wish, instead of forcing them into treatments which do not suit them?
Lord Hunt of Kings Heath: My Lords, my understanding is that the high profile of some of the cases to which the noble Countess referred has resulted in the courts deciding in favour of parents and the right of the individual to consent to treatment.
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I shall take away the suggestion made by the noble Countess to see whether it is appropriate for guidance to be issued to social services departments. But, in the long term, I believe that it is better that we allow the working group to finish its deliberations and then we shall be in a much stronger position to give overall guidance to the NHS.
The Earl of Listowel: My Lords, is the Minister aware of the foundation today of the Life Neurological Research Trust, which has been set up in memory of Baroness Wharton? It will fund research into Alzheimer's disease, Parkinson's disease, multiple sclerosis, motor neurone disease, Creutzfeldt-Jakob disease, encephalitis and other encephalopathies?
Lord Hunt of Kings Heath: My Lords, I was not aware, but I pay tribute to the organisation and to the work of the late Lady Wharton in your Lordships' House. I shall be very interested to discuss with the noble Earl the details of that trust.

Multiple Sclerosis: Beta Interferon
3.20 p.m.
Lord Dubs Lord Dubs asked Her Majesty's Government:
Whether they intend to make any decisions regarding treatment of multiple sclerosis in the light of recommendations from NICE (National Institute for Clinical Excellence).
Lord Hunt of Kings Heath: My Lords, NICE has not yet made any recommendations concerning Beta Interferon for the treatment of the distressing condition of multiple sclerosis. It is consulting interested parties, including patient groups, on its provisional conclusions and will carefully consider all comments before coming to a final view.
Lord Dubs: My Lords, is my noble friend open to persuasion that Beta Interferon is the only hope for some MS sufferers, but that there is also a need for a wide range of treatments from drugs to physiotherapy and dietary advice? Does he agree that NHS provision at present is patchy and sometimes on the inadequate side, and that a multi-disciplinary approach is the best way forward for dealing with this distressing disease?
Lord Hunt of Kings Heath: My Lords, the NICE recommendations are provisional. Interested parties, including the Government, can make comments to NICE, which will consider the results of such consultation before coming to a final decision. At this stage, no such firm recommendation has been made.
On the more general concern of my noble friend about the provision of overall services to those who suffer from multiple sclerosis, I recognise that there are elements of patchiness in the support that the NHS provides. That is one reason why, alongside the review of Beta Interferon, we have asked NICE to produce

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clinical guidelines on the management of the services in the NHS, which I am sure will lead to a much more consistent approach.
Lord Astor of Hever: My Lords, can the Minister confirm that NICE will consider the report in the journal Pharmaco Economics that the long-term use of Beta Interferon can save money by slowing down the onset of MS?
Lord Hunt of Kings Heath: My Lords, one of the advantages of the process by which interested parties are able to comment on provisional recommendations is that it enables any new evidence to be put to NICE for consideration. I am sure that NICE will consider any new evidence that is available that will enable it to come to its final recommendation.
Lord Walton of Detchant: My Lords, does the Minister agree that if the provisional conclusions of NICE were to be confirmed, that would fly in the face of the carefully considered advice given by the Association of British Neurologists which is entirely in favour of giving Beta Interferon to patients with the relapsing and remitting form of the disease, as at present it is the only effective treatment? Surely those provisional recommendations must have been made on financial rather than scientific grounds. Does he also agree that if that provisional conclusion were to be accepted, it would perpetuate the worst features of postcode prescribing by recommending that existing patients receiving the drug could continue to have it but that no new patients could have it prescribed under the NHS?
Lord Hunt of Kings Heath: My Lords, we are discussing a provisional recommendation of NICE. I believe that it would be wholly inappropriate for me to give a definitive government view on that recommendation. The Government are preparing to make a submission to NICE that will ask a number of questions about the recommendation and raise a number of technical issues. I believe that we need to await the final recommendations of NICE before the Government can come to an absolutely firm conclusion on these issues. In relation to existing users of services, we have said that existing users of Beta Interferon will be able to remain on that treatment as long as they derive benefit from it.
Lord Grenfell: My Lords, does the Minister agree that a reported 30 per cent reduction in relapses has an enormously beneficial impact on the MS sufferer, not the least of which is that it increases the opportunities for resuming gainful employment? Does he also agree that the early and direct involvement of MS patients in the appraisal process is essential to a proper appraisal of the benefits of Beta Interferon?
Lord Hunt of Kings Heath: Yes, my Lords, I well understand the comment made by my noble friend. My understanding is that the provisional
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recommendation made by NICE points to evidence of what it described as "modest clinical benefit" in relapsing/remitting MS and that that may suggest one relapse avoided in a two-and-a-half year period. Clearly, that is a factor that NICE has had to take into account, but we need to await its final recommendations.
I agree with the involvement of users in the appraisal process by NICE. Patients' user groups are involved as interested parties in being able to bring their views to the attention of NICE. The board of NICE contains non-executive directors who bring an outside perspective. We encourage as much communication as possible between NICE and user groups on such important matters.
Baroness Masham of Ilton: My Lords, does the Minister know whether there will be any right of appeal if patients are turned down for drugs such as Beta Interferon?
Lord Hunt of Kings Heath: My Lords, if recommendations are made by NICE, there is a process of appeal by interested parties which would certainly involve user groups.
Baroness Northover: My Lords, does the Minister agree that clinical effectiveness should properly be the remit of NICE, while priorities in funding must be decided by accountable politicians? Given that this is only the second, and in fact an interim, report from NICE in vast and fast-moving area, is he satisfied that NICE is sufficiently well funded to do its job properly?
Lord Hunt of Kings Heath: My Lords, NICE receives about £10 million a year to undertake its functions. I believe that the organisation has some high calibre people and that it is up to the job that we have given it. I believe that it is reasonable to ask it to look at both clinical and cost-effectiveness. It is absolutely right as a principle that we should seek to use the resources in the most cost-effective and clinically-effective way possible. I agree that the issue of resources and affordability is an issue for Ministers, but it is absolutely right to ensure that we focus our resources on what is best and that that should involve some judgment of cost-effectiveness.
Baroness Carnegy of Lour: My Lords, will the Minister undertake to convey to his right honourable friend the Secretary of State for Health the question raised by the noble Lord, Lord Walton, and its implications, which are extremely important and which the Minister seemed to dismiss?
Lord Hunt of Kings Heath: My Lords, I am sorry, but I do not believe that I dismissed the question raised by the noble Lord, Lord Walton; I thought that I answered it. In such circumstances, the views expressed in your Lordships' House are always brought to the attention of Ministers.
Lord Clement-Jones: My Lords, will the Minister undertake to look at the procedures of NICE in the

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future, both in regard to taxanes and Beta Interferon? We have a situation where a provisional decision has been kept highly confidential. It is therefore difficult to find out on what that decision was based. The appeal then takes place in a cloud of secrecy based, we assume, on some kind of commercial confidentiality excuse which does not appear to be valid. Will the Minister look carefully at that situation over the next few months?
Lord Hunt of Kings Heath: My Lords, yes. There will come a time when we will need to review the whole NICE process in order to make judgments in the light of experience. I certainly accept that we need to review the issue of whether or not the provisional recommendation should be made public.

Broadmoor Hospital
3.30 p.m.
Lord Skelmersdale Lord Skelmersdale asked Her Majesty's Government:
What policy exists at Broadmoor Hospital in respect of the possession of mobile telephones by patients.
Lord Hunt of Kings Heath: My Lords, patients at Broadmoor Hospital are not permitted to have access to mobile telephones.
Lord Skelmersdale: My Lords, I am grateful to the Minister for that Answer. Can he explain, if patients are banned from having mobile telephones and, I assume, tape recorders, cameras and the like, why those items were found among patients' belongings in Broadmoor? Also, why have two nurses been suspended? That may or may not have anything to do with those banned pieces of equipment. But what on earth is going on in Broadmoor?
Lord Hunt of Kings Heath: My Lords, I believe the noble Lord refers to an incident that occurred in May when a patient alleged that other patients were arranging to produce photographs and tape material about high profile Broadmoor Hospital patients which, it was stated, were to be sold to journalists. As a result of that allegation a ward was searched and a number of prohibited items were found, including a mobile phone and camera. I agree that that is an extremely serious matter. As a result, the hospital is undertaking an inquiry, chaired by a member of the hospital's board. That will be completed, I hope, by early September and will be considered in open session by the full hospital board.
Lord Laming: My Lords, at a time when there is concern over the incident referred to, will the Minister take this opportunity to acknowledge that in
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Broadmoor there are some remarkable members of staff who are doing outstanding work with some extremely dangerous patients?
Lord Hunt of Kings Heath: My Lords, I am happy to reiterate that sentiment. All too often we hear about the problems in special hospitals. Indeed, the series of inquiries that have taken place over the past 10 to 15 years indicated many difficulties. But we should not underestimate the dedication of the staff in dealing with incredibly difficult situations.
Lord Clement-Jones: My Lords, I associate myself with the remarks of the noble Lord. Lord Laming, and the Minister in relation to the staff at Broadmoor. The Minister did not mention the review of security procedures in Broadmoor recently carried out by Sir Richard Tilt. He made a number of recommendations, one of which was that almost one-third of patients currently in Broadmoor did not actually need to be there and that if more secure regional units existed they could be housed there. That would mean that those who need top security in Broadmoor could have it. Can the Minister comment on that?
Lord Hunt of Kings Heath: My Lords, I agree with those comments. Sir Richard's report was extremely helpful. It made over 80 recommendations in relation to security issues, all of which the Government accepted. We are speeding on to implementation over the next couple of years. There is no doubt that we need to move patients on from high security hospitals when they no longer need to be there. We have changed the funding system so that there is no longer a perverse incentive for the health service not to take patients from Broadmoor and similar hospitals. We are also ensuring that, through the expenditure of an additional £25 million over a three-year period recurrent, the movement of patients no longer needing high security will be facilitated. We need to press on with that.
The Earl of Listowel: My Lords, can the Minister say how extensive the support is for staff in Broadmoor? How much money a year is spent on the training of staff? Also, what is the ratio of staff to prisoners?
Lord Hunt of Kings Heath: My Lords, I do not have details of the training budget, but I shall make inquiries in that regard. The latest information is; that there are 422 patients in Broadmoor; a whole-time equivalent staff of 1,276 and a budget of £49.2 million. Training is extremely important. It is also important to integrate the special hospitals with the rest of' the health service. We will then see a better flow of staff moving from mental health services in general into the special hospitals and vice versa. Approval has been given to create a new mental health trust in West London which will incorporate Broadmoor Hospital and which I am sure will help the support for staff in their training and development.
Lord Astor of Hever: My Lords a recent report, Finding and Keeping by the Sainsbury Centre for

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Mental Health, reveals serious mental health understaffing and staff demoralised by increased bureaucracy and the risk of violence. What plans do the Government have to remedy that?
Lord Hunt of Kings Heath: My Lords, I am glad to pay tribute to the Sainsbury Centre for Mental Health. Clearly, as part of the general improvement that we wish to make to mental health services, including the publication of a national service framework of mental health and the additional allocation of £700 million to enable work to start in improving mental health services, we need to incorporate developments in the workforce. As part of our general approach to workforce planning, we are increasing training places and I fully expect mental health services to benefit from that.

Human Rights: Joint Committee
3.35 p.m.
The Attorney-General (Lord Williams of Mostyn): My Lords, on behalf of my noble friend Lady Jay of Paddington, I beg to move the Motion standing in her name on the Order Paper.
Moved, That it is expedient that a Joint Committee of Lords and Commons be appointed to consider and report on:

(a) matters relating to human rights in the United Kingdom (but excluding consideration of individual cases);

(b) proposals for remedial orders, draft remedial orders and remedial orders made under Section 10 of and laid under Schedule 2 to the Human Rights Act 1998; and

(c) in respect of draft remedial orders and remedial orders, whether the special attention of the House should be drawn to them on any of the grounds specified in Standing Order 73 (Joint Committee on Statutory Instruments);

to report to the House:

(a) in relation to any document containing proposals laid before the House under paragraph 3 of the said Schedule 2, its recommendation whether a draft order in the same terms as the proposals should be laid before the House; or

(b) in relation to any draft order laid under paragraph 2 of the said Schedule 2, its recommendation whether the draft order should be approved;

and to have power to report to the House on any matter arising from its consideration of the said proposals or draft orders; and
to report to the House in respect of any original order laid under paragraph 4 of the said Schedule 2, its recommendation whether:
234

(a) the order should be approved in the form in which it was originally laid before Parliament; or

(b) that the order should be replaced by a new order modifying the provisions of the original order: or

(c) that the order should not be approved,

and to have power to report to the House on any matter arising from its consideration of the said order or any replacement order.—(Lord Williams of Mostyn.)
On Question, Motion agreed to, and a message was ordered to be sent to the Commons to acquaint them therewith and to seek their concurrence.

Government Resources and Accounts Bill
3.36 p.m.
Read a third time.
Lord Higgins Lord Higgins moved Amendment No. 1:
After Clause 7, insert the following new clause—

Government Resources and Accounts Bill

  NON-DEPARTMENTAL PUBLIC BODIES' ACCOUNTS: AUDIT
  (" .—(1) Subject to subsection (7), this section applies to any non-departmental public body, unless otherwise provided by any order made under subsection (8).
  (2) On the prescribed date for each non-departmental public body to which this section applies, subsections (3) to (6) shall have effect in relation to that body.
  (3) Every non-departmental public body shall prepare accounts in respect of each financial year and shall send them to the Comptroller and Auditor General.
  (4) The Comptroller and Auditor General shall examine accounts sent to him under this section with a view to satisfying himself—

  (a) that the accounts present a true and fair view, and

  (b) that any public money provided to the body has been expended for the purposes for which the money was paid.

  (5) Where the Comptroller and Auditor General has conducted an examination of accounts under subsection (4) he shall—

  (a) certify them and issue a report,

  (b) send the certified accounts and the report to the department which is responsible for the non-departmental public body, and

  (c) if he is not satisfied of the matters set out in subsection (4)(a) and (b), report to the House of Commons.

  (6) The Comptroller and Auditor General shall lay a copy of the accounts and reports referred to in subsection (5)(b) before the House of Commons.
  (7) Subsections (3) to (6) do not apply to any body to the extent (but only to the extent) that any of its accounts are or become subject to audit—

  (a) by the Auditor General for Scotland, or

  (b) by the Auditor General for Wales.

  (8) The appropriate Minister may by order designate a non-departmental public body as one in relation to which this section does not apply for so long as the designation remains in force.
  (9) An order under subsection (8) shall be made by statutory instrument, and shall not be made unless a draft of the instrument has been laid before and approved by resolution of both Houses of Parliament.
  (10) In this section—
  "the appropriate Minister" means, as regards any non-departmental public body, a minister in the department which is responsible for that body;
  "non-departmental public body" means a body—

  (a) which is not a government department or comprised within a government department,

  (b) which exercises public functions of a governmental nature which might otherwise fall to be exercised by central government, and

  (c) an officer of which has been designated by a government department as its accounting officer in respect of the preparation of its accounts,

  but does not include any such body which is a company registered under the Companies Act 1985; and
  "prescribed date" means, as regards each non-departmental public body, the first day of the first full financial year of that body commencing after the expiry of the term of appointment of the person who is the auditor of the body when this section comes into force.").
  The noble Lord said: My Lords, in moving this amendment I shall say a brief word about the previous proceedings. We have made it clear throughout discussion on this Bill, both in Committee in the Moses Room and on Report, that we are strongly in favour of the Government's proposal to introduce resource accounting. But we have some reservations in relation to the scope of the Bill as it now stands, and Amendment No. 1 seeks to improve it, as does the second set of amendments.
  It is important to remember that control of money has always been the basis of parliamentary authority in relation to the executive. That is certainly so in relation to auditing arrangements. They are matters which should have the attention of all Members of Parliament. It is a question of the relationship between the executive and Parliament, both in the other place which normally has primary responsibility for financial matters, and your Lordships' House. As has already been pointed out, this Bill is one of the few Bills—only the third since 1866 or so—which gives an opportunity to put right a number of matters which are cause for concern, and it is important that we do not miss that opportunity.
  Perhaps I can say a few words in relation to previous comments made by the noble Lord, Lord McIntosh. We are considering these amendments against the proposal to have a so-called "Sharman Committee" and a steering group. I welcome the strong membership of the steering group. But we are still unclear about the relationship between the committee and the steering group. On the last occasion the noble Lord, Lord McIntosh, said that the task of the steering group was to steer. That did not really get us very much further forward. It would be helpful if we had some idea as to what the relationship is between the steering group and the Sharman committee.
  At all events, although we look forward to studying the results from those inquiries, it is important for us to take this opportunity to improve matters with regard to the proposals now before us. Again, on a previous occasion the Minister questioned why we wanted to change something that has been the same since 1866. But, of course, that is precisely what the
  236
  Government propose to do and we certainly welcome that move. We see no reason why we should not go further as far as concerns these amendments.
  The amendments and the following group have received strong support not only from the chairman of the Public Accounts Committee but also from the all-party membership of that committee. We are seeking to ensure that the Comptroller and Auditor General audits all non-departmental public bodies, as he does at present in respect of all departments and executive agencies. This has been recognised by the present Government because all the new NDPBs they have established have been audited, or scheduled to be to be audited, by the Comptroller and Auditor General. It is, I believe, common ground in all parts of the House that the present arrangement is a hotchpotch. The amendment seeks to clear up the situation and ensure that in future, once the contracts of the existing auditors with some of the NDPBs expire, the process should be taken over by the NAO.
  Having listened most carefully to the arguments put by the noble Lord, Lord McIntosh, I have to say that we on this side of the House—and I believe that this applies to other parts too—do not find them convincing. We believe that we should ensure that all the NDPBs are audited by the NAO and, in turn, referred to the PAC. The evidence in favour of this is very strong. As I said, the chairman of the PAC and his committee members are strongly in favour of such a move.
  In evidence to the PAC, the Chief Secretary said that there was a presumption that the audit should be carried out by the NAO. Moreover, when speaking on the gas and electricity Bill, the Minister said that to have such matters audited by the NAO would improve transparency, openness, certainty, clarity, and so on. Indeed, I believe that that applies to previous statements of Lord Chancellors on other legislation Therefore, we do not see why we should not take this opportunity to sort out the matter and thereby ensure that future arrangements are more satisfactory.
  However, I should stress that that does not mean that in very exceptional circumstances a non-departmental public body should not be audited by outside auditors rather than the NAO. Indeed, our amendment makes provision for such an eventuality. If the Government feel so strongly that that should be so, they can appoint a different auditor, subject to approval by statutory instrument. The present arrangements are not satisfactory. Although it is true, as the Minister said during previous debates, that all NDPBs are accountable through Ministers, there is a difference between the situation where the auditor reports to the Minister and he, in turn, reports to Parliament and one where the NAO carries out the investigation, reports to the PAC and directly to Parliament. If you like, there is no ministerial filter in that respect.
  The Minister argued previously that the situation where one size fits all is not satisfactory. However, except in the most exceptional circumstances—

  237
  provision for which is made in the amendment—we see no reason why it should not all be done by the NAO and the Comptroller and Auditor General.
  There are three amendments in this group. Amendments Nos. 2 and 3 seek to cover some of the points made by the Minister during earlier debates. I should stress strongly that Amendment No. 1 takes into account the comments that he made; namely, that the previous amendment was defective because it was the Treasury and not the sponsoring department that would become accountable. We have revised our amendments to ensure that the Comptroller and Auditor General will send the certified accounts and report to the sponsoring department and then, in turn, to the PAC. That is in line with present practice. I hope that the Minister will accept that we have met that particular point.
  The other problem that concerned the Minister was the question of definition; in other words, how does one determine the situation with regard to a NDPB? While, on balance, I believe that Amendment No. 1 is entirely satisfactory, we have put forward two alternative forms for doing this by reference to the Executive NDPB annual report—I have with me a copy of this year's report CM 4657—which clearly would provide a possible set of definitions. Subject to what the Minister may say in that regard, my personal feeling at this stage is that Amendment No. 1 is satisfactory. I hope that the Minister will accept it. However, if he does not, it is a matter of some concern to Parliament and, as such, I believe that we ought to take a decision on it. I beg to move.
  3.45 p.m.
  Baroness Sharp of Guildford: My Lords, I wish, first, to reiterate from these Benches our general support for this Bill and for its main purpose; namely, to shift from cash accounting to accrual accounting. We believe this to be an extremely important shift and we are very pleased to see it.
  I recognise that this amendment is about the issue of audit and that the prime purpose of the Bill is not. As I said, it is about shifting from cash accounting to accrual accounting. Nevertheless, in putting forward this amendment about auditing, it is important for us to recognise that Bills on the subject of the way in which accounts are made to Parliament come very rarely before Parliament. Indeed, this is the first such Bill we have had since 1926. Moreover, the Government have already diluted its purity by adding a considerable element to the end of the Bill about partnerships in the UK which, again, has nothing to do with accounting and accrual accounting.
  As I said on Report last week, we on these Benches do not find the question of who should audit NDPBs an easy one. Indeed, as I made clear, it is the central issue to be considered in the review of public sector audit arrangements chaired by my noble friend Lord Sharman. I sought assurances from the Minister last week that the Government would take seriously the findings of that committee and act on its
  238
  recommendations. As far as he could, the Minister gave me such assurances. However, as he acknowledged, no government can give unconditional assurances on such issues when recommendations have still not been made. Inevitably, also, action would lie with the Treasury.
  Since our debate last week, I have had discussions with a large number of people about these issues. As time has gone by, I have become the more convinced that at the end of the day we need to go back to first principles. As the noble Lord, Lord Higgins, said, the root of this amendment, and of the subsequent amendments regarding access is about the powers of Parliament vis-à-vis the executive. If Parliament is to maintain its sovereignty it is essential that it has the power not only to make appropriations but also to ensure that its will is done—that those appropriations are allocated, as Parliament has willed, and that people obtain the best value for money from them.
  From these Benches we have long taken the view that under successive governments, both Conservative and Labour, the power of the executive has increased, is still increasing and ought to be diminished. Although I recognise that the Sharman review will go over the same ground—that is, the area of audit—there is nothing in this amendment that would prejudice that review. As I argued at Report, it provides an insurance policy that the present most unsatisfactory hotchpotch of arrangements will be tidied up. That being so, we have decided that the underlying issue—the reinforcement of the role of Parliament and parliamentary scrutiny vis-à-vis the executive—should be the deciding factor. On those grounds we on these Benches add our voice of support to the amendment.
  Lord Freeman: My Lords, I support the amendment standing in the name of my noble friend Lord Higgins and associate myself with the remarks made by the noble Baroness. When one reads the 1999 report on non-departmental bodies, it is striking to note how many there are and the size of their public expenditure. I believe that it is now in the order of £12 billion per annum and that there are some 90 major public sector bodies.
  This Bill provides an opportunity to make sure that we have a consistent practice in terms of audit and accountability to Parliament. I well understand that the Minister has argued—and perhaps may argue again—that it would be more convenient to wait until the appropriate opportunity arises to change the auditors. However, now is the time to change. We have the Bill and we are introducing a most welcome method of accounting in the public sector. Noble Lords on all sides of the House have mentioned the principle of resource accounting and the need to change from the old-fashioned method of cash accounting. In my judgment noble Lords should accept the principle of resource accounting being applied uniformly throughout the public sector, including for all non-departmental public bodies.

  239
  There are two simple reasons for accepting Amendment No. 1 and the principles enshrined in it. I am sure that my noble friends Lord Lane of Horsell and Lord Shaw and many others on these Benches would agree with that. First, the National Audit Office stands in a different relationship to the public sector than either the Audit Commission or professional firms. The National Audit Office provides the information to the Public Accounts Committee to exercise, through Parliament—principally through the House of Commons—control over public expenditure. That is a vital link. We should extend the powers and capabilities of the National Audit Office.
  The second reason is allied to the first. In five, 10 or 15 years' time—when the Minister will, no doubt, remember these debates with interest and will reflect on what has been said—we shall move into an age where we measure output and performance and ask the National Audit Office to comment on the effectiveness and efficiency of the public sector in spending the money that we give it. A single body such as the National Audit Office can develop those skills and apply them uniformly.
  This is almost the end of a long process to reform the basis of public accounting which began some seven years ago. We are not quite there yet. I conclude by making a plea to the Minister that he will use whatever influence he can exert over his colleagues to ensure that we do not end up in the muddle of parallel accounting involving both cash and resource accounting. If we are to change—I hope sincerely that we can do so quickly—let us move with some boldness and clarity to resource accounting once and for all.
  Lord Shaw of Northstead: My Lords, I support the amendment. My noble friend Lord Bridgeman said in the debate last week that the C&AG's independence was diminished by his reliance on negotiating his way into a number of bodies to provide the assurance to which Parliament is entitled. That is the absolute nub of the situation. The C&AG must, as of right, have the ability to act at a time that he feels appropriate to seek the assurances that he is pledged to give to Parliament. I support entirely what the noble Baroness, Lady Sharp, and my noble friend have said. I believe that we should support the amendment.
  Lord McIntosh of Haringey: My Lords, on Report last week we had a full debate on the amendments which were then tabled by the Conservative Opposition. Although I made it entirely clear that we did not agree with the amendments—I shall make it clear that we do not agree with the thrust of the change that is proposed—at least we dealt with amendments which had some kind of internal coherence and some kind of relationship to the speeches made in support of them.
  The three amendments we are considering in the group before us today are so much more irrational and extreme that it is difficult to conduct a rational debate on them. They are not only worse than the amendments we considered last week. They are in stark contrast to the clear provision the Government have already made in the Bill to deal with this issue.
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  The provisions of subsections (6) and (7) of Clause 25—this has not been mentioned once today by Opposition spokesmen—allow the Treasury by order, following consultation with the Comptroller and Auditor General, and subject to affirmative resolutions by both Houses of Parliament, to make him the auditor of a public body even where the current legislation governing that body currently prohibits the Comptroller and Auditor General from being the auditor. This, of course, could not apply to companies which I shall mention in a moment.
  This provision will enable any recommendations which the review of the noble Lord, Lord Sharman, makes concerning the auditor of non-departmental bodies to be implemented without primary legislation. I believe that that is the assurance which the noble Baroness, Lady Sharp, sought last week. Of course I cannot say in advance that we shall agree with every recommendation that the review group makes as I do not know what they will comprise. However, we can implement them as we have subsequently included provisions in the Bill to make that possible.
  At Report the noble Lord, Lord Higgins, somewhat uncharitably described the review of the noble Lord, Lord Sharman, as a red herring. That is not the case. The review is an opportunity, such as we have not had before, to consider in detail and on a case by case basis what represents the most appropriate audit arrangements for these bodies. The Government believe that the results of the study of the noble Lord, Lord Sharman, will provide the basis for future policy in this area and in the other areas to be covered by the review.
  The noble Lord, Lord Higgins, asked me again about the steering group. I cannot go much further than I did on the previous occasion we discussed this matter. The job of the steering group is to steer. As to the relationship between the steering group and the review group, I can hardly comment on that as the steering group meets for the first time later this month. At that stage the detailed relationship will be worked out. It seems absurd to pre-empt the results of the work of the noble Lord, Lord Sharman, through amendments of the kind proposed.
  I also remind the House of the considerable powers that the Comptroller and Auditor General already enjoys in relation to non-departmental public bodies where he is not the auditor. The noble Lord, Lord Higgins, and the noble Baroness, Lady Sharp, have heard me make that point on several occasions. Therefore, I address my remarks to the noble Lords, Lord Freeman and Lord Shaw, as it appears from their remarks that this point is not clear. It is simply not true to say that unless the C&AG is the auditor of a particular body, that body is not properly accountable to Parliament. It is certainly not true to say—as the noble Lord, Lord Freeman, appeared to suggest—that somehow non-departmental public bodies will not be subject to resource accounting. If the noble Lord seeks an assurance on that point, I give it to him gladly. The C&AG has inspection rights in respect of all non-departmental public bodies. That means that he already has the access needed to investigate and to

  241
  report to Parliament on any irregularity or impropriety discovered at a non-departmental public body.
  Most importantly, under the National Audit Act 1983 he has the right to carry out value-for-money studies at all of these bodies. In many respects it is these studies rather than matters arising from routine financial audit which are the most important form of parliamentary control. Value-for-money reports of both departments and non-departmental public bodies normally account for about 40 of the 50 or so hearings held each year by the Public Accounts Committee. That means that even where he is not the auditor, the Comptroller and Auditor General already has the powers to hold these bodies properly to account.
  Turning to the amendments, when Amendment No. 3 was tabled I thought that it was an attempt to correct the manifest defects in Amendment No. 1 and that the noble Lord, Lord Higgins, would speak to that amendment instead of to Amendment No. 1. The proposed new clause in Amendment No. 1 is similar to the one tabled on Report. The only change seems to be one of relieving the Treasury of the duty of presenting the accounts. It does not respond in any way to the concerns that I expressed at Report stage about the deficiencies in its definition of a non-departmental public body.
  Amendment No. 1 is deficient because, as the tabling of Amendment No. 3 recognises, the definition of a non-departmental public body is defective. It is too wide and could lead to bodies such as National Health Service trusts being caught. It is definitely open to legal challenge—and the result of that could be that the courts and not the Treasury will decide which bodies the Comptroller and Auditor General can audit. That may not worry noble Lords, but certainly it will not be Parliament making the final decision.
  I cannot say that the proposed new clause in Amendment No. 3 is any kind of improvement. Indeed, it seems to me to be a good deal worse—even from the point of view of the Opposition. It gives up any attempt to define a non-departmental public body; instead it relies on a listing of those bodies which the Government decide to include in any particular year in a particular command paper. This approach would leave it entirely in the hands of the executive as to whether a particular body is included or not. Under this proposal, Parliament will have no say over which bodies are to be audited by the C&AG.
  As definitions adopted by the Government change over time, bodies may be included or excluded, with the possibility of consequent disruption to their audit arrangements. Is that really what is intended? It is even possible that at some point in the future a government will decide to stop publishing the document and information would rapidly become out of date.
  The publication referred to in the clause is not designed as a comprehensive listing of NDPBs. It lists 89 bodies—20 of which report to the Scottish Executive or Welsh Assembly—but there are more
  242
  than 200 executive NDPBs. So the listing covers only a third of all NDPBs, those spending more than £15 million a year. I do not see how relying on this document will fulfil the aim of ensuring that the C&AG is the auditor of all such bodies. The fact that the Opposition have been forced to rely on a listing of NDPBs contained in a document published by the Government highlights the impossibility of adequately defining these bodies. Relying on a government publication will remove parliamentary control.
  Amendment No. 2 is even more extraordinary. It is entirely new, and it seems strange to bring forward such an important new clause at Third Reading in the second Chamber. It would appear—although the drafting is unclear to the point of unintelligibility—to make the C&AG the auditor of all the subsidiaries and associates of NDPBs, assuming that the undefined reference to government executive non-departmental public body means NDPBs. These are mainly the trading and commercial arms of bodies such as the national museums and galleries. These bodies are set up as companies. As a matter of company law, the C&AG cannot audit companies—which at least Amendment No. 1 recognised. No such exclusion is included in this proposed clause. It is simply not possible without a change in company law.
  As I said earlier, because the proposed clause is so loosely drafted it would require the C&AG to become the auditor not only of subsidiaries but of associated companies—even if they were a small minority. It does not seem to be a recipe for encouraging public/private partnerships or for dealing with the issue of the burdens on business, which noble Lords opposite appear to have ignored. So this clause, too, is highly defective.
  Even if it were right to impose a blanket access on all NDPBs—which I think is the fundamental objective behind all of the amendments—we have shown that it is not necessary for scrutiny; we have shown that it is not necessary for parliamentary control; and we have shown that even the Comptroller and Auditor General himself does not believe it is necessary. There has never been a comment from any of the value-for-money studies that the Comptroller and Auditor General has been held back by lack of access.
  Even if any of the points raised have any validity—which they do not—each and every one of the three amendments is hopelessly defective. Amendment No. 1 is hopelessly defective, as I said, because it does not provide an adequate definition—and, heaven knows, noble Lords opposite have had three goes at this and still they have not come up with anything useful; Amendment No. 2 is hopelessly defective because it covers not only all subsidiaries but all associates, including companies—which is nonsense in company law; and Amendment No. 3 is hopelessly defective because it relies not on a definition of an NDPB but on a government command paper. This House cannot in conscience agree to these absurd amendments.
  Lord Higgins: My Lords, I am somewhat astonished by the hyperbole and the passion exercised by the Minister in replying to these amendments. We are

  243
  seeking to do something quite simple. We are saying that government bodies, in particular non-departmental public bodies, should be audited by the National Audit Office rather than by outside auditors. The Government and the noble Lord have made it clear on various occasions that they believe that is the right approach.
  At the moment we have got what has been described time and time again as a "hotchpotch". We are seeking to clear up that mess and to ensure that there is consistency between the various public bodies which, as my noble friend Lord Freeman pointed out, are spending vast amounts of public money. So far as concerns Sharman, I merely used the expression "red herring" in relation to this amendment. I find it difficult to think of any reason why the noble Lord, Lord Sharman—if he should report on this aspect of the matter—should come to the conclusion that there should be an arrangement whereby the vast majority of public bodies are audited by the National Audit Office and the Comptroller and Auditor General but some are not. If there is some extraordinary argument why a particular body should not be so audited, then Amendment No. 1 makes provision for that.
  I accept a number of the noble Lord's points so far as concerns Amendment No. 2—it is a poor thing, but mine own—and Amendment No. 3 also has various problems. But, in your Lordships' role of asking another place to think again, this is something which it is itself concerned about—particularly the PAC—and it is appropriate that this matter should go back for further consideration. I believe that what we are seeking to do is entirely justified; it will lead to an improvement in our practices and increase parliamentary responsibility and authority in relation to the executive. That being so, I therefore beg leave to seek the opinion of the House so far as concerns Amendment No. 1.
  4.9 p.m.
  On Question, Whether the said amendment (No. 1) shall be agreed to?
  Their Lordships divided: Contents, 119; Not-Contents, 129.

  Division No. 1

  CONTENTS

  Addington, L.

  Clement-Jones, L.

  Anelay of St Johns, B.

  Coe, L.

  Astor, V.

  Cope of Berkeley, L.

  Astor of Hever, L.

  Courtown, E.

  Attlee, E.

  Cowdrey of Tonbridge, L.

  Biffen, L.

  Crathorne, L.

  Blatch, B.

  Dacre of Glanton, L.

  Bradshaw, L.

  Dahrendorf, L.

  Bridgeman, V.

  Dean of Harptree, L.

  Brougham and Vaux, L.

  Denham, L.

  Burnham, L. [Teller]

  Dixon-Smith, L.

  Byford, B.

  Elles, B.

  Campbell of Alloway, L.

  Elliott of Morpeth, L.

  Camegyof Lour, B.

  Elton, L.

  Carrington, L.

  Ezra, L.

  Cavendish of Furness, L.

  Falkland, V.

  Clark of Kempston, L.

  Feldman, L.

  244

  Fookes, B.

  Northesk, E.

  Freeman, L.

  Northover, B.

  Geddes, L.

  Norton of Louth, L.

  Glenarthur, L.

  O'Cathain, B.

  Goodhart, L.

  Onslow, E.

  Goschen, V.

  Park of Monmouth, B

  Gray of Contin, L.

  Perry of Southwark, B.

  Greaves, L.

  Perry of Walton, L.

  Hamwee, B.

  Peyton of Yeovil, L.

  Hanham, B.

  Platt of Writtle, B.

  Harris of Greenwich, L.

  Plumb, L.

  Harris of Peckham, L.

  Plummer of St. Marylebone, L.

  Harris of Richmond, B.

  Prior, L.

  Haslam, L.

  Redesdale, L.

  Hayhoe, L.

  Roberts of Conwy, L.

  Henley, L. [Teller]

  Rodgers of Quarry Bank, L.

  Higgins, L.

  Roper, L.

  Hodgson of Astley Abbotts, L.

  Rotherwick, L.

  Holderness, L.

  Russell, E.

  Holme of Cheltenham, L.

  Saatchi, L.

  Hooper, B.

  Saltoun of Abernethy, Ly.

  Jacobs, L.

  Sanderson of Bowden, L.

  Jellicoe, E.

  Scott of Needham Market, B.

  Jenkin of Roding, L.

  Seccombe, B.

  Lane of Horsell, L.

  Selsdon, L.

  Lester of Herne Hill, L.

  Sharp of Guildford, B.

  Liverpool, E.

  Shaw of Northstead, L.

  Lucas, L.

  Shutt of Greetland, L.

  Luke, L.

  Stewartby, L.

  McColl of Dulwich, L.

  Stodart of Leaston, L.

  Macfarlane of Bearsden, L.

  Strathclyde, L.

  Mackie of Benshie, L.

  Taverne, L.

  McNally, L.

  Thomas of Gwydir, L.

  Maddock, B.

  Thomas of Walliswood, B.

  Mayhew of Twysden, L.

  Tordoff, L.

  Miller of Chilthorne Domer, B

  Trcfgarne, L.

  Montrose, D.

  Wade of Chorlton, L.

  Mowbray and Stourton, L.

  Wallace of Saltaire, L.

  Murton of Lindisfarne, L.

  Walmsley, B.

  Naseby, L.

  Waniock, B.

  Willoughby de Broke, L.

  Newby, L.

  Wright of Richmond, L.

  Northbrook, L.

  Young, B.

  NOT-CONTENTS

  Acton, L.

  Dormand of Easington, L.

  Ampthill, L.

  Dubs, L.

  Andrews, B.

  Elder, L.

  Archer of Sandwell, L.

  Evans of Parkside, L.

  Ashley of Stoke, L.

  Ewing of Kirkford, L.

  Bach, L. [Teller]

  Falconer of Thoroton, L.

  Barnett, L.

  Farrington of Ribbleton, B.

  Bassam of Brighton, L.

  Faulkner of Worcester, L

  Berkeley, L.

  Filkin, L.

  Bernstein of Craigweil, L.

  Fyfe of Fairfield, L.

  Billingham, B.

  Gavron, L.

  Blackstone, B.

  Gibson of Market Rasen, B.

  Blease, L.

  Gilbert, L.

  Borrie, L.

  Gladwin of Clee, L.

  Brett, L.

  Goldsmith, L.

  Brooke of Alverthorpe, L.

  Gordon of Strathblane, L

  Brookman, L.

  Goudie, B.

  Bruce of Donington, L.

  Gould of Potternewton, B.

  Burlison, L.

  Graham of Edmonton, L.

  Carter, L. [Teller]

  Grenfell, L.

  Christopher, L.

  Hardy of Wath, L.

  Clarke of Hampstead, L.

  Harris of Haringey, L.

  Clinton-Davis, L.

  Haskel, L.

  Crawley, B.

  Hayman, B.

  Currie of Marylebone, L.

  Healey, L.

  Davies of Coity, L.

  Hilton of Eggardon, B.

  Davies of Oldham, L.

  Hollis of Heigham, B.

  Desai, L.

  Howells of St. Davids, B.

  Dixon, L.

  Hoyle, L.

  Donoughue, L.

  Hughes of Woodside, L.

  245

  Hunt of Kings Heath, L.

  Rendell of Babergh, B.

  Irvine of Lairg, L. (Lord Chancellor)

  Richard, L.

  Rogers of Riverside, L.

  Islwyn, L.

  Roll of Ipsden, L.

  Jeger, B.

  Sainsbury of Turville, L.

  King of West Bromwich, L.

  Sawyer, L.

  Kirkhill, L.

  Scotland of Asthal, B.

  Laming, L.

  Serota, B.

  Layard, L.

  Sewel, L.

  Lipsey, L.

  Shepherd, L.

  Lofthouse of Pontefract, L.

  Shore of Stepney, L.

  Longford, E.

  Simon, V.

  Macdonald of Tradeston, L.

  Smith of Gilmorehill, B.

  McIntosh of Haringey, L.

  Smith of Leigh, L.

  MacKenzie of Culkein, L.

  Stallard, L.

  Mackenzie of Framwellgate, L.

  Stoddart of Swindon, L.

  Merlyn-Rees, L.

  Strabolgi, L.

  Milner of Leeds, L.

  Symons of Vemham Dean, B

  Mishcon, L.

  Taylor of Blackburn, L.

  Mitchell, L.

  Taylor of Gryfe, L.

  Morgan, L.

  Thornton, B.

  Morris of Castle Morris, L.

  Tomlinson, L.

  Morris of Manchester, L.

  Turnberg, L.

  Nicol, B.

  Turner of Camden, B.

  Palmer, L.

  Uddin, B.

  Parekh, L.

  Varley, L.

  Patel, L.

  Warner, L.

  Paul, L.

  Warwick of Undercliffe, B.

  Peston, L.

  Whitaker, B.

  Pitkeathley, B.

  Whitty, L.

  Plant of Highfield, L.

  Wilkins, B.

  Ponsonby of Shulbrede, L.

  Williams of Elvel, L.

  Prys-Davies, L.

  Williams of Mostyn, L.

  Ramsay of Cartvale, B.

  Williamson of Horton, L.

  Randall of St. Budeaux, L.

  Woolmer of Leeds, L.

  Resolved in the negative, and amendment disagreed to accordingly.
  4.19 p.m.
  [Amendments Nos. 2 and 3 not moved.]
  Clause 8 [Comptroller and Auditor General: access to information]:
  Viscount Bridgeman Viscount Bridgeman moved Amendment No. 4:
  Page 5, line 31, leave out ("of a government department's accounts").
  The noble Viscount said: My Lords, in moving Amendment No. 4, I should like to speak also to Amendments Nos. 5 to 9. We moved a similar amendment on Report. At that stage the Minister told the House that the amendment did not address the concerns he had expressed in Committee. I must ask the Minister to think again. I suggest to the House that a number of points require further consideration. I shall take those points in turn. First, the Government said that the amendment would significantly increase the C&AG's right of access. It did not. It translated existing negotiated practice into statute. That is an important point which was not addressed by the Minister in reply to my previous amendment. I was pleased to hear my noble friend Lord Shaw make that point also. Secondly, the Government said that the amendment would allow the C&AG to follow public money wherever it went. But the amendment limits access to documents to which the NDPBs can obtain access. Thirdly, the Government said that it would lead to the duplication of work of other departments. As I understand it, it is not the C&AG's intention to
  246
  have a programme of routine monitoring. The power of access will be exercised only for a specific purpose. The Minister also suggested that the powers would deter contractors from coming forward to compete for PFI work. Such contractors do come forward in numbers despite the fact that the Government have already agreed to give such contractors access.
  The Government had a further objection. They said that the provision would increase the right of access of the C&AG far beyond what is reasonable. As my noble friend Lord Freeman pointed out, the C&AG is effectively the servant of Parliament and it is for Parliament rather than the Government—in practice, civil servants—to decide what he reasonably needs in order to carry out his work for Parliament. Our amendment is designed to extend the C&AG's statutory rights but—I repeat this point—only in a way which replaces negotiated access. The Public Accounts Committee has already stated that it wants access to be more robust and more consistent. I quote the words of the ninth report of the Public Accounts Committee:
  "In order to examine the accountability of departments, the C&AG needs matching statutory rights of access so he can give Parliament independent assurance that public funds have been spent properly".
  As I stated on Report, the present regime of negotiation is time-wasting, somewhat unseemly and threatens our independence. The Government have already agreed that the C&AG should have a right of access to contractors, but the terms of access have to be written into each and every contract. Quite simply, such terms are often missed. The Minister mentioned the Housing Corporation and the disposition of its funds. The C&AG has already reported individually on the handling of funds by a number of housing associations. That is a matter of established practice.
  I return to the question of overlap. The C&AG is seeking statutory powers which will have the effect of saving time and effort. They will avoid the possibility of errors in drafting contracts and will be used only in specific instances where there is a specific purpose. To the question, "How do you know they will?", the answer is, "The C&AG is, like any other public body, accountable to Parliament for the efficient use of his time and resources". At Report stage, the Minister gave the example of the supplier of paper clips. The extent to which the paper clip supplier has made available his records to the government department or NDPB with which he contracts will, under our amendment, be available to the C&AG, but no more than that.
  The Minister has difficulty with the matter of access to documents which are held or controlled by a non-departmental public body on the ground, inter alia, that it is difficult to define what an NDPB is. That sounds like inhibiting the C&AG from making proper investigations because, through a difficulty with definition, it might result in his straying into places where he should not. I suggest that the question of definition is not insurmountable and could be solved with the co-operation of the C&AG. I would also point

  247
  out that the inclusion of "accounting officer" in Amendment No. 9 expressly corrals the extent of powers of access to NDPBs. I beg to move.
  Baroness Sharp of Guildford: My Lords, I do not wish to delay the House with a lengthy speech. We discussed this matter at considerable length in both Grand Committee and on Report. We have consistently supported the Opposition on the issue of access. As I made clear on Report:
  "The Comptroller and Auditor General has audit responsibility, but at present he does not have all the powers necessary to fulfil that responsibility".—[Official Report, 4/7/00; col. 1434.]
  He has to rely on government departments for access to documents which are relevant to the pursuit of his duties. It is important that he has those powers. We therefore support the amendment.
  Lord Shaw of Northstead: My Lords, I support the amendments brought forward by my noble friend Lord Bridgeman. Clause 8(1) of the Bill states:
  "For the purposes of an examination by the Comptroller and Auditor General of a government department's accounts—
  (a) he shall have a right of access at all reasonable times to any of the documents relating to the department's accounts".
  I suspect that those words will be interpreted as meaning freedom of access only to those documents relating to the financial regularity of the account. But the duties of the C&AG run much wider than that, not least in looking at the value for money aspects of a department's activities. For example, at Question Time yesterday I asked the Minister this question:
  "My Lords, is the Taylor report available to the Comptroller and Auditor General?"
  Perhaps I should have asked, "Will it be available after the Bill becomes law?" The Minister replied:
  "My Lords, I do not think that it is a financial report, so it does not come within the scope of the Comptroller and Auditor General's responsibilities".—[Official Report, 11/7/00; col. 130.]
  As I understand it, the Taylor report concerns the smuggling of tobacco. Is the Minister saying that there will be no circumstances whereby the Taylor report might be relevant to any future investigations of the C&AG? I find that difficult to accept. If, in fact, the C&AG felt that the report was relevant to his inquiries, my fear is that the department might refuse to make it available. If that were to be the case, perhaps I may refer the Minister to a debate in the other place on 24th October 1985. In that debate I referred to a meeting of the PAC where the basis for certain actions had been contained in a letter from the Permanent Under-Secretary of State. At that meeting we asked why the letter had not been available. We were told that it referred to a certain helpful report submitted privately to the Secretary of State for Defence by the then Mr Peter Levene, now, happily, with us as the noble Lord, Lord Levene. It was submitted by him when he was in a position in industry and before he became a member of the staff of the MoD. Since that report influenced the ministry's decision, the C&AG had felt it right to demand sight of it. The PAC agreed and suspended
  248
  its own inquiries until the report was produced. It was produced at our next meeting. At the end of that debate, Mr Moore, then the Financial Secretary to the Treasury, said:
  "My hon. friend the Member for Scarborough also mentioned what is known as the Levene report. All I can say is that there is no reason to suppose that any similar reports in future will not be released".—[Official Report, Commons, 24/10/85; col. 493.]
  Perhaps I may deal briefly with the amendment to Clause 8 which would give the C&AG access to all information to which the European Court of Auditors has access in relation to the United Kingdom. I was a Member of the European Parliament when the European Court of Auditors was set up in 1977. I was also Rapporteur for the Financial Regulation of 1977.
  In setting up the Court of Auditors, it was obvious that much of the revenue and expenditure transactions of the Community were nationally based. Therefore, the more that the various national audit bodies could become involved in working with the European Court of Auditors, the better; otherwise, the Court of Auditors would have—and has had—a quite impossibly large task. There must be a continuing need for the European Court of Auditors to seek to establish as much co-operation and confidence as possible in the work of each of the national audit authorities.
  In this country we are blessed with a first-class National Audit Office under the leadership of an outstanding C&AG. It would go greatly against the interests both of this country and of the European Court of Auditors if we did not assist in achieving the utmost co-operation between the two bodies.
  If the C&AG was in a position to act on behalf of the European Court of Auditors when required, that would also remove the resentment that I have already heard expressed; namely, "Why should the European Court of Auditors be allowed to come nosing around our affairs?" Of course, occasions will arise when it must do so, but wherever possible, it would be much more acceptable if it could seek the assurances it requires through the good offices of the C&AG. I strongly support my noble friend's amendment.
  4.30 p.m.
  Lord McIntosh of Haringey: My Lords, I am faced with the difficulty—this happens from time to time—of having to decide whether to respond to the speeches or to the amendment. It is clear that the speeches that have been made—I have listened to them with great care—bear no relationship to the amendments before us. However, before I try to respond to the amendments, which I believe is my duty, I should say a few words to the noble Lord, Lord Shaw of Northstead.
  I believe that I was wrong in what I said yesterday and I am glad to have been given an opportunity to correct it. I was taken by surprise by his question about the Comptroller and Auditor General and the Taylor report on tobacco smuggling. From Section 8 of the National Audit Act 1983 it is quite clear that the

  249
  Comptroller and Auditor General has separate rights of access to value for money studies, and that such access is not limited to financial information.
  Lord Shaw of Northstead: My Lords, I thank the Minister. I am grateful for that reply.
  Lord McIntosh of Haringey: My Lords, I shall take advice as to whether there is any other way in which I should put the record straight. However, it is clear that I was wrong on that occasion.
  Perhaps I may now turn to the amendments. The Opposition have responded to the point I made on Report; namely, that additional access is not needed for the purpose of auditing departmental accounts. Indeed, the Comptroller and Auditor General himself admitted that in giving evidence to the Public Accounts Committee. However, the Opposition have responded in the most extraordinary way: by removing the requirement that the clause should apply to departmental accounts, which is what is meant in Amendments Nos. 4 and 5.
  That will not make matters better; it will make them very much worse. These amendments would divorce this clause from the subject matter of the Bill, which is government accounts, and instead turn it into a general power of access for the Comptroller and Auditor General. By referring in general terms to "examinations", it would apply both to his value for money examinations carried out under the National Audit Act and to the audit of accounts. The amendments appear to be a way of changing the National Audit Act by stealth. This Bill is not, and never has been, a replacement for the National Audit Act 1983. It seems extraordinary to be proposing at this late stage of the Bill—at Third Reading in the second House—amendments which open up entirely new topics and suggest sweeping changes which have not been subject to any debate or consultation and which are not based on any evidence of problems of access.
  Amendment No. 8 would give the Comptroller and Auditor General access to any body to which a department or one of its NDPBs—I shall not labour the point about the definition—has, or can obtain, access. Furthermore, it repeats an amendment discussed on Report. The effect would be to allow the NAO access to a very wide range of businesses and even individuals who have financial dealings with government.
  Amendment No. 7 would give the Comptroller and Auditor General the same rights of access as the European Court of Auditors has in the United Kingdom. I must admit that I am astonished that a member of the Conservative Party, who has trumpeted his concern for UK sovereignty, would wish to make the access rights of Parliament's auditor partly dependent on the rights enjoyed by a European body under the European treaties. That surely represents a unilateral surrender of parliamentary sovereignty.
  250
  It is clear that the intention behind the amendment, contrary to what was said by the Official Opposition at earlier stages of the Bill, is to enable the Comptroller and Auditor General to be able to follow public money wherever it goes. That is confirmed if we look at Article 248(3) of the European Treaty which states:
  "The audit shall be based on records and, if necessary, performed on the spot … including in the premises of any natural or legal person in receipt of payments from the budget".
  That would give the C&AG access to, among others, every farmer in the country. Perhaps I may point out that Article 248(3) is very clear that the Court of Auditors should co-operate with other auditors and with national governments in exercising these rights. The amendment contains no such safeguards.
  How can we reconcile the sweeping powers of access conferred by Amendments Nos. 7 and 8 which, if the other amendments in this group are accepted will no longer even be tied to the audit of departmental accounts, with the concerns expressed by the Government and, as I mentioned on Report, by the British Chambers of Commerce and the Federation of Small Businesses; namely, that additional powers for the Comptroller and Auditor General could result in additional burdens on business, over-regulation and an overlap of functions? The simple fact is that they cannot be reconciled. As I said earlier, if my noble friend Lord Haskins were in the House today, he would be horrified at the suggestion.
  Amendments Nos. 7 and 8 would not have the effect, as the Opposition would have us believe, of simply entrenching in statute the C&AG's existing access rights, thus putting him on a par with the Court of Auditors. What they will do is to give him extensive rights of access, unrelated to the audit of departments' accounts, to anyone who has financial dealings with government.
  It has been said already that this clause is not essential to the central purpose of the Bill, which is the introduction of resource accounting. However, by introducing the clause, we sought to take the opportunity to make provision to ensure that the Comptroller and Auditor General has the access he needs to carry out the audits of departmental accounts. The clause as it stands already ensures that he has that necessary access, so additional amendments are unnecessary.
  This was the concern expressed by the noble Baroness, Lady Sharp, at an earlier stage. I understand that point. However, as I said when we debated this on Report, the Comptroller and Auditor General has already audited the first "dry-run" sets of resource accounts. Although he qualified many of these, he did not once do so on the ground of insufficient access. Even more tellingly, on 7th June the Comptroller and Auditor General said, in giving evidence to the Public Accounts Committee, that although he would like additional access, he does not need it in order to audit departmental accounts. I think that that in itself renders Amendments Nos. 7 and 8 redundant.
  The Government have responded to a number of the key concerns expressed by the Comptroller and

  251
  Auditor General and the Public Accounts Committee. At Report stage in the Commons the Government tabled a completely redrafted version of this clause to take account of those concerns. In particular, we have added what is now Clause 8(2)(b) to give the Comptroller and Auditor General a statutory right of access to third parties which hold departmental financial records. This deals with one of the major concerns expressed by the Comptroller and Auditor General and the PAC that over the past few years many departments have contracted out the operation of their accounting and other information technology operations. As a result, the Comptroller and Auditor General needs a statutory right of access to do his audit of departmental accounts. The new subsection recognises that and provides him with that power.
  More generally, the Government have accepted that the whole area of audit and accountability needs to be carefully looked at. That is why we have set up the review under the noble Lord, Lord Sharman. We recognise that Parliament must be satisfied that the Comptroller and Auditor General has the powers he needs to do his job on behalf of Parliament. But that must be balanced against legitimate concerns that to give the Comptroller and Auditor General further powers may result in additional burdens on business, over-regulation and an overlap of functions.
  These are wide-ranging and complex issues. The Government do not believe that they can be adequately dealt with during the passage of a Bill that is concerned with reforming the way the Government do their accounts and, therefore, deals only with audit issues to the extent that they impact on those accounts. The study chaired by the noble Lord, Lord Sharman, can look at these issues in the detail they require and deserve. The Government believe that that review provides the necessary basis. The Government have as much interest as Parliament in ensuring that the Comptroller and Auditor General delivers independent and high quality audit scrutiny.
  The new amendments tabled by the Opposition are so different from those tabled on Report that I must appeal directly to the Liberal Democratic Party. I understand its support for the previous amendments, but I do not see how it can conceivably support these amendments. We were told that the amendments tabled on Report were necessary to enable the Comptroller and Auditor General to carry out his audit of departmental accounts. Although we understand that, we do not share the view of those who have sympathy for that proposal. But the amendments that the House is being asked to consider today are of a completely different order. They break the fundamental link between the clause and the subject-matter of the Bill.
  At this very late stage we are being asked to consider changes which would make this clause a general purpose right of access for the Comptroller and Auditor General that would cover his value for money examinations as well as his audit of accounts. The amendments raise entirely new issues which have not
  252
  been the subject of previous amendments, debate or consultation at any time during the passage of this Bill. We cannot accept them.
  Viscount Bridgeman: My Lords, the Minister has, quite understandably, coupled Amendments Nos. 7 and 8. I have listened to his comments on European legislation and shall study them. I do not intend to press that particular amendment. I should like to uncouple Amendments Nos. 7 and 8. Amendment N o. 8 is the nub of our case in this matter. I do not believe that the Minister has addressed the question of negotiation and time-wasting. We have built safeguards into this amendment which applies only to documents to which an NDPB has or can obtain access. We have also built in a provision about the position of the accounting officer. This amendment is fundamental to the Bill. We seek to test the opinion of the House on Amendment No. 4.
  4.44 p.m.
  On Question, Whether the said amendment (No. 4) shall be agreed to?
  Their Lordships divided: Contents, 124; Not-Contents, 122.

  Division No. 2

  CONTENTS

  Ackner, L.

  Goodhart, L.

  Addington, L.

  Goschen, V.

  Anelay of St Johns, B.

  Gray of Contin, L.

  Astor, V.

  Greaves, L.

  Astor of Hever, L.

  Hanham, B. [Teller]

  Attlee, E.

  Harris of Greenwich, L.

  Barker, B.

  Harris of Peckham, L.

  Biffen, L.

  Harris of Richmond, B.

  Blatch, B.

  Hayhoe, L.

  Brabazon of Tara, L.

  Henley, L. [Teller]

  Bradshaw, L.

  Higgins, L.

  Bridgeman, V.

  Hodgson of Astley Abbotts, L.

  Brougham and Vaux, L.

  Holderness, L.

  Byford, B.

  Holme of Cheltenham, L.

  Campbell of Alloway, L.

  Hooper, B.

  Carncgy of Lour, B.

  Howell of Guildford, L.

  Carrington, L.

  Hylton-Foster, B.

  Cavendish of Furness, L.

  Jacobs, L.

  Clark of Kempston, L.

  Jellicoe, E.

  Clement-Jones, L.

  Jenkin of Roding, L.

  Cope of Berkeley, L.

  Lane of Horsell, L.

  Courtown, E.

  Lester of Herne Hill, L.

  Cowdrey of Tonbridge, L.

  Liverpool, E.

  Crathorne, L.

  Lucas, L.

  Crickhowell, L.

  Luke, L.

  Dacre of Glanton, L.

  McColl of Dulwich, L.

  Dean of Harptree, L.

  Macfarlane of Bearsden, L.

  Denham, L.

  Mackie of Benshie, L.

  Dixon-Smith, L.

  McNally, L.

  Eden of Winton, L.

  Maddock, B.

  Elliott of Morpeth, L.

  Mayhew of Twysden, L.

  Elton, L.

  Miller of Chilthorne Domer, B.

  Ezra, L.

  Montrose, D.

  Falkland, V.

  Mowbray and Stourton, L.

  Fookes, B.

  Murton of Lindisfarne, L.

  Fraser of Carmyllie, L.

  Naseby, L.

  Freeman, L.

  Newby, L.

  Geddes, L.

  Northbrook, L.

  Glenarthur, L.

  Northesk, E.

  Glentoran, L.

  Northover, B.

  253

  Norton of Louth, L.

  Sanderson of Bowden, L.

  Oakeshott of Seagrove Bay, L.

  Scott of Needham Market, B.

  O'Cathain, B.

  Seccombe, B.

  Onslow, E.

  Selsdon, L.

  Oxfuird, V.

  Sharp of Guildford, B.

  Palmer, L.

  Shaw of Northstead, L.

  Park of Monmouth, B.

  Shutt of Greetland, L.

  Peel, E.

  Soulsby of Swaffham Prior, L.

  Perry of Southwark, B.

  Stodart of Leaston, L.

  Peyton of Yeovil, L.

  Strange, B.

  Platt of Writtle, B.

  Strathclyde, L.

  Plumb, L.

  Taverne, L.

  Plummer of St. Marylebone, L.

  Thomas of Gwydir, L.

  Prior, L.

  Thomas of Walliswood, B.

  Redesdale, L.

  Tordoff, L.

  Roberts of Conwy, L.

  Trefgarne, L.

  Rodgers of Quarry Bank, L.

  Waddington, L.

  Roper, L.

  Wallace of Saltaire, L.

  Rotherwick, L.

  Walmsley, B.

  Russell, E.

  Warnock, B.

  Ryder of Wensum, L.

  Williams of Crosby, B.

  Saltoun of Abernethy, Ly.

  Young, B.

  NOT-CONTENTS

  Acton, L.

  Hayman, B.

  Andrews, B.

  Healey, L.

  Archer of Sandwell, L.

  Hilton of Eggardon, B.

  Ashley of Stoke, L.

  Hollis of Heigham, B.

  Bach, L. [Teller]

  Howells of St. Davids, B.

  Barnett, L.

  Hoyle, L.

  Bassam of Brighton, L.

  Hughes of Woodside, L.

  Berkeley, L.

  Hunt of Kings Heath, L.

  Bernstein of Craigweil, L.

  Irvine of Lairg, L. (Lord Chancellor)

  Billingham, B.

  Blackstone, B.

  Islwyn, L.

  Blease, L.

  Jeger, B.

  Borrie, L.

  King of West Bromwich, L.

  Brett, L.

  Kirkhill, L.

  Brooke of Alverthorpe, L.

  Layard, L.

  Brookman, L.

  Lipsey, L.

  Bruce of Donington, L.

  Lofthouse of Pontefract, L.

  Burlison, L.

  Macdonald of Tradeston, L.

  Carter, L. [Teller]

  McIntosh of Haringey, L.

  Christopher, L.

  McIntosh of Hudnall, B.

  Clarke of Hampstead, L.

  MacKenzie of Culkein, L.

  Clinton-Davis, L.

  Mackenzie of Framwellgate, L

  Crawley, B.

  Merlyn-Rees, L.

  Currie of Marylebone, L.

  Milner of Leeds, L.

  Davies of Coity, L.

  Mishcon, L.

  Davies of Oldham, L.

  Mitchell, L.

  Desai, L.

  Morgan, L.

  Dixon, L.

  Morris of Castle Morris, L.

  Donoughue, L.

  Morris of Manchester, L.

  Dormand of Easington, L.

  Nicol, B.

  Dubs, L.

  Parekh, L.

  Elder, L.

  Patel of Blackburn, L.

  Evans of Parkside, L.

  Peston, L.

  Ewing of Kirkford, L.

  Pitkeathley, B.

  Falconer of Thoroton, L.

  Plant of Highfield, L.

  Farrington of Ribbleton, B.

  Ponsonby of Shulbrede, L.

  Faulkner of Worcester, L.

  Prys-Davies, L.

  Filkin, L.

  Ramsay of Cartvale, B.

  Fyfe of Fairfield, L.

  Randall of St. Budeaux, L.

  Gavron, L.

  Rendell of Babergh, B.

  Gibson of Market Rasen, B.

  Richard, L.

  Gilbert, L.

  Rogers of Riverside, L.

  Gladwin of Clee, L.

  Sainsbury of Turville, L.

  Goldsmith, L.

  Sawyer, L.

  Gordon of Strathblane, L.

  Scotland of Asthal, B.

  Gould of Potternewton, B.

  Scrota, B.

  Graham of Edmonton, L.

  Sewel, L.

  Grenfell, L.

  Shepherd, L.

  Hardy of Wath, L.

  Shore of Stepney, L.

  Harrison, L.

  Simon, V.

  Haskel, L.

  Smith of Gilmorehill, B.

  254

  Smith of Leigh, L.

  Walker of Doncaster, L.

  Stoddart of Swindon, L.

  Warner, L.

  Strabolgi, L.

  Warwick of Undercliffe, B.

  Symons of Vernham Dean, B

  Watson of Invergowrie, L.

  Whitaker, B.

  Taylor of Blackburn, L.

  Whitty, L.

  Thornton, B.

  Wilkins, B.

  Tomlinson, L.

  Williams of Elvel, L.

  Turnberg, L.

  Williams of Mostyn, L.

  Turner of Camden, B.

  Williamson of Horton, L.

  Uddin, B.

  Woolmer of Leeds, L.

  Resolved in the affirmative, and amendment agreed to accordingly.
  4.54 p.m.
  The Deputy Speaker (Baroness Serota): My Lords, if Amendment No. 5 is agreed to, I cannot call Amendment No. 6.
  Lord Higgins Lord Higgins moved Amendment No. 5:
  Page 5, line 32, leave out ("of the documents relating to the department's accounts") and insert ("relevant documents").
  On Question, amendment agreed to.
  [Amendments Nos. 6 and 7 not moved.]
  Lord Higgins Lord Higgins moved Amendment No. 8:
  Page 5, line 38, leave out from ("documents") to end of line 42 and insert ("—

  (a) which are held or controlled by a government department or a relevant non-departmental public body, or

  (b) which are documents to which a government department or a relevant non-departmental public body has, or can obtain, access.").

  On Question, amendment agreed to.
  Lord Higgins Lord Higgins moved Amendment No. 9:
  Page 6, line 2, at end insert—
  ("(4) The rights of access conferred by subsection (1) shall not be exercisable in relation to any document relating primarily to accounts which—

  (a) are subject to audit by the Auditor General for Scotland or the Auditor General for Wales, and are not also subject to audit by the Comptroller and Auditor General, or

  (b) are subject to audit under section 2 of the Audit Commission Act 1998 or section 97 of the Local Government (Scotland) Act 1973 and do not relate to a body specified in section 98(1) of the National Health Service Act 1977.

  (5) In this section "relevant non-departmental public body" means a non-departmental public body which is one for which the department whose accounts are undergoing examination is responsible; and for this purpose "non-departmental public body" means a body—

  (a) which is not a government department or comprised within a government department.

  (b) which exercises public functions of a governmental nature which might otherwise fall to be exercised by central government, and

  (c) an officer of which has been designated by a government department as its accounting officer in respect of the preparation of its accounts.").

  On Question, amendment agreed to.
  Clause 30 [Commencement]:
  Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 10:
  Page 15, line 14, leave out ("19") and insert ("20").
  The noble Lord said: My Lords, unlike the rest of the Bill the clauses relating to Partnerships UK are to come into force as soon as Royal Assent is achieved. Therefore, when we added at Report stage the clause enabling the devolved administrations to invest in Partnerships UK, now Clause 20, we should also have amended the commencement procedures. Due to an oversight, for which I apologise, we failed to do so. The amendment corrects that oversight. I beg to move.
  On Question, amendment agreed to.
  Lord McIntosh of Haringey: My Lords, I beg to move that the Bill do now pass.
  Moved, That the Bill do now pass.—(Lord McIntosh of Haringey.)
  On Question, Bill passed, and returned to the Commons with amendments.

  Regulation of Investigatory Powers Bill
  4.55 p.m.
  Report received.
  Clause 2 [Meaning and location of "interception" etc.]:
  Lord Bassam of Brighton Lord Bassam of Brighton moved Amendment No. 1:
  Page 4, line 32, leave out ("address or other") and insert ("traffic").
  The noble Lord said: My Lords, I wish to start today's proceedings by recording my gratitude to all noble Lords opposite for the constructive way in which they have approached debates on this Bill to date. I know that some noble Lords have had considerable difficulties with the Bill as regards its drafting and introduction. I know also that the importance of this Bill and of early Royal Assent are well known to noble Lords opposite. In the light of these potentially conflicting concerns, I have greatly appreciated the spirit in which noble Lords have approached the difficulties. That was particularly the case as regards a number of amendments to Part III of the Bill tabled at short notice by the Government at Committee stage. I know that these amendments were moving in the direction favoured by noble Lords opposite, but none the less the amendments were tabled very much at short notice and I was grateful for the general tolerance of that fact.
  Things have been no less easy in respect of the short time period between Committee and Report stages. Again, I have particularly appreciated attempts by noble Lords opposite to explain their position to us and indeed to give us prior warning of amendments, where possible. I hope that noble Lords believe that we on the Government side have been able to return the favour although I still feel some need to express apologies for the late tabling of some of our amendments.
  I must also mention the codes of practice supporting the Bill which were published on Monday of this week. I had undertaken to publish them in advance of Report stage. I regret that it was not possible to publish them sooner. I also regret the imperfect state of the preliminary drafts: there is still some considerable amount of work to be undertaken. None the less, I hope that the publication of the drafts is appreciated as giving considerable information as to the Government's intentions in this area.
  There are still issues to be resolved and the drafts were published before consultation with key constituents was possible. In particular, these drafts have not been shared with colleagues in industry before publication. Experience tells us that we would normally expect to amend the drafts, possibly in some significant areas, once we have had the benefit of input from experts in industry. We have greatly appreciated that input all the way through the Bill. None the less, I hope that the effort in publishing them at this time is helpful and appreciated and that the general input of the codes informs the deliberations of this House rather than confuses it.
  There are some particular areas in the codes which we know require further informal consultation before we can release them for formal consultation under Clause 69 of this Bill, once enacted. These are in addition to the issues that may well be of most interest to industry. I am aware that we also require further work in consultation on the provision affecting legal, medical and spiritual confidentiality. That is one issue which is relevant to all four codes. Separately, we do appreciate the need to develop further appropriate wording to reflect the well developed arrangements which already exist between agencies and telecoms operators regarding the supply of communications data. In this respect, the extant ACPO codes are rather more developed than the codes we were able to publish on Monday. But I can give a commitment that we shall be seeking to develop the codes published on Monday more in line with the ACPO codes on communications data, perhaps explicitly reflecting higher levels of authorisation for particular types of access to communications data.
  That concludes my opening remarks in respect of the debate on this Bill. I look forward to further debates today and tomorrow. I record once more my gratitude to noble Lords opposite for helping us with the background to some of the amendments that have been tabled in order that we can have a positive and constructive debate on the main issues.
  In moving government Amendment No. 1, I speak also to Amendments No. 2 to 4, 6 and 99. These cover the definition of "communications data" which has been the subject of much debate and press interest, particularly since the Government introduced the amendment to tackle dial-through fraud. The noble Lord, Lord Lucas, was the first to voice his concerns, and his views were supported by industry representatives as well as other noble Lords.
  During the debate on Chapter II on 19th June, I undertook to return to the House with a new definition of "communications data" which reflected the

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  distinction more clearly. Since then a great deal of work has gone into producing a refined definition which could address the needs of all interested parties. At the time of that debate I explained that the new definition would have to satisfy three elements. It would have to include in what manner and by what method a person communicates with another person or machine, but exclude what they say or what data they pass once the connection has been established (that is, content of communications) and still allow dial-through fraud to be investigated properly.
  We believe that the amendments more closely defining "traffic data" as a sub-category of "communications data" which stand today in my name do just that. They ensure that the definition cannot be interpreted to include any content of communication or interaction with websites.
  Because the new definition is necessarily fairly complicated, it may assist noble Lords if I explain what each part is designed to achieve. For all of the data in paragraphs (a) to (d) to count as communications data, they have to meet the test in Clause 2(5)(a)—that is, they have to be comprised in or attached to a communication for the purpose of a telecommunications system by which the communication is being transmitted. The first two parts are relatively self-explanatory: new paragraph (a) covers subscriber information; and new paragraph (b) covers routing information. New paragraph (c) is the provision covering data which actuate apparatus—this is the part designed to address dial-through fraud. New paragraph (d) catches the data which are found at the beginning of each packet in a packet switched network which indicates which communications data attach to which communication. Finally, the tailpiece to the new definition puts beyond any doubt that in relation to Internet communications, traffic data stop at the apparatus within which files or programs are stored, so the traffic data may identify a server but not a website or page.
  I hope that that careful explanation helps to expedite the debate. I trust that it is clear and uncomplicated. I beg to move.
  5 p.m.
  Lord Cope of Berkeley: My Lords, we are grateful for the Minister's remarks. Perhaps I may refer to them as the noble Lord's "apologies" for some of the difficulties with the Bill. I am grateful also for his understanding of our severe difficulties in dealing with the Bill. For those us who are neither lawyers nor electronics experts, trying to translate the arguments of one group of persons to another and to draft amendments capable of being discussed in your Lordships' House has been a great test.
  The Minister referred to the codes of practice. We are also grateful to him for publishing them although in a highly draft state. Nevertheless, it is still valuable to have sight of them at this stage.
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  The Bill is also in a fairly highly draft state although we are moving towards the end of our consideration of it. It is still being severely criticised by a wide range of bodies and companies, not only those operating in the field of the Internet, and so on, but also charities, organisations and trade unions of every kind. For that reason, we and others outside the House appreciate the willingness of the Minister and his colleagues radically to amend the Bill. The attitude of the past few days has been in sharp contrast with that of Mr Charles Clarke at the end of consideration of the Bill in another place when he expressed the view that your Lordships' House would be offered only minor and technical amendments. We are a long way from that.
  We are all agreed—I mentioned it at Second Reading—that dial-through fraud needs to be tackled. That is part of the basis of what is being done. But we also recognise that the Government have moved very considerably in terms of the definitions by introducing the new definition of "traffic data", leaving other types of communications data subject to the full rigours of the remainder of the Bill. Although it does not divide data into quite as many different categories as many, including myself, would have wished, that is a move in the right direction.
  We have some detailed comments. It might be helpful if we discuss those in separate groupings. I do not think that that will take more time; it may make our debates more logical.
  On the main amendment describing traffic data, while we can criticise it in detail we welcome the move in principle. We are all agreed on what should be achieved by these definitions. As the Minister said, we wish to exclude content from traffic data or other data which can be got at readily. We understand the need to get hold of what are properly called "traffic data".
  Lord McNally: My Lords, I share the understanding the noble Lord expresses for the Minister's dilemma. I think that we all take the attitude that we would not have started from here—but here we are. There has been an element of the politics of the souk as the Bill has passed through your Lordships' House, with offers and counter offers. In the end I believe that what we are doing is to the credit of this House.
  The Bill emerged from the Commons with concerns expressed by civil liberties groups and the industry. We hope that we are edging towards a better Bill. The purists may find fault with the Minister's attempts to define "communications data", but it is a definition that we can live with. It is moving in the right direction and in the right spirit. Perhaps by the end of our proceedings we shall have a Bill with which we are all satisfied. But that will be the case only if we continue in the spirit of listening not because the Opposition parties want to score points but because even at this stage, and after considerable movement by the Government, there are concerns which we want to explore.
  Lord Bassam of Brighton: My Lords, I was expecting there to be more interest but in a sense I am grateful that there is not. I am grateful for the kind comments

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  made by noble Lords and for their tolerance and forbearance in respect of our changes to the Bill at this late stage.
  We are perhaps victims of our own strategy because we promised to be a listening government in this exercise as in many others. We have kept to that promise and have tried to capture the sense of concern expressed by the industry and reflected on all Benches in your Lordships' House. As was said by the noble Lord, Lord McNally, this is the House at its best looking in detail at a piece of legislation, finding it wanting in some respects and the Government able and willing to try to accommodate those real and genuine concerns.
  I trust that the amendments meet with your Lordships' satisfaction and I commend them to the House.
  On Question, amendment agreed to.
  Lord Bassam of Brighton Lord Bassam of Brighton moved Amendments Nos. 2 and 3:
  Page 4, line 40, leave out ("addresses and other") and insert ("traffic").
  Page 4, line 42, leave out subsection (6).
  On Question, amendments agreed to.
  Lord Bassam of Brighton Lord Bassam of Brighton moved Amendment No. 4:
  Page 5, line 16, at end insert—
  ("(9A) In this section "traffic data", in relation to any Communication, means—

  (a) any data identifying, or purporting to identify, any person, apparatus or location to or from which the communication is or may be transmitted,

  (b) any data identifying or selecting, or purporting to identify or select, apparatus through which, or by means of which, the communication is or may be transmitted,

  (c) any data comprising signals for the actuation of apparatus used for the purposes of a telecommunication system for effecting (in whole or in part) the transmission of any communication, and

  (d) any data identifying the data or other data as data comprised in or attached to a particular communication,

  but that expression includes data identifying a computer file or computer program access to which is obtained, or which is run, by means of the communication to the extent only that the file or program is identified by reference to the apparatus in which it is stored.").
  The noble Lord said: My Lords, I beg to move.
  Lord Cope of Berkeley Lord Cope of Berkeley moved, as an amendment to Amendment No. 4, Amendment No. 5:
  Line 5, leave out ("apparatus or location") and insert ("or apparatus").
  The noble Lord said: My Lords, although we have accepted the generality of Amendment No. 4, a detailed point was raised with me that I believe is worth putting before your Lordships' House. It concerns the use of the word "location".
  Your Lordships will appreciate that mobile telephones are becoming increasingly more sophisticated. The location of some of the newest ones can be tracked through global positioning systems or other electronic means. That means that if the location
  260
  is regarded as traffic data, which can readily be obtained by the police and other authorities, the police will be able to follow someone carrying one of the new mobile telephones without troubling further.
  I can see that that would be a great facility for the police but it could also be highly intrusive in following someone from shop to shop or from home to another location. It is not in the nature of ordinary traffic data—for instance, a telephone number—but it is a highly intrusive power.
  I am not saying that the police should never be allowed to use it; the whole Bill provides a framework for giving different levels of authority to different types of information. The question posed by the amendment is where the location of a particular mobile telephone, and hence of a particular person, should fall in the categories of information to be revealed.
  Amendment No. 4 suggests that it should he placed in the lowest category of traffic data, and therefore readily obtainable to the authorities, and that arty invasion of privacy involved should not be considered. I beg to move.
  5.15 p.m.
  Lord McNally: My Lords, I believe that the Minister can use his favourite word, "proportionality", in respect of the amendment. It has been pointed out to me that in some cases the ability to track the movement of a mobile telephone could be most important; for example, in the movement of drugs. One can there see the point of the power. However, another scenario put to me was of the noble Lord, Lord Cope, meeting Mr Portillo privately. The ability to track that would be an outrageous intrusion into his private activities.
  Lord Cope of Berkeley: My Lords, I am happy to meet Mr Portillo and I frequently do —and I do not mind who knows!
  Lord McNally: My Lords, the scenario put to me was even more lurid, but I shall go no further. In any event, as we all know, Mr Portillo prefers land lines to mobile telephones when he is plotting something.
  Returning to proportionality, one can well understand that the authorities may need such powers in relation to a serious investigation into drugs. If that were the case, surely, as the noble Lord, Lord Cope, argued, a higher rather than a lower category of authorisation should be required. It would be interesting to know why the Government have opted for the lower category.
  Viscount Goschen: My Lords, I fully recognise the concerns put forward by my noble friend Lord Cope. It would be helpful to hear from the Minister the Government's intention behind the use of the word "location". It is conceivable that there could be an oversight by the Minister or there could be a deliberate attempt to include data on the location of someone carrying a mobile telephone.
  Accessing information about the position of a mobile telephone transmission bears comparison with the planting of location devices on vehicles. It would

  261
  be helpful if the Minister could remind the House about the regime for attaching location-giving devices to vehicles.
  The proposal raises other issues. I can understand the Minister's intention in Amendment No. 4 that the word "location" should convey "address". But with modern e-mail communications and other types of data transmission, location and address rapidly diverge. One could use the same e-mail address to transmit from a fixed point or from mobile points at will.
  I believe that my noble friend Lord Cope has put his finger on an important issue and it would be interesting to hear whether the Minister intended to mean that the location data from mobile telephones should be able to be accessed through the lower category of permission. If not, I am sure that we can come up with a compromise that might clarify the issue. However, I believe that the Bill, as it is proposed to be drafted within the amendment, leaves open a very wide door.
  Lord Howell of Guildford: My Lords, I wonder whether the amendment, which my noble friend rightly has put forward, takes account of the ever-onward movement of the technologies which are moving far faster than can legislators. I think in particular of the wireless access protocol which is now progressing here in its third generation. That will give people with mobile phones access to both e-mail and the Internet, wherever they may be, and of course to the i-mode system in Japan, which many Japanese argue is superior to the WAP and, indeed, may eventually replace it. I know that it is controversial and those who invest their money in the WAP would not like to hear that. However, it is a possibility and things are moving very quickly.
  In Japan—it will happen here, too—something in the region of 60 million people have mobile telephones, of whom approximately 15 million are already on the i-mode Internet e-mailing system. All those people move about all the time. There is no question of their location existing for more than a second. By definition, they are using mobile telephones for mobile business and mobile activity. I wonder whether the drafters of the Bill have understood that the vast majority of e-mail traffic will not take place in fixed locations but will be among people who are on the move in a totally interconnected world.
  Lord Bassam of Brighton: My Lords, I am grateful to the noble Lord for moving the amendment. I believe that it will enable us to understand each other better on this issue, and I am grateful to noble Lords who have contributed to the debate.
  I turn to the amendments which relate to the new definition. Amendments Nos. 5 and 29 would exclude the word "location", as the noble Lord, Lord Cope, explained. However, there are—I believe that the noble Lord, Lord McNally, put his finger on it—many circumstances, not only in criminal investigations,
  262
  where the giving of the location of a person is critical. Let us take, for example, a person who makes a 999 call, perhaps from a telephone box, or even a child who makes a call to the emergency services from his home. Callers are not always in a position to describe their location accurately, yet the communication service provider possesses the information and passes it on to the appropriate emergency service.
  There is, of course, another side to the argument in relation to calls to the emergency services. The fact that the location of telephone boxes can be passed quickly to the police acts as a very effective deterrent against hoax callers. The information is no less useful when it comes to mobile telephones. I am sure that we have all read about injured mountaineers who are rescued on the strength of the information which the telephone company is able to give regarding the location of their mobile phones.
  I realise that the concern expressed by noble Lords focuses more upon the way in which location data may be used as a surveillance tool rather than as an aid to emergency services. I also recognise that the use of location data should be properly regulated. The noble Viscount, Lord Goschen, made the point very well and it is a topic to which we shall return when we discuss amendments tabled by the noble Lord, Lord Lucas. I believe that I shall be able to offer some reassurance on that score.
  As I indicated in my opening remarks, we are considering the appropriate level of authorisation for types of communications data. The noble Lord, Lord McNally, is right to refer to the issue of proportionality and of getting the balance right, particularly in terms of investigations. That issue is already addressed in the non-statutory agreements between ACPO, Customs and the telecoms industry, and authorisation must be sought at the level of Assistant Chief Constable. That is what we intend to put in the code of practice and I believe that that is the appropriate level to which the matter should be referred.
  I hope that what I have said about the amendment is sufficient to show that location needs to be included in the definition. Perhaps I should remind your Lordships that this view was shared by those who drafted the European convention on cyber crime, on which the definition is in part based. Therefore, I trust that those reassurances and comments will help the noble Lord, Lord Cope, to withdraw his amendment. I believe that they should.
  Lord Cope of Berkeley: My Lords, in the light of the Minister's response, I beg leave to withdraw the amendment.
  Amendment No. 5, as an amendment to Amendment No. 4, by leave, withdrawn.
  On Question, Amendment No. 4 agreed to.
  Lord Bassam of Brighton Lord Bassam of Brighton moved Amendment No. 6:
  Page 5, line 17, leave out ("References in this section to") and insert ("In this section—

  (a) references, in relation to traffic data comprising signals for the actuation of apparatus, to a telecommunication system by means of which a communication is being or may be transmitted include references to any telecommunication system in which that apparatus is comprised; and

  (b) references to traffic").

  On Question, amendment agreed to.
  Lord Bassam of Brighton Lord Bassam of Brighton moved Amendment No. 7:
  Page 5. line 19, at end insert—
  ("and in this section "data", in relation to a postal item, means anything written on the outside of the item.
  (10A) The Secretary of State may by order modify the provisions of subsections (5), (9A) and (10).
  (10B) The Secretary of State shall not make an order under subsection (10A) unless a draft of the order has been laid before Parliament and approved by a resolution of each House.").
  The noble Lord said: My Lords, in moving Amendment No. 7, I wish to speak also to Amendment No. 32. Together, these amendments make the new definition capable of amendment by the Secretary of State, subject to the affirmative resolution procedure.
  Our difficulty here is that in order to define communications data with sufficient specificity to avoid including content of communications data, the definition has become rather more complicated than I suspect many of us would prefer. However, the more complicated a definition, the greater the chance of it being overtaken by technical developments. For that reason, we have sought to leave the Government some flexibility in order to ensure that if the definition becomes badly out of date it can be amended through a relatively simple procedure but still with the oversight provided by the affirmative resolution procedure.
  I wish to make two further points. First, I want to state for the record that the definition is intended to cover communications data and not the content of communications. Any amendment to the definition would be carried out only in that spirit. I believe that that needs to be understood. Secondly, none of us can predict how advances in technology might affect the definition—a point acknowledged, I believe, by the noble Lord, Lord Howell. It may move in such a way as to allow intrusion into privacy to occur in a manner that we cannot possibly envisage at present. In those circumstances, a power to amend the definition may be seen more favourably. I beg to move.
  Lord Cope of Berkeley Lord Cope of Berkeley moved, as an amendment to Amendment No. 7, Amendment No. 8:
  Line 4, leave out subsections (10A) and (10B).
  The noble Lord said: My Lords, it may be convenient to discuss Amendments Nos. 8 and 33 with Amendments Nos. 7 and 32. Although I had previously suggested that they might be degrouped, I believe that it would be helpful to discuss them together.
  There are two parts to Amendment No. 7 and its friend. The first part is, if I may say so, an extremely neat definition of "traffic data" in respect of mail and distinguishes it from "contents". It states quite simply,
  "'data', in relation to a postal item, means anything written on the outside of the item".
  So far as I can see, that is a perfect distinction to draw between "contents" and "traffic data". However, that part of Amendment No. 7 and its friend are entirely uncontroversial.
  More controversial is the power to which the Minister referred to modify those provisions. He explained that it was intended that the power should be used only in order to preserve intact, as it were, the exclusion of contents. I am paraphrasing, but not inaccurately, I hope.
  We would support subsequent modifications that became necessary to ensure the continued exclusion of content, but that is not how the power is written. Sometimes, powers are written to give a one-way ticket for the statutory instruments, not a two-way ticket. For example, in tax law it may be possible by order to alter a particular allowance or tax either upwards or downwards, but not necessarily in both ways. The amendment does not say that the Secretary of State may, by order, modify the provisions of the subsections to preserve content from inspection. It says only that he may modify the provisions—in any way. The order-making power could be used very widely to make it easier for the police and the other services to obtain much more data.
  That is an important potential distinction. At one end of the scale is material that can be obtained readily by the police. In the middle, higher permission is required, from the chief constable or the assistant chief constable. At the top of the scale, the Secretary of State's warrant is required. Only a statutory instrument stands between those very different powers. That is what led us to table the amendment. The question is whether the Minister's word that the power will be used in only one way and not the other is sufficient for your Lordships' House. I beg to move.
  5.30 p.m.
  Lord McNally: My Lords, the amendments have to be seen against the background of two facts. First, as the noble Lord, Lord Cope of Berkeley, has just said, the government amendment could swing both ways. It would not be so bad if we had overall confidence in the Government's instincts in these matters, but given the genuine public concern about the implications of the Bill, the House is right to pause and think whether the Secretary of State should have such powers in secondary legislation.
  Secondly, as the noble Lord, Lord Howell of Guildford, said, the problem with the Bill is that it is being enacted against a background of rapidly developing technology. We often see the phenomenon in broadcasting legislation, but it is perhaps even more evident in this case that the Government want as much flexibility as possible in secondary legislation, because they know darned well that the technological

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  background against which they are legislating will have changed dramatically within years, or maybe even months.
  There is a balance to be struck. How much do we trust the Minister's assurances—which I am sure are made in absolute good faith—about why the amendment is necessary? As the noble Lord, Lord Cope, has rightly pointed out, it does not just give flexibility to underpin the meaning of the present legislation; it leaves a loophole for the Secretary of State to broaden the remit. That is a matter of real concern and the Minister will need to be eloquent to convince the House.
  Lord Lucas: My Lords, as an aside, when I send an item by recorded delivery, the post office counter clerk peels off a sticker with a barcode on it and sticks it on the outside of the envelope. Is that barcode
  "written on the outside of the item"
  and do all the other records that the post office keeps that use that barcode to track the item and its final delivery count as communications data, which will be available under this section?
  Lord Bassam of Brighton: My Lords, as ever, the noble Lord, Lord Lucas, asks a puzzling riddle. I am not sure that I have the answer. I suppose that the answer must be yes, but I shall ponder on it.
  I am grateful to the noble Lords, Lord Cope and Lord McNally, for the way in which they have approached the amendments. The noble Lord, Lord Cope, has clearly understood our intent. I have made it clear that we do not intend the definition to cover the content of communications. That is the spirit in which we seek this extra flexibility. We are not conspiring to find a way of gaining access to further information about the detailed content of communications at some later date. I hope that I have expressed that sufficiently forcefully to offer some reassurance.
  I entirely understand the spirit in which the amendment to our amendment has been proposed. I am prepared to look again at our wording to try to add some further clarity about what we are after. I cannot give an absolute commitment to come back with something, but I appreciate the point that is being made. It should be crystal clear that we are not after the content of communications. However, we need the flexibility, because, as has been said many times, the rapid pace of technological change could create new difficulties in the future.
  I would prefer to persist with our amendment at this stage and I ask the noble Lord, Lord Cope, to withdraw the alternative version on the basis of my undertaking to have a closer look at the wording to see whether there is anything else that we can do to add an extra level of clarification. However, I cannot make an absolute promise.
  Lord Cope of Berkeley: My Lords, in the light of that generous offer from the Minister and the assurances
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  that he has given, I beg leave to withdraw the amendment, leaving open the possibility of returning to it at a later stage should that prove necessary.
  Amendment No. 8, as an amendment to Amendment No. 7, by leave, withdrawn.
  On Question, Amendment No. 7 agreed to.
  The Earl of Northesk The Earl of Northesk moved Amendment No. 9:
  Page 5, line 22, at end insert—
  ("( ) For the purposes of this section "general reception" shall have the same meaning as in section 1(7) of the Broadcasting Act 1996.").
  The noble Earl said: My Lords, the Minister will recall that we debated the issue at some length in Committee. Indeed, it gave rise to a host of questions about what is deemed to be included in the phrase "general reception". For example, as the Bill is currently drafted there is uncertainty about whether subscription broadcasting or encrypted broadcasting fall within the term. As my noble friend Lord Goschen asked in relation to a later amendment, should we infer that it includes an e-mail system based in interactive television and using television signals? My noble friend Lord Lucas put his finger on the issue by explaining how, on a strict analysis of how the technology operates, pager messages and mobile telephone traffic could well be deemed to fall within the definition.
  My major complaint is that the drafting is sloppy and unclear. I freely concede that the Minister offered the comfort that:
  "We do not agree that communications for reception by a closed network come within the provisions for general reception. We are clear that the term 'general' means available to all. However, it specifically excludes those on a closed network".—[Official Report. 12/6/00; col. 1422.]
  That is fair enough. I do not doubt for one moment that assertion but, to my mind, that is not what the Bill currently provides. In the absence of a generic definition on the face of the Bill, it remains open to interpretation.
  I acknowledge too that the Bill has been drafted with the aim of providing some element of future-proofing. I do not decry that. Because of the Bill's focus on the new technology, it is a worthy aspiration. But that should not be delivered via the expedient of legislative uncertainty; hence my amendment.
  I acknowledge that it has its imperfections. My researches to date have not yet unearthed a truly generic definition of the phrase in existing statute. However, the Minister helpfully advised the Committee that,
  "In Section 1(7)".
  of the Broadcasting Act 1996,
  "we are told that 'for general reception' means for general reception in, or in any area in, the United Kingdom … the phrase here has the same meaning".—[Official Report, 12/6/00; cols. 1421–2.]
  In other words, the amendment delivers no more and no more less than the Government's position on the issue, as espoused by the Minister. That being so, I could reasonably anticipate that the noble Lord might be well disposed towards it. I beg to move.
  Viscount Goschen: My Lords, in Committee, we had an interesting, if somewhat confused, discussion about this issue. During the course of that, we were unable to reach a definitive view on the meaning of "general reception" or "general broadcast".
  I welcome the initiative taken by my noble friend Lord Northesk. If the Minister does not like the definition which my noble friend proposes—I have no idea whether or not he does—it is incumbent on him to find something equally good, if not better.
  The fact is, as we have said, the world of electronic communications is changing so quickly that the question of whether something is for general broadcast or general reception can easily be argued both ways. We need more clarity on this issue.
  5.45 p.m.
  Lord Bassam of Brighton: My Lords, Amendment No. 9 seeks to clarify the phrase "general reception". In Committee, I relied on the Broadcasting Act 1996 definition which would mean,
  "general reception in, or in any area in, the United Kingdom".
  I also said in Committee that we believed this phrase to be used and well understood in legislation, and that no amendment was necessary. We have given the matter very careful consideration but our view remains the same.
  In response to the noble Earl's amendment, I should say first that it does not provide a definition of "broadcast for general reception". That is because the Broadcasting Act does not do so—and we do not believe that we should try to do so either.
  In our view, broadcasting for general reception implies that the transmission is intended to be received by anyone who wants to receive it. Whether to receive it is an individual's own choice. A person may, for example, choose not to buy a TV receiver or not to buy a digital decoder; but the transmission is there for him if he wants it.
  The question arises of whether pager messages and mobile telephone base station transmissions fall within this category. We believe that the answer is no. A paging message has to be addressed to a particular number or group of numbers and is received only by a person or group of persons whose pager is programmed with that address number. Other people, even though on the same pager system, will not receive the message unless it is addressed to their pager number also. The same is true for mobile phones: many people call on the same system, but a call will be received only by a phone with a number to which the message is addressed.
  Finally, I should confess that I referred in error to Section 1(7) of the Broadcasting Act 1996 when I responded to the noble Earl's amendment in
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  Committee. Although the definition of "general reception" was indeed originally contained in that subsection, the same definition is now to be found in Section 1(1A). I hope that I have made the position plain and, on that basis, I hope that the noble Earl will feel able to withdraw his amendment.
  The Earl of Northesk: My Lords, I thank the Minister for that reply. I remain uncomfortable about the issue but, at this time, I fear that I may have to resign myself to living with the uncertainty for a little longer. I may try to return at Third Reading with a definition of "general reception" which would satisfy both of us.
  Lord Bassam of Brighton: My Lords, if, before Third Reading, the noble Earl wants to share his thinking on that, we shall be more than happy to explore any further views he has on the subject.
  The Earl of Northesk: My Lords, I thank the Minister for that suggestion and I hope that I shall be able to take it up. In the mean time, I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Clause 4 [Power to provide jiff lawful interception]:
  Lord Bassam of Brighton Lord Bassam of Brighton moved Amendment No. 10:
  Page 7, line 6, at end insert—
  ("( ) Conduct taking place in a state hospital is authorised by this section if it is conduct in pursuance of, and in accordance with, any direction given to the State Hospitals Board for Scotland under section 2(5) of the National Health Service (Scotland) Act 1978 (regulations and directions as to the exercise of their functions by health boards) as applied by Article 5(1) o and the Schedule to The State Hospitals Board for Scotland Order 1995 (which applies certain provisions of that Act of 1978 to the State Hospitals Board).").
  The noble Lord said: My Lords, in moving this amendment, I shall speak also to Amendments Nos. 11 and 12. These amendments are minor amendments to take account of different terminology used in Scotland and Northern Ireland. We are not adding or making policy changes. We are merely ensuring that the same regime of lawful interception can be practised in both those countries, as, indeed, will be allowed in England and Wales.
  Amendments Nos. 10 and 11 relate to hospitals in Scotland. The current Clause 4 referring to high security hospitals would not have authorised similar conduct within the state hospital at Carstairs in Scotland. The state hospital is the Scottish equivalent to our high security hospitals. We have discussed this matter with the Scottish Executive and the amendments that we have tabled will ensure that an equivalent regime can operate.
  Similarly, Amendment No. 12 adds the term "young offenders centre" in subsection (8)(a) to ensure that the equivalent institution in Northern Ireland is able to operate in exactly the same way as prisons, young offender institutions or remand centres in the rest of the United Kingdom. I beg to move.
  Lord Cope of Berkeley: My Lords, I am sure that all Members of your Lordships' House with Scottish links

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  will be very glad that the Government have at last recognised the differences and have included them in this.
  On Question, amendment agreed to.
  Lord Bassam of Brighton Lord Bassam of Brighton moved Amendments Nos. 11 and 12:
  Page 7, line 17, at end insert ("; and
  "state hospital" has the same meaning as in the National Health Service (Scotland) Act 1978.").
  Page 7, line 19, after ("institution") insert (", young offenders centre").
  On Question, amendments agreed to.
  Clause 12 [Maintenance of interception capability]:
  Lord Bassam of Brighton Lord Bassam of Brighton moved Amendment No. 13:
  Page 14, line 23. at end insert—
  ("( ) A person shall not be liable to have an obligation imposed on him in accordance with an order under this section by reason only that he provides, or is proposing to provide, to members of the public a telecommunications service the provision of which is or, as the case may be, will be no more than—

  (a)the means by which he provides a service which is not a telecommunications service; or

  (b)necessarily incidental to the provision by him of a service which is not a telecommunications service.").

  The noble Lord said: My Lords, the Government have sought at every opportunity to emphasise that interception is a method of last resort, and is used sparingly. The purpose of Amendment No. 13 is to clarify that commercial and other organisations which provide a telecommunications service as a means of accessing a further service of theirs will not be subject to any order under Clause 12.
  I give an example to explain what that means in practice. A bank may decide that it will offer a telecommunications service to its customers, as a means of providing access to its banking service. As a result, customers are able to communicate with that bank, perhaps by e-mail, and make transactions or check the balance of their account. Where such a service is provided, the effect of the amendment is to exclude its provider from any obligations imposed under Clause 12 to develop or maintain an interception capability.
  The amendment also puts outside the scope of Clause 12 a telecommunications service that is necessarily incidental to a different service. There may be businesses now, or in the future, which offer a telecommunications service only as part of a wider, non-telecommunications operation. The telecommunications aspect might be an integral part of the business; but only as a necessary off-shoot of the non-communications business. Clause 12 will not cover such a service.
  With regard to the specifics of what the order made under Clause 12 will contain, my honourable friend Mr Clarke explained in another place that there was a three-stage process towards reasonable intercept capability. The Bill is the first stage. It sets out the principle that some service providers should maintain
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  an intercept capability. This is an established principle that has been long adhered to by public telecommunications operators.
  The second phase will be an order laid before Parliament for the establishment of a reasonable capability. That order can be made only after consultation with those likely to be affected and must be approved by each House. It will set out what kind of businesses are proposed to be covered. The order cannot go beyond the meaning of "public telecommunications services" in the Bill. In particular, it can apply only to telecommunications services that are
  "offered or provided to a substantial section of the public".
  And it will oblige the Secretary of State to come to Parliament and to justify the interpretation that he places on those words. Within the class of businesses that could be covered in theory, the order will reveal exactly which parts of the communications sector are to be covered.
  The third phase will be the serving of individual notices on communication service providers. Those will state the capability that they are expected to provide and the time-scale for provision. The individual notices will result from a dialogue between the Government and the service providers themselves. The notice will take account of the circumstances of each provider and will be consistent with the order passed by Parliament.
  I hope that this amendment will be welcomed by all sides of the House. I beg to move.
  Lord Lucas: My Lords, I am happy to see this amendment. It removes the question as to whether ATM networks and other such matters would be liable under the Bill. Perhaps the Minister, now or later, can satisfy my curiosity as to which side of the line JANET falls.
  Lord Bassam of Brighton: My Lords, I shall have to satisfy the curiosity expressed by the noble Lord later!
  On Question, amendment agreed to.
  Lord Cope of Berkeley Lord Cope of Berkeley moved Amendment No. 14:
  Page 14, line 23. at end insert—
  ("( ) The person to whom a notice is given may refer the notice to the Technical Advisory Board to consider the technical requirements and the financial consequences and the Board shall report their conclusions on those matters to that person and to the Secretary of State.").
  The noble Lord said: My Lords, in speaking to Amendment No. 14, in my name and that of the noble Lord, Lord McNally, I shall also speak to Amendments Nos. 15 and 17. To some extent we discussed this matter in Committee, but I have no hesitation in returning to it.
  We propose that there should be a technical advisory board and that the board should consist of six representatives, chosen by the Secretary of State, of the kind of companies affected by this legislation such as Internet service providers and others, and importantly some of their customers, banks and so on. There

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  should also be six representatives of what one may describe as the users of interception: the police, Customs and Excise, the security service and others. It is intended that the board should be balanced.
  In Committee we suggested that the interception commissioner should be a member and should chair the board. We have not retabled that proposal, but equally we have not necessarily abandoned it. Speaking for myself, I am not desperately concerned about the details of the board. The figure of six may be varied—certainly upwards—although I do not believe that it should be too large. Who should chair the board is also a matter for consideration. What is important is the principle.
  We have in mind two jobs for the technical advisory board. The first is to consider the technical aspects and feasibility of orders put by the Secretary of State, under Clause 12, on the basis of which black boxes will be inserted in Internet service providers and others. That is a highly technical matter. The Government commissioned the Smith report from external consultants in order to look into the matter and to open it up. Within the industry that report has been quite widely criticised, but the great value of it to all of us who have taken an interest in such matters, is that it has exposed this difficult and continuing problem. One thing that we can be certain about is that technology will develop at a rapid rate in the future.
  It is not just a matter of the Secretary of State laying down an order and a whole series of black boxes springing up in the appropriate parts of the economy; on the contrary, I believe that successive Secretaries of State will find themselves having to propose to Parliament further orders as time goes on. I believe that it would be in the interests of all if a small group, such as the technical advisory board that we propose, should have the statutory duty, as suggested in our amendment, to consider this matter on a continuing basis. As a result I believe that a much greater understanding would grow up between those in the electronic communications industry and the users that I have described—the police and other authorities. Each would have a much greater understanding of what should be achieved and the best ways in which to do that.
  The second job of the board would be to consider what may be called appeals from individual Internet service providers or others who are required by a notice following a statutory instrument to install a black box within their set-up. The amendment that we tabled in Committee suggested that all such notices should be vetted by a technical advisory board—or as we then called it, a technical approvals board—and that all such notices should be approved. It was said to us, particularly by BT, that people would not want such a notice to be seen by others in the industry. That is understandable and, in due course, that view may be shared by others. As a result we have made it an appeals procedure so that the ISP can, if it wants, ask the technical advisory board to look at its notice to see whether it is technically feasible and sensible to do it in a particular way.
  Internet service providers and others who will be affected by this point differ greatly in their size, their technical capacity, and so on, and in future they will differ even more. As a result, every notice will be quite different.
  In Committee, the Minister's view seemed to be that no one in the industry was supportive of this idea. If that was his view, I hope he has been thoroughly disabused of it now. The Internet Service Providers Association and Linx, the London Internet Exchange, have confirmed to me that they are in favour of a technical advisory board, along the lines suggested in the amendment, as have the CBI, the Federation of the Electronics Industries and others who have considered the matter. They all favour it because of the potential complexity and obtrusiveness of the black boxes as a method of looking at e-mails and other traffic. It is sad to say, but the Government have succeeded with this Bill, and particularly with this black box proposal, in frightening a large section, not only of the electronics industry, but also of the whole of the economy, including banks and others involved in international business.
  From the start we have all accepted, as do those who comment from outside, that it is valuable and important for the police and others to be able to tap telephones and now to tap e-mails to capture criminals, terrorists, paedophiles and others. But it is a question of balance and a question of how far we go with the regulatory framework. I am sure the Minister will recognise the phrase,
  "If our regulatory framework is excessive or poorly conceived, we all suffer from the resultant red tape".
  That comes from the Prime Minister's foreword to the White Paper on regulation and regulatory impact. The Prime Minister went on,
  "I have therefore decided that no regulatory proposal which has an impact on business, charities and voluntary bodies should be considered by the Government without a thorough assessment of the risks, costs and benefits, a clear analysis of who will be affected",
  and so forth. He made clear that that applied to both primary and secondary legislation.
  I realise that a sort of impact assessment was done in the case of this Bill. But it has been hugely criticised and was certainly not discussed in the way intended as far as I can gather from the White Paper. So this remains an extremely important matter for the whole future of e-commerce in this country. If we do not succeed in reassuring electronic business in this country—and that is every business these days—e-commerce will not have a future in this country, certainly not the future the Prime Minister and others in the Government envisage for it.
  We all want our country to be in the forefront of e-commerce. This proposal is perceived as threatening that. The Minister may say it is only a perception. But it is the way in which the Bill is drawn and the lack of reassurance in it that gave rise to that perception. And that perception continues to grow the more we discuss the Bill. In the end, it is perception that matters. It is the perception of these

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  things that decides whether or not companies invest here and whether or not companies here expand their e-commerce business.
  We have all read—I am sure the Minister has—of companies even in the past day or two saying that, if this Bill is not amended, they will move the centre of gravity of their operations overseas. Those are serious companies and I believe that there are others who hold the same view who have not gone public. It is those perceptions we must change. One of the important amendments which would help to change that perception is the introduction of the technical advisory board on the lines set out in Amendment No. 14. I beg to move.
  6 p.m.
  Lord McNally: My Lords, the noble Lord, Lord Cope, eloquently and pertinently explained the reasons for this amendment. I can think of no better way of changing the external perception of the Government's attitude to this Bill than if the Minister were to stand up and accept this amendment. It is over 50 years since the late Douglas Jay suggested that the man in Whitehall knows best. If ever there was a Bill that proved that the men and women in Whitehall may not know best, it is this one. There is no doubt that if the Government had got closer to industry and used the great expertise that is out there earlier, this Bill would have been in a better shape earlier.
  What strikes me about Amendment No. 14—I confirm the assertion of the noble Lord, Lord Cope, that industry wants such a statutory body—is that it gives the Government the opportunity of repairing earlier omissions. Instead of wasting money on external consultants, they have the opportunity of obtaining the advice of industry experts.
  Like so many, I started out with a vague idea of what was being proposed. But when it became clear that the Government had almost a blank cheque for the technical impositions that they could place on service providers, that seemed to me to be extremely unfair and reckless. It was a question of one side thinking up requirements and the other side having to pay for it and work out how to implement it. That is not the way to obtain technical co-operation. However, the proposal for a technical advisory board offers the Government two great prizes. First, it offers industry expertise in ensuring that effective measures are introduced. Secondly, it wins industry confidence. I should have thought they were two worthwhile prizes for the Government to seize now.
  Viscount Goschen: My Lords, I endorse the comments of the noble Lord, Lord McNally, and my noble friend Lord Cope. The stakes are extraordinarily high at this point in the development of the e-commerce industry, an industry in which the United Kingdom takes a strong leading role.
  The Minister has asserted on a number of occasions that he feels that the United Kingdom is taking a view towards e-commerce security which will be followed
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  by other countries. I am not entirely sure that that is true. Indeed, I would be surprised to see wide international agreement surrounding the approach that the United Kingdom has taken. But we on these Benches have always said that the more international agreement we have, the better. However, if the Government are determined to push ahead with this Bill on their own, there is a danger, as the Minister will be tired of hearing, that this business could evaporate. It is extremely mobile internationally. The Minister simply does not have the power to control. If he puts excessive regulation on the business in this country, it will move overseas. We have already seen those indications.
  Amendment No. 14—it is difficult to argue that it is unreasonable—adds a layer of comfort to the Bill. At least with the technical advisory board there will be an avenue of appeal; there will be an area to which ISPs can go and discuss the technical obligations being imposed on them by government. As the noble Lord, Lord McNally, said, it is clear that industry knows a huge amount about its business, unlike the Government. The Government, by definition, cannot move as fast as the e-commerce industry. I believe it will be of great assistance to the departments and agencies for which the Minister is responsible to have that level of input.
  If companies do not wish to use the board; if they prefer to have private discussions with the agency looking to impose this burden, then so be it. But at least they have an alternative avenue.
  Clearly the fact that my noble friend includes "financial consequences" in the amendment is extremely important. When we come on to later amendments to Clause 13 we will discuss the financial burdens—they may be very high—which may be imposed by the Bill. We look forward to the Minister giving us more clarity about the Government's approach towards co-operating with industry. There is little for the Government to lose. They may say it is another layer of bureaucracy. That is true. But if the Government are determined to drive ahead on their own, they need this safeguard. If they do not accept this safeguard, there could be substantial losses to our economic well-being.
  Lord Desai: My Lords, I wish to speak briefly on Amendment No. 17. But before I do so perhaps I can say something on Amendment No. 14.
  In moving the amendment the noble Lord, Lord Cope, said that BT was worried about these notices being public rather than being used individually. I understand that there are issues of commercial confidentiality, but that will have a bearing on how the proposed technical advisory board operates. If the users are to fall under paragraph (a) of Amendment No. 17, some of them may be competing ISPs. Such matters will have to be taken into consideration when the composition of the board is decided.
  As I said in Committee, among those defined as persons affected by Clause 12 I hope to see mention of ordinary citizens, not just ISPs. It is bad enough to

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  have all the users of interception as regards paragraph (b) of Amendment No. 17, but if they got into cahoots with all the ISPs I would be even more frightened. That would just be a ganging up on ordinary consumers and citizens. Whatever happens to the amendment and whatever shape the technical advisory board takes, I hope that it will look after the interests of ordinary citizens because they should be protected.
  Lord Howell of Guildford: My Lords, the noble Lord, Lord Desai, has made a very pertinent point upon which I hope that the Minister will be able to reassure us. I strongly support the comments made by my noble friends Lord Cope and Lord Goschen about the need for a board of this kind. It would give some reassurance as regards meeting the problems raised by the legislation.
  I apologise for not taking part in the Committee stage; indeed, I regret it. However, the Report stage will allow me to express fears that I suspect are increasingly widely shared, as the general public become aware of what is proposed and how the whole slant of the Bill, which I recognise has been accepted by parties on both sides of the House and in the other place, is really in favour of a bureaucratic hierarchical order of the kind that is actually being swept away by technology. We are moving into a network world in which this kind of attempt by such central authorities will, in five years' time, look as absurd as did the attempts of the old authoritarian governments of the 1960s and 1970s who tried to keep a grip on their societies in eastern and central Europe. In the end, they were swept away not only by politics but also by technology. I believe that technology will carry this whole process along far faster than government officials or bureaucrats recognise.
  It is perfectly obvious that this is a global phenomenon. The e-mails that everyone is involved in sending and in dealing with, the operations of the ISPs and of the Internet portal and vortal providers, and so on, are done on a global basis. Every day millions and millions of e-mails travel across the Atlantic and into other parts of continental Europe, as well as into Asia. Who will advise on the interface, the link-up and the logic of a link-up between what this Bill attempts to do and what is going on elsewhere in the world? It is not merely a question of finding that if we do not have the proper interface we shall fall behind as an island. In fact, this technology does not take any notice of borders, nations, islands or national boundaries.
  If we attempt to provide the kind of control and authoritarian intervention which is hinted at by the Bill and we are not in line with what is going on in the United States, in the rest of Asia or, indeed with what our continental partners are doing, we shall look a crowd of fools. Indeed, we shall look absurd. We shall find our efforts both ineffective and damaging. Therefore, it seems to me essential that such a board should at all times examine very closely what is going on in the rest of the global system of which we are just a part. We are just an individual element—a cluster, if you like—in the network system, which is the global Internet web. Unless we have a body of this kind
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  keeping its eye on such matters, we shall be in grave danger of passing legislation that is not only damaging locally but also highly ineffective. Indeed, it may interfere with the general advance of the global information system, which, if properly understood and harnessed—although it has its dangers—could be of great benefit to all mankind.
  6.15 p.m.
  Lord Stevenson of Coddenham: My Lords, I had not intended to speak during the Report stage and must apologise to the House for doing so because I did not speak in Committee. That can be put down partly to inexperience as I am very new in this place and partly, quite frankly, because I had not understood some of the implications of this Bill as regards some of my activities. I must declare an interest at this point in that I chair two of our top 20 companies, both of which are huge investors in Internet-driven companies, spending about £2 billion this year. I personally invest in a number of rather smaller companies.
  However, those companies all have in common—this is most important—the fact that they will ultimately be paying for this regulation. I suspect that the Minister has been lobbied by the people immediately affected. I have to admit that large companies like the ones I run have not really understood the implications involved. Despite all the publicity, I believe that that is an important point that Her Majesty's Government should take on board.
  I should make it plain that I am hugely supportive of the purpose of the Bill. I believe that the UK is an extremely good place in which to do e-commerce. With the odd exception, I think that this Government have been pretty darned good at maximising and optimising that development. However, I have a real worry that a miscalculation on costs could lead to accidents that we would really regret. Since I became all worked up about this, I have read very widely. I have read the debates that took place on the subject both here and in another place. I have also read as many of the lobbying documents as I could find. It seems to me that there is complete disagreement about the cost implications of the legislation. It is my judgment that no one knows what the cost to the economy will be. I strongly support the view expressed by the noble Lord, Lord Cope, that, in any event, it will be different this time next year: the technology will have changed and goodness knows what it will be like!
  Having declared my interest, I should like to share with noble Lords how this legislation will affect my businesses. It is possible that it will be all right and that the Home Office, with the help of the Government—I am not being at all sarcastic—has got the costs in perspective; in other words, there will be a marginal addition to the cost of doing business, and that is fine. However, some people may not feel confident about that. It is not a case of either of the businesses that I run suddenly saying, "Hey, unless this changes, we will be leaving the country and going to America". It will not be like that.

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  One of my businesses is a very large international business and the market leader in its field world-wide. A majority of its profits and activities lie outside the UK, but the UK gets a huge benefit from its British domicile. But if we have a relative cost disadvantage in this country, the business will melt away into other countries. Indeed, not even the chairman will know about it. It will happen in the process of doing business and the Government will not have the luxury of any warning.
  My other business is a largely UK business in the financial services industry. It is a business that is poised to internationalise. The situation there would be rather more abrupt and spectacular if the people working for me suddenly realised in six months' time that there would be huge cost implications as a result of this legislation. There would be more formal moves outside the UK because we are already discussing with partners in different countries how we operate. At present, the UK will get the benefit of that; but if we are loaded with cost, the chances are that we shall relocate certain activities abroad.
  I have to be honest and say that I do not know whether the proposed technical advisory board is the right way to deal with this issue. Although it would add another level of bureaucracy, I must say that it sounds rather sensible. However, unless the Minister and the Government are really confident, on advice, that they have the costs in perspective, I urge them, please, to find a way to ensure that, when they are gone and other people are gone, there is flexibility to control the situation. Indeed, they should do that if they have a scintilla of doubt that there could be huge costs involved. The suggested technical advisory board could be one way of achieving that aim.
  Lord Phillips of Sudbury: My Lords, I should like briefly to refer to a point already mentioned by the noble Lord, Lord Desai, in relation to the amendment so tellingly moved by the noble Lord, Lord Cope of Berkeley. Indeed, the noble Lord, Lord Cope, was open and "liberal" enough—dare I say it?—to say that the precise composition of the technical advisory board is not written in stone in his mind.
  Although there is talk in the amendment of there being six members on the board appointed from the providers of technical services and six from the agencies which will use the powers under the Bill, there should be representation from the consumers of these services, not just the voluntary sector consumers but consumers generally. I congratulate the noble Lord, Lord Stevenson, on one of his earliest interjections. Amendments Nos. 18, 19 and 20 will deal more directly with the important points that he raised.
  Lord St John of Bletso: My Lords, like my noble friend Lord Stevenson I did not get involved in the Committee stage. I declare an interest as managing director of one of the larger ISPs in the UK and a
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  NASDAQ quoted company. In Committee the Minister mentioned that industry had been fully consulted on the implications of the Bill. I beg to differ. I have spoken to a number of colleagues who run similar large ISPs who are horrified at the potential consequences of the Bill. I totally agree with the noble Lord, Lord McNally, that it is essential that the Government gain the confidence of industry with regard to the Bill.
  Amendment No. 14 is concerned with technical requirements. My noble friend Lord Stevenson mentioned financial consequences. I mention also legal consequences. Every ISP has to provide clients with service level agreements. The installation of a "black box" has severe implications from a security angle which would affect the guarantees in service level agreements. I do not resist the Bill, but I totally support and endorse the amendment which would help to win the confidence of industry.
  Lord Blackwell: My Lords, I too urge the Government to accept the amendments that we are discussing. Rather than repeat the arguments that have already been made this evening and in Committee, I ask the Government to explain how they would envisage the measure working if the committee of experts is not in place. Given the pace of change of technology that a number of speakers mentioned in Committee, it seems to me inevitable that disputes will occur if the Minister simply imposes obligations on persons,
  "as it appears to him reasonable".
  On occasion companies will dispute that those obligations are reasonable. They will say that the obligations are technically impossible and that they cannot be delivered in the way that is envisaged. I believe that some mechanism will have to be put in place to resolve such disputes. Therefore, is it not far better for the Government to accept such a mechanism and a committee of experts in the first place?
  The Earl of Erroll: My Lords, I have entered the discussion rather late and I am starting to realise the horrors that might be involved. As access to the Internet speeds up at an extremely rapid pace, if the black boxes do not keep up with that and cannot monitor the traffic fast enough, presumably the Government will either have to give up the idea, persuade people to spend a fortune on developing them, or not monitor the traffic.
  I may be able to develop a way round the black boxes. My main e-mail currently resides on a server probably based in Seattle as an American service provider provides my mail box. I assume that my communication goes straight across the Atlantic and is downloaded over there. That provider will not have a black box. If I get a cheap link from one of the telecoms providers to take me across the Atlantic for 3p a minute, presumably I can get round the black box by

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  linking into an American ISP over the telephone line. I would love to know whether that is possible as it would solve a lot of problems.
  Lord Bassam of Brighton: My Lords, some matters are beyond me and that is probably one of them.
  Viscount Goschen: My Lords, with the leave of the House, I make the following point. I am well aware that we are on Report. The noble Lord cannot just dismiss the point made by the noble Earl. That matter is absolutely key; namely, that Internet traffic can be routed via overseas ISPs to evade cost, as well as regulatory and technical burdens. The noble Lord must address that issue.
  Lord Bassam of Brighton: My Lords, I shall endeavour to do that. However, at this stage I wish to focus on the issues that have been raised in the debate and on some of the underlying issues. I believe that the noble Viscount, Lord Goschen, invited me to set out the Government's broader thinking, not least on issues of cost. I wish to discuss that before I turn to the amendments relating to the possible creation of a technical advisory board.
  In Committee, I was pressed to make a more general statement about the Government's intentions with regard to the implementation of Clauses 12 and 13. It is right that I should respond to that matter now. Our response is not to alter the legislation significantly. We do not believe that that would be appropriate in this case. However, we can and do intend to give a greater indication of our strategy in approaching the allocation of costs and the implementation of an intercept capability. I wish to tell the House what we have in mind.
  I start with Clauses 12 and 13 as currently drafted. The matter of the allocation of costs is dealt with in a Clause 12 order. I need to correct something for the record. The order itself will not deal with costs. However, the Secretary of State, in presenting the order to Parliament, will in practice have to explain the position on costs. This is partly because Parliament will expect that and partly because the Secretary of State will have to show that he has discharged his duty under Clause 13(3).
  As many have pointed out, Clauses 12 and 13 necessarily contain a great deal of flexibility. That is important in order to ensure that the provisions can apply to a range of technologies and over a number of years. For both those reasons—that technology is changing and that we wish this legislation to have a certain longevity—we need to retain flexible arrangements. Noble Lords will note that Clause 13 requires the Secretary of State to pay marginal costs. We have defined what we mean by this at various stages. On the question of other costs, Clause 13 allows a Secretary of State to pay all or none of the costs involved. We regard that flexibility as essential but it has none the less drawn some criticism. It is the uncertainty that that creates which I now seek to address.
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  I start with a resume of the current position in terms of an intercept requirement. We have set this out elsewhere. The communication service providers meet the cost of developing and maintaining the reasonable capability, identifying the relevant communication and delivering it to an agreed handover point within their network. The Government are responsible for meeting the cost of invoking an interception, transmission of the product from the handover point and any additional assistance beyond the reasonable capability.
  That is the current situation. However, the Government appreciate that the emergence of new technologies—significantly Internet protocol—brings new considerations to bear. In addressing these new considerations, the Government must also bear in mind the need to ensure equity across the entire industry in the new arrangements.
  The Government have estimated that costs to communication service providers not presently covered, but who will be covered under the Bill, will not exceed £20 million over three years. As is well known, that estimate was published in the regulatory impact assessment when the Bill was introduced in the other place in February.
  None of the research since that time has caused us to alter this view. We stand by that estimate. We are aware that alternative estimates exist—the noble Lord, Lord Stevenson, made the point very capably that estimates have varied greatly—but we have not yet seen a reason to move from the £20 million estimate. Having said that, we do not claim a monopoly of wisdom on these complicated and difficult issues—we cannot—and we intend to ratchet up the level of our discussions with industry contacts to reflect that point. But we must go with the best estimate that we can make at this stage.
  We have given careful thought to the way to approach the requirement under Clause 12. It should be noted that Clause 12 requires the Government to return to Parliament with an order before Clause 12 can be implemented. This order would contain more details of the capability to be required and it would be accompanied by more indications on the allocation of costs. The time at which that order is brought before Parliament will depend upon the progress that the Government can make with industry on technical considerations. In advance of the appearance of that order, and to aid today's debate, I shall now outline our strategy.
  We start from the current position, which I outlined earlier, and I can move on to say that the Government will set aside an amount of money over three years, from April 2001 to 2004, to ease the introduction of the additional burden. We will set aside £20 million far that purpose.
  I should outline the approach that the Government will take on allocating the money. First, the Government expect to fund most of the development of the capability for the interception of traffic transmitted as Internet protocol and for the building of any necessary equipment. Some people have

  281
  estimated developmental costs at around £½ million; others have estimated that the costs will be higher. We shall work with industry colleagues on this development and, depending upon the extent to which the technology is genuinely different for interception or to which the technology is similar to that which the industry might itself need—for example, for record keeping or for audit purposes—the Government will pay either for the development of the capability or make a contribution. Part of the money we have set aside will be for this purpose and it will be the first draw on that money.
  The rest of the money would, exceptionally, be available to service providers who require help with the installation of a new intercept capability due to new technology. Primarily, we are thinking here of the integration of the Internet protocol interception capability. My first point is that most service providers will not be approached with a requirement to install a capability. There may be some planning and consideration costs for smaller companies, but we genuinely do not think that these will be significant for larger companies. Where installation requirements are significant in terms of the size of the company, the Government will make a contribution. We have said many times that we expect these companies to be small in number. That view continues to be the case. Once installed, the CSPs will be responsible for ensuring that the Internet protocol interception capability is updated to intercept new services they offer and changes within their network.
  I should at this stage divert to answer a couple of frequently asked questions. Some people assert that, as the coverage will not be universal, all that criminals will need to do is use a service provider that does not contain this capability. Others say that as the requirement will not be universal it will necessarily create inequities in the communications market. We reject both of those assertions.
  As to the first assertion—that criminals will simply use service providers that do not maintain a capability—we do not expect that criminals will know which service providers maintain a capability. A more significant point is that criminals have, one presumes, known for some time that it is possible to intercept telephones—but this does not stop them using telephones. It is also the case that, while all public telecommunications operators may be required to maintain a capability, only a small number are called upon to do so in practice—yet we have shared with this House many times the significant results from interception at present—£185 million-worth of drugs was seized in this way in 1998. Current successes are ones that the UK as a whole simply cannot afford to lose.
  As to the second point, that this will create inequities in the market, we reject this too. This will not be the case. The same criteria will be applied to all service providers regardless of the situation. The criteria will be; is this a new requirement on the service provider; how significant is the cost in terms of the overall size and turnover of the company?
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  In practice, we do not expect to approach the smallest companies in this way. However, the smaller the company, the greater proportion of its costs the Government will meet, up to and including the entire cost of installation. None the less, if considerations are appropriate, we believe that it may be possible to reimburse some of the larger companies for some of the costs of installing a capability to intercept traffic carried over Internet protocols.
  I should highlight one point: this money is all intended to be focused on the costs of developing, building and, in some cases, integrating the equipment for Internet protocol interception rather than on maintaining the capability. It would all be for the costs over the three years starting from next April. Once installed, and if the capability continued to be required, we would expect service providers to maintain and upgrade equipment; and, indeed, we would expect service providers to continue to maintain and upgrade equipment which already exists. I hope that that is an indication of how the Government expect to spend the money. We would approach the task by working with industry, with the intention of allocating the money only in respect of new requirements due to new technologies and loaded towards the smaller companies, although not exclusively for their benefit.
  Parliament can expect more detail on these issues to be set out in the order which must precede any requirement under Clause 12 of the Bill. The money will cover the period 2001 to 2004. We do not think that it is possible at this stage to give an indication of our intentions beyond 2004. Further technological considerations may well by then have affected the equation, a point made very ably by a number of noble Lords. But we undertake to monitor the experience of the system we will put in place and to review and consider the cost issues—and to return to Parliament if necessary—at the end of that three-year period.
  We believe that our practice continues to be consistent with international practice, and this is something that particularly we will keep an eye on over the next three-year period. For example, under the Telecommunications Act 1998 in Holland, Internet service providers are required, we understand, to pay the costs of providing the IP stream. This may prove more onerous than our regime in some circumstances.
  Secondly, we also believe that there are benefits for industry from the use of interception. This is partly because of the potential and social costs of the drugs menace. It has been estimated, for example, that 50 to 70 per cent of the estimated £1.5 billion a year spent on drugs is raised through acquisitive crime. Perhaps more directly, industry may well appreciate the savings in national security terms gleaned from interception. Significant terrorist bombings have caused huge and extensive damage to business, not least in the City. Interception is one of the key weapons in the armoury available to prevent such bombings happening again. Evidently there is a business interest as well as a wider society interest in ensuring sufficient interception capability.

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  Finally, our third argument is that to expect industry to pay at least a contribution towards these costs is a decision based on pure economics. Both government and industry should have an interest in minimising the costs involved. We do not believe this efficiency will best be achieved if industry has no financial stake in the matter.
  We accept that considerations of the new technologies, the diversification of communication service providers and the emergence of small companies bring new considerations with them. We do not expect that we will approach the smallest and newest companies with a requirement to install a capability. But we shall approach some companies and focus on the nature of the technology that they are operating and on the overall impact on their business plan that the expenditure will have before allocating an appropriate contribution—more details of which we expect to be available to accompany the draft order to be brought before Parliament.
  I hope that I have outlined our strategy with sufficient clarity. We shall make some money available; we expect it to cover the vast majority, if not all, of the costs incurred in the three-year period from 2001 when focusing on those companies which are installing an interception capability over IP and for which this expenditure would be significant. With the reassurance that these matters must return to Parliament in secondary legislation before they take effect, I ask that noble Lords will accept this indication of our strategy as sufficient reassurance as to our intentions in respect of the use of Clauses 12 and 13.
  I turn to the amendments on the technical advisory board. I am conscious that I have taken some time in making my earlier statement. I trust that noble Lords will continue to bear with me as I respond to the important points that have been made. It is fair to say that there is probably not a great deal of difference between the position of the mover of the amendment and that of the Government. The difference is probably more the means of achieving what is sought.
  The issue of a technical advisory or approvals board has been discussed at great length at all stages of the passage of the Bill through both Houses of Parliament. What has come through clearly, and I think very clearly in this debate, is how all sides agree on the importance of there being close dialogue between government and the industry on reaching agreement on what will constitute a reasonable intercept capability. Certainly, we have always stressed our commitment to that dialogue and we have all along maintained that it would make no sense to forge ahead without having industry alongside in tandem. I can see no virtue in that. We know that from our long experience of close co-operation with the public telecommunications operators which, most would agree, has worked very well over many years.
  I should like to assure noble Lords that the Government's expressed scepticism about the necessity of setting up such an advisory board on a statutory basis is not due to inertia or any form of "bloody-mindedness" on our part. Indeed, we have
  284
  given the matter very serious consideration since it was first proposed. Our most important consideration has always been that the industry itself expressed initial scepticism. Much of the advice we received from industry was that, if there was to be a body at all, it would favour a non-statutory advisory group, much along the lines of the arrangements which we already have in place with telecommunications operators. I can confidently say that industry has not been of one mind—this point has been acknowledged in the debate—on the proposal to set up a statutory body. Indeed, it still does not speak with one voice on the matter. I think that is a fact.
  British Telecom has informed us that it sees no good reason to change the existing arrangements, which have always worked perfectly well. That was its comment. The communications company, NTL, has also expressed to us its hostility to any changes to the current practice such as the noble Lord proposes in his amendment. Cable & Wireless has informed my officials of its view that the current structure works well and that it can see no benefit to be gained from making the changes suggested here. Only this morning, my—
  Lord Phillips of Sudbury: My Lords, might it riot be the case that these huge players have all the access they currently require for bending the ear of government?
  6.45 p.m.
  Lord Bassam of Brighton: No, my Lords, that is not the point. The point they are making is that the arrangements which they currently operate work perfectly well. The arrangements are perfectly acceptable to them. If noble Lords will hear with me, I shall continue and perhaps offer some further understanding of our position. My officials learned from Vodafone today that it is generally happy, as were the others, with the current arrangements and can see little advantage in instituting a statutory body. That is not to say that a voluntary set of arrangements would not be acceptable to all four of those major players.
  It is because of this lack of agreement within the communications service provider industry that, as a sensible compromise, we expressed our willingness to consider involving some kind of existing non-statutory group as an appropriate substitute for what is being proposed. That is in addition to all the procedures we have set out in the Bill to consult with industry and Parliament at each and every step.
  I trust that the House will permit me a few moments to remind noble Lords what these steps are. First, we stated on the face of the Bill that any requirements placed upon industry should be properly considered and reasonable. Secondly, we set out in the Bill clear consultative steps that needed to be taken before any notice was served on a communication service provider. The Bill itself is the first step in that consultation exercise. An order-making power to be approved in both Houses by the affirmative resolution

  285
  procedure is to be the second step. We have always maintained that we would consult industry before proceeding with this further legislation.
  The third step is to be the final notice, where we would discuss with each individual service provider what would be the most appropriate form of intercept capability to maintain. That is a detailed discussion with each service provider. It is a more than adequate consultation process between government and industry on what amounts to a reasonable intercept capability. A statutory board could become, as noble Lords recognise, a further bureaucratic layer and an unnecessary addition to what has already been provided for.
  As I have previously suggested, we have always worked with the view that consultations with industry, and resulting subsequent requirements to be placed on Internet service providers, would follow a similar process to that which already exists with the telecommunications industry. We are not asking anything here of Internet service providers that has not previously been asked, and continues to be asked to this day, of telecommunications service providers.
  There are genuine reasons for our opposition to the setting up of a statutory body. We think that those reasons still hold considerable weight, particularly when some very important parts of that industry expressed directly to us their opposition to a statutory body. I am not suggesting that there are fundamental disagreements on the way in which the Government should consult with industry. I am happy to say that all sides agree that there should be a standing body made up of industry and government representatives to advise the Secretary of State on these matters. There is little disagreement on what the body should do or on the need to set it up quickly so that it can have a meaningful input to any order made under Clause 12.
  The only major remaining question is the one which has been raised by virtue of the amendment: whether the body should be statutory or non-statutory. It is not a matter about which we need to become too exercised, but it is clearly one about which the noble Lord, Lord Cope, feels strongly. Indeed, other noble Lords have expressed their strength of view. It would be remiss of us in government not to recognise that very genuine concern. I can say that the Government will consider further whether an advisory body should be set up along the lines suggested by these amendments. I can give that firm commitment.
  However, I hope that noble Lords will appreciate that we shall need to consult further with industry because of the sharp divergence of view that I have explained to the House, and particularly in the light of the fact that there is no universal support for a statutory body. I ask noble Lords to allow the Government to reflect further and to return at Third Reading with our considered position. In the event that the Government were to accept that, on balance, the best option was to have a statutory board, I suspect that lack of time would not allow us to do any more
  286
  than provide an order-making power. However, as I hope that I have made clear, we have not yet reached that position.
  Perhaps I may set out what I am saying to the House at the conclusion of the debate. We recognise the strength of view; we recognise that there is a clear divergence as to whether a non-statutory or a statutory body is the best way of moving forward. There is a shared view about what should be covered in such a board's considerations. That is where the common ground lies. That is the Government's position as we see it.
  The Earl of Caithness: My Lords, the noble Lord said that he will take the matter away and give it consideration. Will he also speak to those noble Lords who have taken part in the debate? We have heard some immensely powerful speeches from noble Lords who think that they will be affected. Will the noble Lord come back to the House before Third Reading so that those of us who are interested will know what the position is?
  Lord Bassam of Brighton: My Lords, I am more than happy to continue that process of consultation with all noble Lords who have contributed to the debate. It is important that I do so in order that we can better formulate our thinking. We shall need to have further discussions, particularly with those companies that have offered us their view that they do not favour the statutory route. They may well require some persuasion. We shall reflect on their comments as well. But we shall consult in detail with the industry in its entirety because we believe that to be the right way forward. We have always made that plain.
  Lord Cope of Berkeley: My Lords, in response to the noble Earl, Lord Erroll, the Minister said that he does not always understand these matters. From time to time we have all experienced that reaction. The noble Lord went on to discuss costs. We shall return to that subject later in our proceedings when we reach Amendment No. 18. Therefore, I shall not at this stage say much in detail on that matter. I simply reflect on the fact that the Government have not revised their estimate from £20 million even though others have estimated the cost involved in the first few years to be as high as £650 million. The figure of £20 million was the only hard thing about costs that the Minister had to say. He said a good many soothing words but each was covered by saving phrases such as "We will consider without commitment" and so on. Those kinds of saving phrases are insisted on at intervals by Her Majesty's Treasury, as some of us know only too well when we have been in the same position as the Minister trying to explain such matters away.
  I turn to the amendment itself, which deals with the question of the advisory board. The Minister rightly said that the matter had been discussed a great deal, not only in our previous debates at Second Reading and in Committee but also at various stages of the Bill's passage through another place. Yet, at the Report stage in this House, the Minister is saying,

  287
  "Give us time to reflect further on this matter. We need to think about it. We will consider whether there should be a statutory board or a non-statutory board". We do not know whether there will be a board of this character, although, from the general flavour of the noble Lord's remarks, we seem to have dragged the Government a good deal further towards that idea over the course of these debates.
  The Minister mentioned some large telephone operators which were not in favour of a statutory board. With respect, I mentioned large numbers of ISPs and those directly involved. They are very much in favour and have confirmed that to me in the past few days. The Government's attitude seems to be, "Just hang on. We will fob you off one more time". I do not feel that that is sufficient. I feel that we should ensure that the Minister and the Government consider this issue carefully by pressing the amendment.
  6.52 p.m.
  On Question, Whether the said amendment (No. 14) shall be agreed to?
  Their Lordships divided: Contents, 155; Not-Contents, 130.

  Division No. 3

  CONTENTS

  Addington, L.

  Elliott of Morpeth, L.

  Alderdice, L.

  Elton, L.

  Anelay of St Johns, B.

  Erroll, E.

  Astor, V.

  Falkland, V.

  Astor of Hever, L.

  Feldman, L.

  Attlee, E.

  Ferrers, E.

  Baker of Dorking, L.

  Flather, B.

  Barker, B.

  Fookes, B.

  Blackwell, L.

  Forsyth of Drumlean, L.

  Blaker, L.

  Fraser of Carmyllie, L.

  Blatch, B.

  Freeman, L.

  Boardman, L.

  Geddes, L.

  Brabazon of Tara, L.

  Geraint, L.

  Bridgeman, V.

  Gilmour of Craigmillar, L.

  Bridges, L.

  Glentoran, L.

  Brittan of Spennithorne, L.

  Goschen, V.

  Brougham and Vaux, L.

  Greaves, L.

  Burnham, L. [Teller]

  Greenway, L.

  Buscombe, B.

  Griffiths of Fforestfach, L.

  Butterworth, L.

  Hamwee, B.

  Byford, B.

  Hanham, B.

  Caithness, E.

  Hanson, L.

  Carnegy of Lour, B.

  Harris of Greenwich, L.

  Carr of Hadley, L.

  Harris of Peckham, L.

  Cavendish of Furness, L.

  Harris of Richmond, B.

  Chadlington, L.

  Haslam, L.

  Clark of Kempston, L.

  Hayhoe, L.

  Clement-Jones, L.

  Henley, L.

  Coe, L.

  Higgins, L.

  Colwyn, L.

  Hodgson of Astley Abbotts, L.

  Cope of Berkeley, L.

  Holme of Cheltenham, L.

  Craig of Radley, L.

  Hooper, B.

  Craigavon, V.

  Howe, E.

  Crathorne, L.

  Howe of Aberavon, L.

  Crickhowell, L.

  Howell of Guildford, L.

  Dahrendorf, L.

  Inglewood, L.

  Dean of Harptree, L.

  Jacobs, L.

  Deedes, L.

  Kimball, L.Kingsland, L.

  Denham, L.

  Knight of Collingtree, B.

  Dixon-Smith, L.

  Lamont of Lerwick, L.

  Eden of Winton, L.

  Lane of Horsell, L.

  288

  Lang of Monkton, L.

  Plummer of St. Marylebone, L

  Lawson of Blaby, L.

  Razzall, L.

  Lester of Herne Hill, L.

  Redesdale, L.

  Liverpool, E.

  Rennard, L.

  Lucas, L.

  Renton, L.

  Luke, L. [Teller]

  Roberts of Conwy, L.

  McColl of Dulwich, L.

  Rodgers of Quarry Bank, L

  Macfarlane of Bearsden, L.

  Roper, L.

  McNally, L.

  Rotherwick, L.

  Maddock, B.

  Russell, E.

  Mancroft, L.

  St. John of Bletso, L.

  Masham of Ilton, B.

  Saltoun of Abernethy, Ly.

  Miller of Chilthorne Domer, B.

  Scott of Needham Market, B.

  Monson, L.

  Seccombe, B.

  Montagu of Beaulieu, L

  Selsdon, L.

  Montrose, D.

  Sharp of Guildford, B.

  Mowbray and Stourton, L.

  Shaw of Northstead, L.

  Murton of Lindisfarne, L.

  Shutt of Greetland, L.

  Newby, L.

  Simon of Glaisdale, L.

  Noakes, B.

  Soulsby of Swaffham Prior, L.

  Northbrook, L.

  Stevenson of Coddenham, L.

  Northesk, E.

  Stodart of Leaston, L.

  Northover, B.

  Stoddart of Swindon, L.

  Norton of Louth, L.

  Strathclyde, L.

  Oakeshott of Seagrove Bay, L.

  Taverne, L.

  O'Cathain, B.

  Thomas of Walliswood, B.

  Onslow, E.

  Tordoff, L.

  Oppenheim-Barnes, B.

  Trefgarne, L.

  Oxfuird, V.

  Waddington, L.

  Patten, L.

  Wade of Chorlton, L.

  Pearson of Rannoch, L.

  Wallace of Saltaire, L.

  Peel, E.

  Walmsley, B.

  Perry of Southwark, B.

  Walpole, L.

  Phillips of Sudbury, L.

  Wilcox, B.

  Platt of Writtle, B.

  Williams of Crosby, B.

  Plumb, L.

  Young, B.

  NOT-CONTENTS

  Acton, L.

  Farrington of Ribbleton, B.

  Ahmed, L.

  Faulkner of Worcester, L.

  Alli, L.

  Filkin, L.

  Amos, B.

  Fyfe of Fairfield, L.

  Andrews, B.

  Gavron, L.

  Archer of Sandwell, L.

  Gibson of Market Rasen, B.

  Ashley of Stoke, L.

  Gilbert, L.

  Bach, L.

  Gladwin of Clee, L.

  Barnett, L.

  Goldsmith, L.

  Bassam of Brighton, L.

  Gordon of Strathblane, L.

  Berkeley, L.

  Goudie, B.

  Bernstein of Craigweil, L.

  Gould of Potternewton, B.

  Billingham, B.

  Grabiner, L.

  Blackstone, B.

  Graham of Edmonton, L.

  Blease, L.

  Grenfell, L.

  Brett, L.

  Hardy of Wath, L.

  Brooke of Alverthorpe, L.

  Harris of Haringey, L.

  Brookman, L.

  Harrison, L.

  Burlison, L.

  Haskel, L.

  Carter, L.[Teller]

  Hayman, B.

  Christopher, L.

  Hilton of Eggardon, B.

  Clarke of Hampstead, L.

  Hollis of Heigham, B.

  Clinton-Davis, L.

  Howells of St. Davids, B.

  Cocks of Hartcliffe, L.

  Howie of Troon, L.

  Crawley, B.

  Hoyle, L.

  David, B.

  Hughes of Woodside, L.

  Davies of Coity, L.

  Hunt of Chesterton, L.

  Davies of Oldham, L.

  Hunt of Kings Heath, L.

  Dean of Thornton-le-Fylde, B.

  Irvine of Lairg, L. (Lord Chancellor)

  Desai, L.

  Dixon, L.

  Islwyn, L.

  Donoughue, L.

  Jay of Paddington, B. (Lord Privy Seal)

  Dormand of Easington, L.

  Dubs, L.

  Jeger, B.

  Elder, L.

  Kennedy of The Shaws, B.

  Ewing of Kirkford, L.

  King of West Bromwich, L.

  Falconer of Thoroton, L.

  Kirkhill, L.

  289

  Laird, L.

  Renwick of Clifton, L.

  Layard, L.

  Richard, L.

  Lea of Crondall, L.

  Sainsbury of Turville, L.

  Lipsey, L.

  Sawyer, L.

  Lofthouse of Pontefract, L.

  Scotland of Asthal, B.

  Macdonald of Tradeston, L.

  Serota, B.

  McIntosh of Haringey, L. [Teller]

  Sewel, L.

  Simon, V.

  McIntosh of Hudnall, B.

  Smith of Gilmorehill, B.

  MacKenzie of Culkein, L.

  Smith of Leigh, L.

  Mackenzie of Framwellgate, L.

  Strabolgi, L.

  Mason of Barnsley, L.

  Symons of Vernham Dean, B

  Massey of Darwen, B.

  Taylor of Blackburn, L.

  Merlyn-Rees, L.

  Taylor of Gryfe, L.

  Mitchell, L.

  Tomlinson, L.

  Molloy, L.

  Turnberg, L.

  Morgan, L.

  Turner of Camden, B.

  Uddin, B.

  Morris of Castle Morris, L.

  Walker of Doncaster, L.

  Morris of Manchester, L.

  Warner, L.

  Murray of Epping Forest, L.

  Warwick of Undercliffe, B.

  Nicol, B.

  Watson of Invergowrie, L.

  Parekh, L.

  Whitty, L.

  Patel of Blackburn, L.

  Wilkins, B.

  Pitkeathley, B.

  Williams of Elvel, L.

  Plant of Highfield, L.

  Williams of Mostyn, L.

  Ponsonby of Shulbrede, L.

  Williamson of Horton, L.

  Prys-Davies, L.

  Winston, L.

  Ramsay of Cartvale, B.

  Woolmer of Leeds, L.

  Rea, L.

  Young of Old Scone, B.

  Resolved in the affirmative, and amendment agreed to accordingly.
  7.3 p.m.
  Lord Cope of Berkeley Lord Cope of Berkeley moved Amendment No. 15:
  Page 14, line 35, at end insert—
  ("( ) the Technical Advisory Board,").
  On Question, amendment agreed to.
  Lord Bach Lord Bach moved Amendment No. 16:
  Page 15, line 3, at end insert ("; and
  (c) for the purpose of facilitating the carrying out of any functions in relation to this Chapter of the Interception of Communications Commissioner;
  but before determining for the purposes of the making of any order, or the imposition of any obligation, under this section what arrangements he considers necessary for the purpose mentioned in paragraph (c) the Secretary of State shall consult that Commissioner").
  The noble Lord said: My Lords, on behalf of my noble friend I should like to move Amendment No. 16. During the Committee's deliberations on the Bill, we gave a commitment to consider how best to ensure that the interception commissioner and his staff are able effectively to scrutinise any interception equipment designed and maintained in obedience to a notice served under Clause 12. Amendment No. 16 is designed to deliver on that commitment.
  The noble Lord, Lord Phillips of Sudbury, spoke to Amendment No. 50A during the debate in Committee, an amendment which would have enabled notices to specify what should be done to provide the commissioner with reliable and verifiable technical means of fulfilling his duties. I am sure that the noble Lord will be pleased to hear that this amendment goes wider than that.
  First, it may apply to both orders and notices made under Clause 12. Secondly, it does not restrict the additional material they may contain only to ensuring reliability and verifiability: it enables them to deal with any matter which may facilitate the carrying out of the commissioner's duties. I hope that the amendment will be welcomed by the noble Lord and by all sides of the House. I beg to move.
  Lord Phillips of Sudbury: My Lords, speaking on my own part, I am entirely content with the way in which the Government have dealt with this issue. I am grateful to the noble Lord.
  On Question, amendment agreed to.
  Lord Cope of Berkeley Lord Cope of Berkeley moved Amendment No. 17:
  After Clause 12, insert the following new clause—

  TECHNICAL ADVISORY BOARD
  (". There shall be a Technical Advisory Board consisting of—

  (a) up to six members appointed by the Secretary of State from among persons affected by section 12 of this Act, and

  (b) up to six members appointed by the Secretary of State representative of persons specified in section 6(2).").

  On Question, amendment agreed to.
  Clause 13 [Grants for interception costs]:
  Viscount Astor Viscount Astor moved Amendment No. 18:
  Page 15, line 12, leave out ("may, if he thinks fit,") and insert ("shall").
  The noble Viscount said: My Lords, I beg to move Amendment No. 18 and speak at the same time to Amendments Nos. 19 and 20. These are simple amendments to Clause 13, in which the Secretary of State is empowered to make payments. In two places we wish to replace the word "may" with "shall" and the word "appropriate" with "fair".
  In Committee we had what was for some noble Lords a somewhat misleading debate on this matter. The Minister was trying to be as helpful as possible, but, when referring to Clauses 12 and 13, he said that he,
  "could offer some assurance to Members of the Committee that the allocation of costs would be addressed very clearly in that order".— [Official Report, 19/6/00; col. 59.]
  He was referring specifically to the order to be made under Clause 12. He went on to say, most helpfully, that he would consult in detail on how it would work and that he would bring forward the relevant legislation.
  However, when one looks at the provision covering the order in Clause 12, it does not in fact refer to costs at all. Subsection (1) refers only to obligations and says nothing about costs. When discussing the order, the Minister confirmed that the Secretary of State would have to have regard to subsection (3) of Clause 13. That is perfectly correct, but the order will refer only to obligations. It will not refer to costs incurred by the industry. The Minister said only that when the Secretary of State brings forward the order he will have to refer to costs. However, that is all that he will have

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  to do: he will need to talk about costs, but they will not form a part of the order. We feel it is important that Clause 13 is strengthened to take account of that.
  The Minister has already put the Government's view on costs in our previous debate, which was helpful. I shall comment on it only briefly. The Minister said that not all ISPs will have black boxes. Although that may be true, one of the difficulties we face is that the Government seem not yet to know which ISPs will have black boxes and which will not. It is certainly the case that the industry does not have a clue. Indeed, the industry does not even understand how this is going to work unless a universal system is put in place. If that is not done, businesses will simply bypass the system.
  We know, after holding discussions with ISPs, that they employ different systems; some are linked, some are compatible and some are not compatible. This area is different from that of telephone systems and exchanges which for a long time have contained equipment for interception. However, it has always been possible to fit such equipment at source; namely, at the exchange. The same does not apply to the Internet industry.
  Internet service providers are diverse. Some companies are large while others are quite small. The Minister stated that, in the case of small ISPs, the Government would try to be more generous. However, while we acknowledge those kind words, we must return to the point that we have only the Government's own estimate of costs at £20 million spread over three years. That estimate has not been in any way agreed by the industry. The noble Lord, Lord Stevenson of Coddenham, who is the chairman of a large company involved in this technology, remarked that, "Nobody knows what it will cost". I think he is right. It is all well and good for the Government to declare that £20 million will be made available over three years, but one knows exactly how government systems work. The money will run out after the first year. A company will come along after that and be told by the Government, "We are very sorry. This is what we promised and we cannot go back to the Treasury".
  We know that costs will be incurred by the industry to maintain and upgrade the equipment. Clause 13 contains no "right of appeal" against those costs unless one opts for judicial review. Noble Lords know how expensive and time-consuming is that process. The powers contained in Clause 13 have been described by some as a form of "Internet tax". The Government might consider that a little unfair, but that is how the provisions are perceived.
  If we are to satisfy some of the concerns expressed by the industry, we must look again at Clause 13 where it states:
  "The Secretary of State may, if he thinks fit, make such payments".
  That is too wide. The industry must know that the Secretary of State will do it. Noble Lords will be aware that, with the best of intentions, Ministers express an intention. However, it is only an intention—not
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  something that is to be found in primary legislation. Therefore, the amendments to which I have spoken are necessary for the purposes of the Bill. I beg to move.
  Lord Phillips of Sudbury: My Lords, I support entirely the words of the noble Viscount. These amendments are absolutely minimalist. To contend with the immense underlying unease about the sharing of cost, if it be shared, these amendments could not be more modest. If the Government are not prepared to accept these amendments, we shall be on a collision course, not least because there is no requirement under the clause to lay any kind of order. In any event, the amendments do not impose on the Secretary or State any specific requirement but merely tighten up to a significant, but not excessive, degree the objectivity of the judgment that he or she must bring to bear in deciding what grants to make under the clause.
  I shall be grateful if in his response the Minister can confirm my impression that the words of the noble Lord, Lord Bassam, a few minutes ago were intended to reassure the House that the recommendations of the Smith report with regard to these wonderful black boxes—namely, that the Government would pay for the design and software development—have been taken on board by the Government. The noble Lord did not make specific reference to that, and I should be grateful if he would deal with the matter in his response. Plainly, that is germane to the burden which business may be called on to shoulder.
  Lord Cope of Berkeley: My Lords, before the noble Lord sits down, does he agree that paying for the initial development of the software and so on is one thing? The Minister was not even specific about that because his comments were hedged about with all kinds of subsections. The Minister said specifically that the Government would not pay for the upgrades at all. In times of rapidly changing technology, upgrades can in some cases be the expensive bit.
  Lord Phillips of Sudbury: My Lords, I am delighted to confirm entirely what the noble Lord says. That is another reason why these minimalist amendments should be accepted without demur.
  7.15 p.m.
  Viscount Goschen: My Lords, I agree with the noble Lord, Lord Phillips of Sudbury, that if the Government are not prepared to accept these amendments we shall have real difficulties. These amendments still provide considerable scope for interpretation. The word "fair" cannot be pinned down and defined very well. If the Minister uses that as his only defence, I suggest that it is a self-defeating argument which will encourage my noble friends on the Opposition Front Bench to return with much stronger amendments than the ones we are considering tonight.
  I welcome the initiative of the Government in trying to inject additional clarity into their approach to funding the equipment, the running costs and the whole process of interception. It was helpful that the

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  noble Lord came before the House and said what he did. It was very strange that at previous stages of the Bill the Minister was unable to make any comment on the Government's approach to funding. However, by putting forward the figure of £20 million he has set more hares running than he has managed to corral. As we have heard around the Chamber at this and previous stages of the Bill, there are greatly differing estimates of the cost of installing the interception equipment. The figure of £20 million may be a very small percentage of the overall cost and put the burden fairly and squarely on the operators. Like the noble Lord, Lord Phillips, and my noble friend Lord Cope, I find it difficult to square that with the Government's more generic statements about their approach.
  I am at a loss to understand the noble Lord's argument about the number of ISPs to which these provisions will apply. The noble Lord approaches the matter in a vague manner and makes the generic statement that we should not worry because it will involve only a few, without saying which ones it is likely to be. He says that perhaps it is just a sample. I do not see how the Minister can make such vague statements and yet come up with a specific funding proposal of £20 million. If the provision is to apply to only a small percentage of ISPs, £20 million may or may not represent a significant percentage of the cost. The provision may apply to many more ISPs than the noble Lord indicates. The Minister puts forward no evidence at all to justify his stab (if I may so describe it) at the number of ISPs which will be required to install the equipment. We are groping in the dark. The noble Lord simply lights a very small candle and tells us not to worry because it will show us the way. My noble friend's amendments are modest. The amendments inject a greater degree of clarity about the burden on the Secretary of State and I wholeheartedly support them.
  Lord Lucas: My Lords, the noble Lord, Lord Bassam, made a very good point in his speech on the previous group of amendments. He said that it was important that both the ISPs and the Government shared the financial responsibility for the decisions that would be taken. I believe that that is what we should try to achieve. Clearly, the ISPs must bear part of the cost. They have considerable ability to keep down the costs and need an incentive to do so. Anyway, if they did not have to contribute, they would merely trot off to any good defence contractor and find out how to turn costs into high profits. It is entirely right that the ISPs should make a fair contribution.
  Similarly, the Government must be bound by financial responsibility and should not be able to cast unquantifiable costs on to the ISPs and bear none of it themselves. If the cost turns out to be £300 million, the Government must go for budgetary approval for a sum that bears a proper relationship to that cost. A sensible proportion that comes to mind is half. Therefore, if it is worth £150 million to the Government, perhaps they are right to ask for a similar
  294
  contribution from ISPs. The present wording of the Bill does not do that. Under Clause 13, the Secretary of State has get-out after get-out after get-out. The first amendment merely removes one of those get-outs and leaves him with a pretty full set of flexibilities. The word "appropriate" is incapable of judgment, except that it is quite clear that it can be biased far more in the Secretary of State's favour than is appropriate. We should, therefore, insert a word such as "equitable" or "fair" which implies something closer to 50:50. The Bill would then be exactly in line with the way that the noble Lord, Lord Bassam, expressed himself in his previous speech, which surely can be no bad thing.
  Lord Howell of Guildford: My Lords, I simply ask: how can the Government quantify these costs when they cannot define the scope of the Bill, as we have already heard in debate this evening and, I am sure, also in Committee? It is not clear to what extent the provisions are to be applied and how they will work, given the fact that a great many service providers and operations are located, at least partially, overseas. One thinks of the simple operation of transferring information and messages from local files to remote sites through the appropriate transfer protocol. In many cases that is done through remote sites which are deliberately not sited in the UK either because the technology has originated in America or because of low cost high quality provision elsewhere. India, for example, already provides remote site storage for a vast range of information and collects e-mails and website transfers through the necessary protocols on a colossal scale. Where will it come into the equation? What part of its operation will be addressed by this Bill? What costs will it have to pay?
  Unless we can begin to answer these questions the debate about costs is in the area of fantasy. I do not see how this House, let alone the general public or industry, can be asked to plunge ahead with legislative provisions which are so stratospherically vague and unrelated to any definition of scope which could seriously give us a basis on which to compute the cost of this operation.
  Lord McNally: My Lords, I make one further appeal to the Minister. I thought my appeal made during the previous debate had almost succeeded. The Minister teetered on the edge of making a sensible decision, but then he was dragged back, presumably by the Treasury. Looking from the outside, the words "shall" instead of
  "may, if he thinks fit"
  and "a fair" rather than "an appropriate" to the reasonable person appear to be addressing the word "confidence" as regards industry. The noble Lord, Lord Howell, said that the Government stick grimly to the figure of £20 million. They hysterically rubbish any larger figure and in the process cause deep consternation in industry. I want to see this Bill finish up in good shape. These are not destructive

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  amendments in any way, but make the Bill much better and they will raise much greater confidence in industry.
  Lord Bassam of Brighton: My Lords, this debate is a reflection on the previous one and the comments that I made about costs. I accept that that is right. I made a statement on government policy and the way in which we believe we should develop our thinking in this area. The issue of costs revolves in part around a sense of trust. Perhaps it is because there has been a hyping of the debate that a view is emerging in some quarters that £20 million will be far too small a sum of money to cover the set up costs which we have made plain we shall cover. We do not see the exercise as being as extensive as some have imagined. It is that imagining that troubles me most in this debate.
  I shall go over some of the points that have been made during the course of this discussion as briefly as I can. The noble Viscount, Lord Astor, asked me to correct something that was said during Committee stage. I gave that correction during an earlier debate, but I am not sure whether the noble Viscount picked it up. If it helps the House I shall repeat it for the record. It concerns the allocation of costs and how they will be dealt with in Clause 12.
  I said that the order itself will not deal with costs, but the Secretary of State, in presenting the order to Parliament, will in practice have to explain the position on costs. That is partly because Parliament will expect it and partly because the Secretary of State will have to show that he has this duty under Clause 13(3). That is the correction. I wanted to put the matter right. I believe that the noble Viscount raised the matter with officials. He was right and I was wrong in what I said in Committee. I apologise to the House for that. It was not a deliberate error on my part and neither was I seeking to mislead. It was simply an error. It is only right that we put it on the record and get the matter corrected.
  I turn to the amendments. There is good and bad news here. I am sure that the noble Viscount will be pleased to hear that we are happy to accept the suggested substitution of the word "fair" for the word "appropriate", as drafted. We have always said that we would he willing to look at this in a positive light, as we do at all times, in order to try to improve the Bill. Our initial view was that fairness could have been a factor to take into account in any event if one has the appropriate test to comply with. Nevertheless, if the Secretary of State is to make a payment we are happy to agree that he cannot make one that is less or more than a reasonable Secretary of State would consider to be fair.
  Furthermore, Amendments Nos. 19 and 20 will ensure that the payments made to one operator are fair in relation to the payments he is making, or proposing to make, to other operators for an equivalent service. We are happy to accept Amendments Nos. 19 and 20.
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  I am sorry to disappoint the noble Viscount as regards Amendment No. 18, which requires that the Secretary of State "shall" make payments to communication service providers rather than "may". As regards Clause 12, we discussed at some length the issue of costs which may be incurred by industry and how the Government intend to alleviate them. I do not wish to detain the House by repeating that debate except to say that we have given our commitment to provide the sum of £20 million over the next three years to help Internet service providers who are required to maintain such a capability.
  Noble Lords will be aware that the Government have previously amended the Bill to set out explicitly our commitment to pay the marginal costs incurred by communications service providers as regards processing each interception warrant. These marginal costs include the cost of providing staff, the overheads incurred and also the cost of transporting the intercept product to the intercepting agency. All these costs are currently, and will continue to be, met by the Government in addition to the extra £20 million to which I have just referred. I do not accept that it is now necessary to go any further than the commitments which have been given. I trust that the noble Viscount will feel able to withdraw Amendment No. 18.
  Viscount Astor: My Lords, I am grateful to the Minister for his agreement to Amendments Nos. 19 and 20. I am also grateful for what he said about the order-making power in Clause 12, which, as I believe we now both agree, will not refer to costs, but that at the time the Secretary of State will explain it. That is helpful, but it makes it more important that we get Clause 13 right.
  The Minister gave his commitment to £20 million and I accept that. But it is his commitment, and not one which is in the Bill. It is something separate. If the noble Lord accepts Amendments Nos. 19 and 20 the effect will be that the Secretary of State may, if he sees fit, make a payment and if he does so it has to be fair. It is not said that the Minister has to accept it because unless we include the word "shall" he does not have to make the payment at all.
  The Minister said that the Bill revolves around trust. I accept that and that the Minister is an honourable person. But tonight we are not debating trust; we are debating legislation. What matters is passing good legislation in this House. I accept the Government's assurances, but we need to make sure that the legislation we pass in this House is correct. On that basis I accept the noble Lord's generous offer on Amendments Nos. 19 and 20, but I shall have to test the opinion of the House on Amendment No. 18.
  7.28 p.m.
  On Question, Whether the said amendment (No. 18) shall be agreed to?
  Their Lordships divided: Contents, 131; Not-Contents, 119.

  Division No. 4

  CONTENTS

  Addington, L.

  Kingsland, L.

  Alderdice, L.

  Knight of Collingtree, B.

  Anelay of St Johns, B.

  Lamont of Lerwick, L.

  Astor, V.

  Lane of Horsell, L.

  Astor of Hever, L.

  Lester of Herne Hill, L.

  Attlee, E.

  Liverpool, E.

  Baker of Dorking, L.

  Lucas, L.

  Barker, B.

  Luke, L.

  Beaumont of Whitley, L.

  McColl of Dulwich, L.

  Biffen, L.

  McConnell, L.

  Blackwell, L.

  Macfarlane of Bearsden, L.

  Blaker, L.

  McNally, L.

  Boardman, L.

  Maddock, B.

  Brabazon of Tara, L.

  Mancroft, L.

  Bridgeman, V.

  Miller of Chilthorne Domer, B.

  Brittan of Spennithorne, L.

  Montagu of Beaulieu, L.

  Brougham and Vaux, L.

  Montrose, D.

  Burnham, L. [Teller]

  Murton of Lindisfarne, L.

  Buscombe, B.

  Newby, L.

  Byford, B.

  Newton of Braintree, L.

  Carnegy of Lour, B.

  Noakes, B.

  Carr of Hadley, L.

  Norfolk, D.

  Cavendish of Furness, L.

  Northbrook, L.

  Clark of Kempston, L.

  Northesk, E.

  Clement-Jones, L.

  Northover, B.

  Coe, L.

  Oakeshott of Seagrove Bay, L.

  Colwyn, L.

  Onslow, E.

  Cope of Berkeley, L.

  Oppenheim-Barnes, B,

  Craigavon, V.

  Oxfuird, V.

  Crathorne, L.

  Parkinson, L.

  Crickhowell, L.

  Pearson of Rannoch, L.

  Dahrendorf, L.

  Perry of Walton, L.

  Dean of Harptree, L.

  Peyton of Yeovil, L.

  Denham, L.

  Phillips of Sudbury, L.

  Dixon-Smith, L.

  Platt of Writtle, B.

  Eden of Winton, L.

  Elton, L.

  Plumb, L.

  Falkland, V.

  Redesdale, L.

  Feldman, L.

  Rees, L.

  Ferrers, E.

  Rennard, L.

  Fookes, B.

  Renton, L.

  Forsyth of Drumlean, L.

  Roberts of Conwy, L.

  Garel-Jones, L.

  Rodgers of Quarry Bank, L.

  Geddes, L.

  Roper, L.

  Geraint, L.

  Rotherwick, L.

  Gilmour of Craigmillar, L.

  St John of Fawsley, L.

  Glentoran, L.

  Scott of Needham Market, B.

  Goschen, V.

  Seccombe, B.

  Greaves, L.

  Selsdon, L.

  Greenway, L.

  Sharp of Guildford, B.

  Hamwee, B.

  Shaw of Northstead, L.

  Hanham, B.

  Shutt of Greetland, L.

  Hanson, L.

  Soulsby of Swaffham Prior, L.

  Harris of Greenwich, L.

  Stodart of Leaston, L.

  Harris of Peckham, L.

  Strathclyde, L.

  Harris of Richmond, B.

  Taverne, L.

  Haslam, L.

  Thomas of Gwydir, L.

  Hayhoe, L.

  Thomas of Walliswood, B.

  Henley, L. [Teller]

  Trefgarne, L.

  Higgins, L.

  Waddington, L.

  Hodgson of Astley Abbotts, L.

  Wade of Chorlton, L.

  Hooper, B.

  Wallace of Saltaire, L.

  Howe of Aberavon, L.

  Walmsley, B.

  Howell of Guildford, L.

  Wilcox, B.

  Inglewood, L.

  Williams of Crosby, B.

  Jacobs, L.

  Young, B.

  298

  NOT-CONTENTS

  Acton, L.

  Hoyle, L.

  Ahmed, L.

  Hughes of Woodside, L.

  Alli, L.

  Hunt of Chesterton, L.

  Amos, B.

  Hunt of Kings Heath, L.

  Andrews, B.

  Irvine of Lairg, L. (Lord Chancellor)

  Archer of Sandwell, L.

  Ashley of Stoke, L.

  Islwyn, L.

  Bach, L.

  Jay of Paddington, B. (Lord Privy Seal)

  Bassam of Brighton, L.

  Berkeley, L.

  King of West Bromwich, L.

  Bernstein of Craigweil, L.

  Kirkhill, L.

  Blackstone, B.

  Layard, L.

  Blease, L.

  Lea of Crondall, L.

  Brett, L.

  Lipsey, L.

  Brooke of Alverthorpe, L.

  Lofthouse of Pontefract, L.

  Brookman, L.

  Macdonald of Tradeston, L.

  Burlison, L.

  McIntosh of Haringey, L. [Teller]

  Carter, L. [Teller]

  Chandos, V.

  McIntosh of Hudnall, B.

  Christopher, L.

  MacKenzie of Culkein, L.

  Clarke of Hampstead, L.

  Mackenzie of Framwellgate, L

  Clinton-Davis, L.

  Massey of Darwen, B.

  Cocks of Hartcliffe, L.

  Mitchell, L.

  Crawley, B.

  Molloy, L.

  David, B.

  Morgan, L.

  Davies of Coity, L.

  Morris of Castle Morris, L.

  Davies of Oldham, L.

  Morris of Manchester, L.

  Dean of Thornton-le-Fylde, B.

  Nicol, B.

  Desai, L.

  Parekh, L.

  Dixon, L.

  Patel of Blackburn, L.

  Dormand of Easington, L.

  Pitkeathley, B.

  Dubs, L.

  Plant of Highfield, L.

  Elder, L.

  Ponsonby of Shulbrede, L.

  Evans of Watford, L.

  Prys-Davies, L.

  Ewing of Kirkford, L.

  Ramsay of Cartvale, B.

  Falconer of Thoroton, L.

  Rea, L.

  Farrington of Ribbleton, B.

  Renwick of Clifton, L.

  Faulkner of Worcester, L.

  Richard, L.

  Filkin, L.

  Sainsbury of Turville, L.

  Fyfe of Fairfield, L.

  Scotland of Asthal, B.

  Gale, B.

  Sewel, L.

  Gavron, L.

  Simon, V.

  Gibson of Market Rasen, B.

  Smith of Gilmorehill, B.

  Gilbert, L.

  Smith of Leigh, L.

  Goldsmith, L.

  Strabolgi, L.

  Gordon of Strathblane, L.

  Symons of Vernham Dean, B.

  Goudie, B.

  Taylor of Blackburn, L.

  Gould of Potternewton, B.

  Tomlinson, L.

  Grabiner, L.

  Turner of Camden, B.

  Graham of Edmonton, L.

  Uddin, B.

  Grenfell, L.

  Walker of Doncaster, L.

  Hardy of Wath, L.

  Walpole, L.

  Harris of Haringey, L.

  Warner, L.

  Harrison, L.

  Warwick of Undercliffe, B.

  Haskel, L.

  Watson of Invergowrie, L.

  Hayman, B.

  Whitty, L.

  Hilton of Eggardon, B.

  Wilkins, B.

  Hollick, L.

  Williams of Mostyn, L.

  Hollis of Heigham, B.

  Williamson of Horton, L.

  Howells of St. Davids, B.

  Woolmer of Leeds, L.

  Howie of Troon, L.

  Young of Old Scone, B.

  Resolved in the affirmative, and amendment agreed to accordingly.
  7.38 p.m.
  Lord Bach: My Lords, I beg to move that consideration on Report be now adjourned. In moving the Motion I suggest that the Report stage begin again not before 8.40 p.m.

  299
  Moved accordingly, and, on Question, Motion agreed.

Millennium Dome
7.40 p.m.
Lord Lamont of Lerwick Lord Lamont of Lerwick asked Her Majesty's Government whether they will set up a committee of inquiry into the financing and operation of the Millennium Dome.
The noble Lord said: My Lords, I am grateful for the opportunity to introduce this short debate suggesting that the Government should set up a public inquiry into the operation and finances of the Millennium Dome. In doing so, I am supporting the Government's own supporters in the House of Commons. Forty-six Labour MPs have signed a Motion calling for a public judicial inquiry. Of course I know that Sir John Bourn of the National Audit Office is holding an inquiry, but only into the last loan made to the Millennium Dome. That inquiry will not be in public and will be restricted in scope.
The case for an inquiry is simple. The original budget was the astonishing figure of £758 million. But more than £600 million of public money from the lottery has been spent, which is considerably more than forecast. Where has all that money gone? As the Motion tabled by the Labour Members of Parliament recognises, £758 million in a public/private partnership could have been spent on many different things. The same sum of money could have bought 10 new hospitals; paid the salaries of 50,000 new nurses for a year; bought 35,000 kidney machines; or built four Royal Opera Houses.
The noble and learned Lord, Lord Falconer, is widely liked and respected in this House and it would be wrong to blame him for all that has gone wrong in the project. We know who is to blame—or if we did not know, we were informed in the Sunday Express on 26th May, when it was reported that no less than the Chancellor of the Exchequer, in a way to which we have grown used under this Government, blamed Peter Mandelson and his vanity and obsession about following in the footsteps of his grandfather. When Mr Mandelson experienced his Luciferian fall from grace, it was possibly the luckiest thing that every happened to him. But it was bad luck on the noble and learned Lord, Lord Falconer, who stands before us tonight as the sole shareholder.
I have of course visited the Dome and I have to say that I was impressed at least by the beauty, scale and sweep of the building designed by the noble Lord, Lord Rogers. I admired it. As regards the inside, I kept remembering the Prime Minister's words:
"In this Experience I want people to pause and reflect on this moment, about the possibilities ahead of us, about the values that guide our society … It will be an event to lift horizons. It will be a catalyst to imagine our futures".
What was he thinking of? Was he thinking of the sign stating "Money this Way"; or was he thinking of the educational value of asking people to vote on whether
300
the Prince of Wales should marry Camilla Parker-Bowles; or to vote on whether the future will be better than the past? The audio visual gimcrackery was not much above the level of Skegness 20 or 30 years ago.
The silliest remark ever made by the Prime Minister was that Britain is a young country. You can say many things about Britain—that it is an enterprising, innovative, forward-looking country—but the one thing you cannot say is that it is a young country. But in the Dome, Britain had to be rebranded so there is nothing in it that is historical. There is no English language zone about the contribution of the English language to civilisation. There is nothing about the great figures of English history. There is nothing about the fact that Britain invented almost all sports in the world other than basketball. New Labour wanted a monument to themselves and, disastrously, they have succeeded.
No amount of assertions by the noble and learned Lord that the Dome attracts more visitors than any other paying attraction in this country can disguise the fact that it has been a financial disaster. The noble and learned Lord's formulation is, with respect, rather facile as more and more non-paying visitors are being invited in school parties to the Dome, so that he can stand up in this House and say that more and more visitors are going there. It has almost become a self-fulfilling prophecy.
The Dome ought to have more visitors than any other paying attraction after £538 million of public money has been injected into it. The main point is that the budgets have been hopelessly wrong, visitor numbers have been miles below the original estimates, and the project has been bailed out three times by the Millennium Commission. But to the Government it remains a tremendous success.
The new chief executive, Mr Gerbeau, in an interview in the Sunday Telegraph last weekend, said that he was told by the Government when he took over that the Dome was on budget. Two months later, according to the report, he discovered that it was £26 million adrift. Perhaps the Minister will comment on that.
The Government continue to assert that everything is fine, but it is not. Chris Smith, acting not as Minister but as chairman of the Millennium Commission, had to give a direction to the commission's accounting officer, Mr Mike O'Connor, on the last loan of £29 million. The Secretary of State, in a letter dated 26th May, stated:
"When such a direction is made, it is reported to the Comptroller and Auditor General".
Mr O'Connor, the director of the Millennium Commission, made it clear that in his opinion the £29 million did not represent value for money.
That was the very same Mike O'Connor who, in an interview in Sunday Business on 26th December last year, with great foresight said:
"If I thought something was poor value for money or imprudent I'd ask for a direction in writing … and take that to the Audit Office … This is rarely done … and it is our way of saying something is wrong".
"Something is wrong" are the magic words that have not been uttered. It would be much appreciated if tonight we could face up to the difficulties.
Will the Minister answer the question which he was repeatedly asked by the Select Committee this afternoon: will the last loan of £29 million mean that the New Opportunities Fund for education, environment and health projects will have £29 million less when it takes over the Millennium Commission's money?
What we would like to hear in the Minister's reply is realism about the project. On 12th January this year, I asked the Minister to confirm that the daily average of visitors to the Dome was around 10,000, reaching only 20,000 to 25,000 at the weekend, and was way below the target figures. At the time, he declined to confirm my figures and replied that,
"The operational level of numbers coming in is entirely satisfactory for January".—[Official Report, 12/1/00; col. 626.]
"Entirely satisfactory"? Only three weeks later, it was announced that the Millennium Dome needed to borrow yet another £60 million from the Millennium Commission, of which £32 million was released immediately. If everything was "entirely satisfactory", why was that loan necessary on top of the £50 million already extended because of the poor advance ticket sales?
As it turned out, the figure for January was extremely bad; 344,620 paying visitors. On an annual basis, that would have meant 4 million visitors instead of the 10 million to 12 million expected. The average number of paying visitors a day in January was about 11,000, which was well below the target of 27,000. That was January and of course it was difficult; it was early. However, my point relates to the lack of realism in replying to the question.
The Dome must be judged not by whether it is the most popular destination but whether it achieves the targets which have been set for it. The more the Government repeat that it is a great success, the stronger the case for an inquiry. It simply is not true that it is a great success. People are entitled to know why successive business plans have not been met.
I have given the Minister notice of specific questions that I would like him to answer. First, the simple question is: what, on reflection, does he think went wrong? Secondly, the commercial income is obviously much lower with only 6 million visitors now expected instead of 12 million. Is that gap in commercial income fully covered by the loans that have already been made from the Millennium Commission? Will the Minister guarantee that the loans made will be repaid and that there will be no further loans? Will he guarantee that there will be no further finance put in by the back door? In particular, will he guarantee that the money which would have gone to English Partnerships to regenerate urban wastelands will not be used to subsidise the Dome? A Minister was quoted as saying:
"The voters have never heard of English Partnerships. They don't care two hoots if it doesn't get the money".
That was quoted in the Sunday Telegraph at the weekend. If that did happen, that would be using taxpayers' money by the back door.
The Millennium Dome should have been a great inspiration. The Great Exhibition of 1851 was a remarkable celebration of Britain's creativity, of the greatness of the arts, and of manufacturing and commerce in this country. No comparison between the Great Exhibition and the Millennium Dome is possible because no comparison would be appropriate. Sadly, the epitaph on the Millennium Dome will be the words of the Deputy Prime Minister:
"If we can't make this work, we're not much of a Government".
We shall be interested to see whether the Minister can seriously maintain that this project is working.
7.50 p.m.
Baroness Dean of Thornton-le-Fylde: My Lords, I thank the noble Lord, Lord Lamont, for giving us the opportunity to discuss this issue this evening. It is not a new issue for discussion in this House. However, in the context of his speech, I was interested to listen to what he said. One would not dream that the Administration of which he was at one time a Minister was the initiator of the Dome and of what happened on the peninsula.
I believe that it is wrong to take the Dome in isolation. One must consider that the whole peninsula on which it was built was polluted. Certainly, private sector funding alone would never have cleaned it up. The noble Lord said that he has visited the Dome. I wonder whether he went to the peninsula before any of the development took place. Now it has jobs and the Jubilee Line. I believe that it is questionable whether the nine stations on that line would ever have been built without the initiative of the Dome.
I declare an interest as chairman of a housing corporation. I am interested in housing in London, and London in particular has a serious problem with regard to affordability. There will be 3,000 mixed tenure houses on the peninsula, 1,400 of them in the Millennium Village and 20 per cent of them affordable houses for people in London who need homes. I believe that if one considers the jobs, the houses that have been built and the regeneration that has taken place, the whole project sits very comfortably with any kind of economic assessment.
However, the noble Lord is right when he talks about examining the taxpayers' money that has been spent. All noble Lords in this House, of whatever party or whether they are Cross-Benchers, must support accountability and questioning where public money has been spent. More than 1,000 questions on the Dome have been asked in both Houses. There have been five Select Committee appearances with regard to the Dome—that is, before independent committees in the other place. There have been three debates in this House and, I believe, two debates in the other place. The Houses of Parliament is where questioning of Ministers should take place. However, in my view, on this issue alone the level of questioning has almost reached overkill.

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The noble Lord began by speaking specifically about a public inquiry into the issue. I should have been more convinced about the sincerity of a commitment to a public inquiry as the right way to achieve public accountability if the track record of the previous Administration had been better. There was no public inquiry into the "Marchioness" disaster, which had far more impact on the people of London and this nation than has the Dome in money terms. There was no public inquiry into the BSE scandal, and we are still paying for that in terms of money, of jobs and, indeed, of people losing their homes. There was no public inquiry—indeed, no inquiry of any note—into the Stephen Lawrence murder in London.
I question strongly whether there is a need for an inquiry into a matter on which Parliament—the elected body and, indeed, this place as a second Chamber—continually has placed Ministers under questioning on how the money has been spent.
The noble Lord was right to refer to the Select Committee which sat this morning. The Minister on the Front Bench this evening appeared before that committee, and that is the right way in which to deal with this matter. Politically, it may be easy to argue for an inquiry because it may attract much criticism of the present Administration. However, I believe that in the pecking order of priorities of people in the country, this matter is not a priority. The questions have been asked, the inquiries have taken place and Ministers have answered, as they should do. They should be accountable and I hope that they will continue to be accountable over this issue in the right and proper way.
When all is said and done, nothing but positive news has come from the peninsula. It has been good for London and it has certainly been good for Britain. Last week I was privileged to attend the 4th July party at the American Ambassador's house. The noble Lord, Lord Lamont, may have been there, too. If he was, I wonder whether he read the brochure that we were given. The inside of the front page of that brochure opened with the words—I paraphrase:
"We are delighted to he associated with the Millennium Dome".
There were very positive words about the Dome. Certainly they were very positive so far as concerns Britain's position in international tourism and our standing in the international scene.
However, that is simply a side benefit. The real benefits to be derived are the jobs, people's homes and the regeneration. The Dome is a lasting monument to the Millennium. I utterly reject the need for a public inquiry into the matter. I hope that the Minister will do the same, because the inquiry has been taking place continually and no doubt will continue to take place.
7.56 p.m.
Lord Clement-Jones: My Lords, I add my thanks to the noble Lord, Lord Lamont, for initiating this debate, if only to allow us to get some views about the Dome off our chests this evening.
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I passed a church in Stockwell yesterday which had a big sign outside to which I felt that I could relate. It said:
"God knows all about you but He still loves you".
I believed that that would form an apt basis for my few words tonight about the Dome.
I know all about the Dome —or, at least, a great deal—but I still believe in it. Few public projects have come under such great scrutiny. The Channel 4 programme, for example, on the creation of the Dome and its zones was riveting. We have no shortage of figures on the Dome. I have a pile of press cuttings and, indeed, as the noble Baroness, Lady Dean, made clear, 1,000 questions on this subject have been asked in the recent past, and we know what the Lottery money paid for.
As PY Gerbeau pointed out from his continental perspective, the Dome is the ultimate political football. Political passions have been permanently on the boil and often at variance within each party, not least in my own party. One would believe that this was as important an historical issue as whether we supported the Boer War or Suez.
Yet the irony is that it had strong all-party backing from prominent individuals at the time of its inception. Michael Heseltine in particular, to his credit, on the Tory side was one of the begetters of the Dome. Of course, there have been mistakes. Perhaps the greatest were: giving free tickets or discount packages to the core target audience of children of school age, whose parents happily would have paid; the New Year's Eve arrangements clearly stick in the minds of newspaper editors and prominent television executives; and the marketing budget allocated was probably insufficient at the time. Perhaps there should have been a guiding creative spirit or ringmaster, but that in itself is a very high risk.
However, a huge number of things about the Dome went right, not least completing the Jubilee Line on time, which the pessimists doubted would happen. A record amount of sponsorship was achieved in teeth of considerable scepticism. Above all, the Dome and its contents were completed on time.
This speech is not delivered with 20/20 hindsight in any form. I have backed the Dome as a concept from its inception and I believe that the benefits that it has brought far outweigh the drawbacks. I have lived in London all my working life and the one thing about which I am quite passionate as a politician is the regeneration of our inner city. In that respect the Dome has been a triumph in bringing major benefits in terms of new transport links, land reclamation and employment.
However, the Dome is also a triumph as an experience. When I visited it last summer, I was impressed by the work in progress and I was even more impressed when I went back this spring with my family. I was fortunate in being the guest of a sponsor, but I do not believe that my judgment or that of my family would have been any different had I been a paying visitor. I am in good company. Some 85 per cent of visitors surveyed said something similar.

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PY Gerbeau yesterday challenged the public not to be put off by the adverse publicity and to see for themselves. I recommend that course of action. In a three-hour visit, my family and I saw the main show and the body, journey, work and learning zones. All were stimulating and great fun. The eating facilities were excellent and the architecture of the Dome was magnificent. The management of the queues was excellent, too.
I disagree with the distinguished architect, the noble Lord, Lord Rogers, who says that there is an element of dumbing down. The Tate Modern is an entirely different enterprise. The Dome has a serious underlying educational purpose that it achieves superbly. I look forward to going again soon. My message to those who have not been is to get there before the end of the year or they will regret it.
For those reasons and others, I fully support the injection of an additional £29 million grant from the Millennium Commission. It would have been folly to allow the Dome to fail. That could have led to the need to dispose of it at a knock-down price, had a major effect on the economy of south-east London and, above all, deprived 4 million people of the chance to experience the Dome. Massive compensation would have had to be paid to sponsors and others. It was far better to ensure that the Dome remained in operation in its current form until the end of the year and then have an orderly handover to whoever wins the right to take over.
It is unnecessary to call for an inquiry when the Select Committee on Culture, Media and Sport is already conducting one and an inquiry has been initiated by Sir John Bourn and the National Audit Office into the finances of the Dome. How many inquiries do we need? That does not mean that the Minister should not answer a number of questions on the Dome. Indeed, a search of parliamentary Questions reveals that he has probably been doing little else since the beginning of the year.
There were many unforeseeable aspects of the Dome. That is showbusiness. Ask Sir Cameron Mackintosh or Harvey Goldsmith. Even the most brilliant impresario cannot guarantee that the public will file through the door. As the New Millennium Experience Company is at pains to point out, the Dome is still the attraction with the biggest paying audience in the country, with 3·2 million people having visited to date. It is second only to Disneyland Paris in Europe. I do not agree with the noble Lord, Lord Lamont, that those are figures to be easily disparaged. The course on which the Dome now seems to be set is welcome and the undertakings that have been made not to go back to the Millennium Commission for more money and to put into effect £24 million of cost reductions are wholly welcome.
My favourite comment from a visitor to the Dome was that those who did not enjoy it needed to check their pulse. It may be that in the debate on the Dome we all need to check our pulse. There has been an attempt to turn disappointment and some ill luck in to
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a scandal. It is no such thing. There may be disagreement on whether the money should have been spent in the first place, but that is an entirely different matter. I suspect that when we look back, some commentators and politicians will be seen to have become rather over-excited about the Dome. I wish the Dome and its new management well.
8.2 p.m.
Lord Brooke of Alverthorpe: My Lords, I am very pleased to follow the noble Lord, Lord Clement-Jones. I shall speak in a similar vein. When the Government came to power and picked up the plans from their predecessors, I had no strong feelings for or against the project. The Government decided to go with it, so I felt that it was right that we should seek to make a success of it once we had made that decision.
There have been problems, as we are only too well aware. The number of visitors has disappointingly fallen short of the original targets, but there are some reasonable explanations for that. It is fascinating that we have an 85 per cent satisfaction level among those who have been, yet adverse publicity continues to deter others from going. That is the kind of issue that we should inquire into.
I was not surprised that the Dome ran into problems with public relations and media response. My wife was never in favour of the Dome—she felt that we should have been building hospitals instead—but she was aghast to see some of the media coverage during November and December last year, before it opened. I particularly recall "Watchdog" on BBC1 spending about 20 minutes attacking the Dome, claiming that people would have problems getting there because the Jubilee Line would not be finished on time and raising a host of other issues. Even though she was opposed to the project, my wife felt that that programme would significantly reduce the likelihood of the people who watched it going to the Dome.
I congratulate the Minister on the work that he has done in difficult circumstances. The Government are to be congratulated on delivering the Jubilee Line on time. I agree that without the Dome we would probably still be overspending on that project and it might well still not be completed. The overspend on the Jubilee Line is phenomenally higher than any overspend on the Dome. If we are going to have an inquiry into something that has been really expensive, I suggest that we look at the Jubilee Line well before we come to the Dome.
I also congratulate the Government on the regeneration that has been effected in the region, particularly the number of jobs that have been created. I particularly congratulate them on finishing the Dome on time. That was a marvellous achievement, given the relatively short time in which they had to work.
There have been problems from the beginning, but the events of New Year's Eve were the real killer. Many of our influential opinion formers suffered the indignity of having to queue—an unforgivable thing to require them to do—for two hours before they were

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able to get in. That sealed the Dome's fate when it came to publicity in the media. If we are to have an inquiry, I would welcome one on how a relatively small number of people—who are in many respects unaccountable—can so influence the course of events, primarily through our highly competitive populist media. My friend, the noble Lord, Lord Lamont, knows from his personal experiences that when the media set their minds on a particular target, they do not let go until they have delivered.
We are not going to have an inquiry. Given all the inquiries that have already been undertaken into the Dome, there is no case for another. We have not had public inquiries in the past on issues that have cost this country phenomenal amounts of money. How much did the poll tax and all the policies that went with it cost this country? What about Black Wednesday in 1992, when we had to withdraw from the exchange rate mechanism? How much did that cost? How much gold did we sell on that day? We had no inquiry and we will never know. The same is true of BSE.
There have been exhaustive inquiries on the Dome from a range of standpoints. Enough has been done. We should be seeking to encourage more people to go there and raise the visitor numbers. Happily, during the past few weeks the numbers going to the Dome have gone up significantly. If there is a fall-off in the autumn, I suggest that we might see what would have happened if the Dome had been open free of charge, in the same way as the Tate Modern is. Perhaps we could open it free of charge in November and December and see what the response is. We could learn some lessons from that. The French have not charged people for a variety of attractions to celebrate the millennium. There is often a case to be made for public service enterprises being offered for free. Perhaps my noble friend the Minister will respond to that.
I repeat: no further inquiry, thank you very much indeed.
8.8 p.m.
Lord Baker of Dorking: My Lords, I am grateful to my old friend, the noble Lord, Lord Lamont, for giving us an occasion to debate the Dome once again. It is a scandal that there is so little to show for £750 million of expenditure. It is a tragedy that there is no lasting legacy commensurate with the lasting legacy of 1851, which left us the South Kensington museum complex, the Albert Hall and the Albert Memorial. Successive generations have benefited enormously from that lasting legacy. I do not see such a lasting legacy from the Dome and that peninsula.
The tragedy arises from a confusion of objectives from the start. Michael Heseltine sold the idea and really believed that it was going to be a souped-up trade fair with lots of electronic wizardry. That was very much the concept and he persuaded industrialists to support it on that basis. Others, like the noble Baroness, looked on it as a measure for environmental recovery.
I remember, when I was environment Secretary, sponsoring two garden festivals to recover polluted land. One was in the city of Stoke, with the great works
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there. The second was in South Wales. I must say to the noble Baroness that we spent not £750 million but about £20 million on recovering polluted land and building a lot of social housing on that recovered land. So I am saying that the amount of money that was spent is disproportionate to the benefits which will arise.
That confusion of purpose was intensified when Peter Mandelson came on the scene because he clearly wanted a pleasureDome. He wanted a souped-up Xanadu. That was until he went to Disneyland and realised that it takes three years to build a ride. That just could not be done in the time-scale and no one would put in that sort of investment for something which would exist for only a year.
Today we have the culture Secretary, Chris Smith, appearing before the Select Committee—I believe that the noble and learned Lord also appeared before it—saying that he was always against it and strongly opposed it. Such frankness could well lead to his imminent departure from the counsels of our nation.
But once again there has been confusion and difficulty at the very heart of government over this matter. There was some of that also in the Conservative Party. The trail goes back quite a long way. I do not deny that.
As a result, a committee of enlightenment was set up. Simon Jenkins, Michael Grade, Sam Chisholm from Sky, and Alan Yentob from the BBC were summoned to it. That committee was to devise what was to go into the Dome. It is not surprising that such a committee identified the intellectual emptiness at the centre of the Dome. There is a vacuum there. Therefore, it is not surprising that one has ended up with a vacuity surrounded by frivolous and shallow diversions.
Perhaps the greatest example of that is the Zone of British Identity. One would have thought that the Government would know what the British identity was. We had "Cool Britannia", a warmer version and then no Britannia. But they could not identify the British identity. So what did they do? They held a public opinion poll with focus groups asking people, "What is the British identity?"
Fortunately, the only person who never listened to those focus groups was Gerald Scarfe. I visited the Dome and I really tried to like it. The wonderful models by Gerald Scarfe were the best part of it. But they were totally unacceptable to the views of this Government. They were absolutely brilliant. They are the enduring elements of what I saw under the Dome.
I have had some dealings with the Dome because I am the chairman of the Museum of British History. Our objective is to build a museum in the centre of London which will tell the whole history of our country from Roman times to today—a very modern museum. We are still pursuing that objective. So I approached Jennie Page and the committee looking into all this and I said, "Don't you want to celebrate a little of our past 1,000 years?" because we should be proud of those thousand years. Never again in our history shall we have such an influence upon the

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history of the world and the development of the human race than we have had in the past 1,000 years. Over the past 1,000 years we have given to the world the English language, the elements of democracy, the rule of law, the industrial revolution and tremendous inventions which have helped people, such as penicillin and DNA.
I thought that the Government would want to celebrate some of that. But no, my friends and officials went to a meeting and they were told very simply that a decree had come out from Caesar Augustus: no history under the Dome. We were told that there should be no history. The Government wanted nothing to do with the past. That is typical of them.
The Prime Minister has treated his own party in that way by cutting off the roots and he is now quite happy to extend that treatment to the rest of the nation and not worry about the past. The world started in May 1997. The Government are the victim of their own rhetoric in these matters.
As I have said before, this is a Government of adjectives. They are full of promise and low on performance. As regards the Prime Minister, it was all gong but no dinner. That was the real problem from the start. The Government had no real idea of what they were trying to achieve.
It is amazing that in the course of the past two or three days, some who are more natural supporters of the Labour Party than of the Conservative Party have expressed so explicitly their contempt for the Government's attitude, not only to the Dome but to culture in general. VS Naipaul, who is no Conservative by any stretch of the imagination, yesterday described the Prime Minister as a cultural vandal. Today, Doris Lessing referred to the very philistine nature of this Government. Being a Conservative, those are words which I should hesitate to use against this Government. But they strike home.
The Dome has cost £750 million, £600 million of which was public money. Hospitals have been mentioned. The Government are launching a new type of school, city academies based on the city technology colleges which I launched in 1986. They hope to establish 500 of them. The Dome money could have been used to establish those 500 city academies. Would not that have been a better lasting legacy by which to remember the millennium? Would not that have been a better legacy to deal with the problems of our inner cities rather than having that extravagant and frivolous waste of money?
8.17 p.m.
Lord Davies of Oldham: My Lords, it is customary on these occasions to thank the noble Lord who introduced the debate and I do so because we have had a very interesting debate thus far. But there is one aspect in relation to which I regret this debate. I feel that it is yet another of that drip-feed of constant criticism and nagging about the Dome during a period when we are not talking in retrospect about its past; we are talking about its working present, when we are still seeking to ensure that as many of our fellow citizens
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and others can benefit from the investment which our country has made in the Dome. And yet here we are again lamenting the fact that it exists. That surely cannot be good for the development of its work; nor does it do anything except to indicate the price that we have paid for the disasters at Stratford among opinion-formers on that fatal evening, 31st December last year.
The noble Lord, Lord Baker, indicated that there is no history in the Dome. But there is an obvious question. Could it have been the case that Britain would not mark the millennium with a significant project? On one site we could have built 30 hospitals and on another the 500 city academies, or whatever. But would that really have marked the millennium? Of course, those are desirable projects. But we all know that when it came to the question of marking the millennium something distinctive had to be created which represented a looking forward towards the future, towards the new millennium.
In some respects, the Dome fulfils that position admirably: first, in terms of its architecture. Is it conceivable that the Britain of my noble friend Lord Rogers and the noble Lord, Lord Foster, in an age of significant architectural achievement would make no effort to construct a building of significance in this year? The Dome is exceedingly attractive. I regret the decision not to leave it open in the evening late enough for people to appreciate just how beautiful it is at night, because there is no doubt at all that one of the advantages of visiting the Dome in the winter months has been to see it in its full glory. From October onwards, I look forward to that being possible.
As regards the question of cost, do noble Lords opposite suggest that the grand projects of the Eiffel Tower in Paris or the Sydney Opera House were not beset by complaints about the costs involved? Of course they were. But are those buildings now looked upon as great extravagances and a waste of money because there were critics at the time who regarded that as the appropriate way to respond?
I was one who had hoped that the millennium project would be sited in the Midlands, which would have been convenient for the towns that I represented in the north-west. I believed that there were good arguments for increasing participatory attendance from that dimension.
However, I recognise that siting the Dome at Greenwich has provided a tremendous opportunity for regeneration of one of the poorest boroughs in the country. We should look upon it as a permanent development and an improvement of an area which in many respects was a declining and a depressed area of London.
We all recognise that the Dome was seen as the acceleration of the Tube extension project. Over the years people have returned from abroad and commented on Tube systems elsewhere, particularly the 50 year-old Moscow metro. They have talked about their glories compared with the poor London Transport extensions and architecture. I delight in the

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fact that we have a stretch of the Tube system that is truly an outstanding architectural achievement and brings credit to the country.
I also appreciate the decision to prevent access to the Dome by car, which I understand has caused difficulties for some. I believe that that is a step towards the future. With the congestion that we can all see in terms of private transport, we must accustom ourselves to investment in public transport. If people are to enjoy themselves in our cities, they have to be able to use public transport, as I believe that they do increasingly.
One inescapable fact that critics of the Dome cannot deny is the overall approval rating of its visitors. A figure of 85 per cent is an approval rating in which most entertainments would delight. I believe that there is an element of intellectual snobbery associated with this issue. There is a sector of London's patrician class that feels that if the Dome does not sell a message that reads well in the Spectator, somehow it falls short of expectations and desires.
The Dome is meant to be for mass participation. The whole of our nation is meant to benefit from the Dome. Already millions have attended and we expect many more. We recognise that there is over-hype with regard to the original expectations of attendance. Surely the point is that the vast majority of our fellow citizens who visit the Dome show that approval and in those terms the Dome is successful. Intellectually it is vastly superior to the only project that remotely matches it in terms of attendance, namely Disney, which is entertainment and does not have the intellectual dimension of the Dome.
I visited the Dome with people from Oldham and large numbers of schoolchildren from Oldham. As the noble Lord, Lord Baker, indicated, some areas are less stimulating than others. Of course, there was criticism, but sufficient numbers of visitors had sufficient entertainment and stimulation in the Dome to make the whole day a great success. That is the story of this project. I believe that by talking it down we do the nation a disservice.
8.23 p.m.
Baroness Anelay of St Johns: My Lords, I thank my noble friend Lord Lamont for giving me my first opportunity to debate the issues surrounding the Millennium Dome. I am sure that all noble Lords would agree that it was important for the Dome to succeed. That was important for tourism, for the regeneration of the Greenwich Peninsula as a whole, and for the reputation of this country. There is nothing wrong with the original concept, but I take note of what my noble friend Lord Baker said, that he is disappointed with the content.
I, with my husband, have visited the Dome as a paying customer. I have always encouraged others to visit it; those whom I have encouraged have remained my friends. Whatever they thought of their visit, they are still talking to me. I believe that one should encourage others to go there and make up their own minds about it. I do not need sheep to bleat at me to tell me that much.
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The debate initiated by my noble friend is not about consumer surveys; it is not about opinion polls. It is about the proper matter of the financial control and corporate management of the project, and whether they have been exercised in the right way having regard to the public. Many millions of the public's money have been expended on it.
Over the past three years my concern has been that the finances of the Dome have been marked by a lack of transparency. It may be completely unintentional but, at times, what has being going on has left me mystified. The noble Baroness, Lady Dean, referred to the vast number of questions that have been asked. I shall carry on asking, because sometimes the answers are so vague that one has to continue to draw teeth.
In relation to some of the confusion surrounding I he figures, noble Lords have quoted the amount of the millennium grant. The noble and learned Lord., Lord Falconer, told us on 2nd November last year in this House, that the Millennium Commission grant was £399 million. That is fine. He said that there was not a penny of overspend in relation to that. This week the Minister for Tourism in another place, Mrs Anderson, in a Written Answer, said that the Millennium Commission grant is £525 million. That does not appear to square with the extra drawdowns, loans, grants and whatever that have been made between November and now, so I am confused.
If we take this week's figure of £525 million as a grant, what happens to what we were told about loans along the way? If there is a loan, will it all be repaid? How much will be repaid? How much will go to English Partnerships and how much will go hack to the Millennium Commission? As my noble friend Lord Lamont said earlier, the amount that will go to English Partnerships will determine whether taxpayers will, in the end, pay something towards the running of the Dome. If English Partnerships does not receive its full due, in some way the taxpayers will subsidise the Dome peninsula as a whole.
If the Millennium Commission does not receive its full due, in the long term the New Opportunities Fund will be the loser. Of course, I accept that current projects do not lose out, but there has to be the possibility that future applicants which may have expected to benefit will not. In other words, who do the Government intend to be the losers, the taxpayers or the New Opportunities Fund, or both?
Recently there has been concern about the extent of political intervention. My noble friend Lord Lamont mentioned the issue of a million free tickets for school children. I am the last person to say that children should not receive free tickets to visit something like the Dome as a millennium experience. But I am the first person, as someone who talks to the tourism industry, to say that if a political decision is to be taken to ask the NMEC to give out a million free tickets, that should be part of the business plan.
So I ask the Minister what impact assessment did the Government make of the impact on the Dome's finances before they made that request to NMEC? Did they make that impact assessment fully known to

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NMEC before they asked it to do that? I ask that because, when Jennie Page gave evidence to the Select Committee in another place, she made the point to the Government that if one million free places were given away that that would impact on costs. Subsequently, she said that it blew about a £40 million hole in the Dome's finances.
What is the Minister's estimate? This morning in the Select Committee, I believe he referred—I stress, if the report is correct—to a £41 million revenue contingency fund that was used to pay for that political decision. Can he tell the House how much of that £41 million contingency fund was used to subsidise the results of giving a million free entries to school children?
My noble friend is also right to point out that when M Gerbeau was appointed in February as the new chief executive, the Government told him—as M Gerbeau told us at the weekend—that,
"this thing is on budget".
Yet two months later, after looking into the figures, he found that they were £26 million adrift and had to make another application for a grant.
My noble friend has asked questions with regard to the National Audit Office and its investigation into the £29 million grant. The investigation kicked in as a result of a letter of direction being issued. I would be interested to know if the NAO is also dealing with previous grants and loans made to NMEC.
These are all serious questions that deserve an answer. This is the first time a request has been made for a committee of inquiry to be set up. In view of the confusing and confused answers that have come from the Government over the past year, I am not at all surprised that my noble friend has asked for that.
8.30 p.m.
The Minister of State, Cabinet Office (Lord Falconer of Thoroton): My Lords, I join noble Lords in thanking the noble Lord, Lord Lamont, for raising this matter and giving us an opportunity to debate the Dome, and I thank noble Lords who participated in this short but interesting debate. I thank the noble Lord, Lord Lamont, also for writing to me and giving me advance warning of the questions that he intended asking at the end of his speech, for which I am grateful.
To put the debate in context, perhaps I may say that the period of the Dome's life has been a period during which it has encountered storms and difficulties. All those who have been involved with the Dome throughout the whole of its life have made mistakes. In a project of this size, complexity and uniqueness, it would be inconceivable for that not to be so. The noble Lord, Lord Clement-Jones, put his finger on it when he referred to similar projects and said that it was inevitable with a new and unique project that people would think one thing and then change their mind and think another.
But the Dome project has also achieved a lot. Since it opened on 1st January 2000 it has received over 3 million visitors, of which 2.7 million were paying
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visitors. The noble Lord, Lord Lamont, was wrong when he suggested that the reason the visitor numbers are keeping up is that so many school children attend free. Those 2.7 million paid. They came not because they were offered a free place but, like so many noble Lords who spoke in the debate today, because they wanted to come.
The Dome has consistently received high visitor satisfaction ratings. The figures speak for themselves. Independent polling consistently revealed that 85 per cent of visitors were satisfied with their visits; 91 per cent rated the customer service as excellent and nearly four out of five said that they would recommend the Dome to their friends. I am genuinely sorry that the noble Lord, Lord Baker of Dorking, is one of the 15 per cent who did not enjoy it, and genuinely glad that the noble Baroness, Lady Anelay, recommends it to her friends.
Baroness Anelay of St Johns: My Lords, I would not like to be misrepresented. I made it clear that I always ask people to go with an open mind and to make up their own mind. I do not encourage them to go as such or give them a recommendation. I do precisely what the Government want us to do; that is, I never comment on individual zones but leave my friends to make up their own minds.
Lord Falconer of Thoroton: My Lords, that was a courageous intervention by the noble Baroness. In evidence before the Select Committee, Peter Middleton of Namura described what the Dome had accomplished so far as, "a tremendous achievement". Many of the storms that have eddied around the head of the Dome spring from the original estimate of visitor numbers given in the business plan which was prepared under the previous government. That plan estimated 12 million visitors. We were not on the way to reaching that figure and by May it was apparent that a major reduction in the estimate was required. That resulted in the revised budget on which the Dome company is now operating. That budget is based on four months' trading.
The noble Lord, Lord Lamont, asked for realism. We have now got a budget based on the actual trading experience, something we could not have had before. As the noble Lord, Lord Clement-Jones, said, when we have something as unique and innovative as this, it is difficult to judge how many people will come. It is possible to indulge in an orgy of hindsight, in the way the noble Lord, Lord Baker of Dorking, did. But one must make judgments and be brave about those judgments in order for a project like this to occur.
My hope is that the original estimate being wrong will not overshadow what has been achieved. The Dome is now the most popular pay-to-visit attraction in the United Kingdom. It has high customer satisfaction figures and is the fifth most popular pay-to-visit attraction in the world. As my noble friend Lady Dean said, we must also remember that the Dome is about much more than the creation of a successful visitor attraction in Greenwich.

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When the Millennium Commission chose Greenwich as the site for the Dome, it did so in part because of the regeneration factor that it brought. Locating the Millennium Experience on the Greenwich Peninsula has been a key decision that has helped regenerate a derelict and contaminated site that had lain idle for more than 20 years in the fifth poorest borough in the whole of England. English Partnerships transformed that site into an area that has already begun to flourish with a variety of new developments, including the Dome, innovative community facilities and fresh ideas which are creating an exciting new urban quarter for London.
In evidence to the Select Committee last month, a representative of Greenwich council estimated that the number of jobs which would be created by the Millennium Experience would be in excess of 30,000. As has been mentioned in the debate, the Legacy Competition is now in its last stages and will provide a permanent future for the Dome. There is a short list of two strong bidders who came from a long list of 70. That is indicative of the fact that the market believes that there is a real opportunity in relation to the Dome.
It has been a stormy road and I am sure that the storms will continue. Indeed, as there have been difficulties, so we see the likes of the noble Baroness, Lady Anelay, standing up painfully and making sure that nobody could now associate her with the Dome, contrary to her position previously. But I believe that the prize of a successful exhibition for the year, a permanent legacy and a regenerated Thames Gateway is attainable and worth fighting for. I believe that in time the project will be judged a success, just as it is judged a success by 85 per cent of the people who visit it.
Perhaps I can deal with the points made by noble Lords in the course of the debate. First, the accountability and public inquiry issue raised by the noble Lord, Lord Lamont, has in a sense already been answered. It is dealt with by parliamentary accountability. Since May 1997 over 1,100 parliamentary Questions have been answered; there have been five inquiries into the Millennium Dome by the Select Committee in another place; this is the third debate in this House and there have been another two debates in the other place. The National Audit Office is also looking into various aspects of the Dome. It was always envisaged that we would investigate expenditure of public money, which should be completely accountable, by the procedures of Parliament. I have no reason to believe that they are not working.
The next question the noble Lord, Lord Lamont, asked was what, on reflection, I felt had gone wrong with the project. For all the reasons I put forward, I believe that the project will be judged a success. The problem relates to the original visitor estimate of 12 million. Around that hinges many of the controversies surrounding the Dome. Although that was a wrong estimate, it should not detract from what the Dome has achieved.
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The noble Lord asked also whether the shortfall in commercial income, originally put at £194 million, is now fully covered by the loans that have already been made by the Millennium Commission. I can put the position shortly. The 1998 corporate plan figure for commercial income was £194 million. That included a £25 million contingency. The June 2000 business plan, which is the current business plan, estimates £86 million based on trading performance and a projected total of 6 million paying visitors. That figure contains no contingency. Therefore, the loss in commercial income, if one ignores the contingency, is £83 million. That money is covered by an additional Millennium Commission grant, cost savings and legacy proceeds, so it still balances at £758 million.
The noble Lord's third question was whether I could guarantee that there will be no finance of any kind put into the Millennium Dome by the back door. I understood that question to be associated with question five; namely, whether I could guarantee that money that might have gone to English Partnerships will not be used to subsidise the Dome. There is competition at present to buy the Dome and there are two short-listed bidders. Once a bid is accepted, a division of the proceeds will take place reflecting the contribution of English Partnerships, which owns the land, and the Dome company to the joint venture representing that which has been purchased by the bidder. That will be done on an objective assessment of how the proceeds should be divided.
The noble Lord's fourth question was whether I could guarantee that the loans from the Millennium Commission will be repaid. The position in relation to the amount of money provided by the Millennium Commission is as follows. There was a £399 million grant that was not envisaged to be repaid. In addition, there was a £50 million cash flow facility, with an additional £89 million being made available of which it is envisaged £13 million will be repaid. That makes a total sum of grant from the Millennium Commission of £525 million.
I believe that I have answered specifically all he questions asked by the noble Lord, Lord Lamont. I do not have time to answer all the other questions raised during the debate. But, as regards any specific question raised, I shall write to noble Lords in response.

Regulation of Investigatory Powers Bull
8.41 p.m.
Consideration of amendments on Report resumed on Clause 13.
Viscount Astor Viscount Astor moved Amendment No. 19:
Page 15, line 16, leave out ("an appropriate") and insert ("a fair").
The noble Viscount said: My Lords, this amendment and Amendment No. 20 were grouped with Amendment No. 18 with which, as the Minister may remember, we managed to scrape a lucky vote. Therefore, I beg to move.
On Question, amendment agreed to.
Viscount Astor Viscount Astor moved Amendment No. 20:
Page 15, line 32, leave out ("appropriate") and insert ("fair").
On Question, amendment agreed to.
[Amendment No. 20A not moved.]
Clause 14 [General safeguards]:
Lord Bach Lord Bach moved Amendment No. 21:
Page 16, line 30, at end insert—
("( ) The arrangements for the time being in force under this section for securing that the requirements of subsection (2) are satisfied in relation to the intercepted material or any related communications data must include such arrangements as the Secretary of State considers necessary for securing that every copy of the material or data that is made is stored, for so long as it is retained, in a secure manner.").
The noble Lord said: My Lords, on behalf of my noble friend Lord Bassam, I move Amendment No. 21. The noble Lord, Lord Phillips of Sudbury, raised in Committee the question of material that is lost or stolen. He expressed the view that such material would not be disclosed or otherwise made available and may, therefore, be outside the scope of Clause 14(2).
We have reflected on the helpful points that the noble Lord made, and now put forward this amendment in the hope that an explicit requirement to store intercepted material and data securely will reassure those who are concerned that it might otherwise not be so stored. I should add that the storage and handling of intercepted material already involves the highest levels of physical, technical and personnel security. None the less, I hope that this amendment will be welcomed by the noble Lord. I beg to move.
Lord Phillips of Sudbury: My Lords, I am grateful to the noble Lord for what he said and am most content with the outcome of our discussions.
Viscount Astor: My Lords, we, too, welcome the amendment and thank the noble Lord for introducing it.
On Question, amendment agreed to.
Clause 15 [Extra safeguards in the case of certificated warrants]:
Lord Phillips of Sudbury Lord Phillips of Sudbury moved Amendment No. 22:
Page 17, line 19, after ("is") insert ("in an external communication and is").
The noble Lord said: My Lords, I have the dubious pleasure of moving this amendment. It follows one put forward in Committee. I should like to thank the noble Lord, Lord Bassam of Brighton, for the letter that he wrote to me on 4th July in response to the questions I raised on 19th June. I have to say that the letter is extremely clear—at least, as clear as it reasonably can be—and helpful in terms of the specific questions that were raised on that occasion.
The amendment before the House tonight seeks simply to insert the words, "in an external communication" into Clause 15, which, itself, provides extra safeguards in the case of certificated warrants under Clause 8. The latter allow—and allow only—general trawling for communications data of different kinds for external communications. I suspect that we are dealing here with the central passage of the Bill as regards public concerns. The extent to which any government and agencies serving under the state can utilise the powers under this Bill, especially vis-a-vis warrants under Clause 5 onwards, continues to give a great deal of angst.
I should point out at once that this amendment is still in the nature of a probing amendment. I would apologise for that were it not for the fact that we are all grappling and groping to some extent with some of the more complex parts of this measure. Indeed, when taken in conjunction with all the other clauses to which it relates, I suggest that there is no more complex clause than Clause 15.
Certificated warrants, which I call "trawl warrants", are to be applied only, as I said, to external communications. The reason being that one must differentiate between the use of targeted interception warrants for domestic policing—analogous one might think to letter opening—and the use of trawling or mass-surveillance warrants used for intelligence and national security purposes which, for some, has Orwellian implications.
Depending on the nature of the communication link intercepted, it will be extraordinarily difficult, if not impossible, to capture simply external communications. If one takes, for example, a trunk under-sea cable or microwave beam that physically leaves the United Kingdom and is intercepted somewhere under the ocean, there is no way that one can catch in one's net external communications only; indeed, we would say that one is bound—or almost bound—to catch with it internal communications that are supposed to be proof against the trawling procedure under all circumstances. That is the basis upon which the anxiety persists. As I said, the amendment is a probing one. After hearing the Minister's response, it may be necessary to have further meetings to explore matters further.
So we are talking about lawfully examining internal communications "captured" by a trawl of this kind, which will produce mixed-up, bulk information. The noble and learned Lord, Lord Lloyd, referred to the problem—it is not a new one—in his first Interception Commissioner's report. He sanctioned a non-statutory innovation that he considered would lawfully permit, first, the examination of that inadvertently captured internal material; and, secondly, the trawling for purposes broader than antiterrorism. Anti-terrorism trawls are the one exception to the rule that there shall not be trawling for internal communications. In that second category one would be trawling for purposes which include national security, serious crime and economic well-being, as listed in the Bill. The noble and learned Lord, Lord Lloyd, christened that mechanism an "overlapping

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warrant", by which he meant an ordinary, non-certificated warrant which names the addresses or premises targeted with the interception—which is what is required—and allows the interception of any communications, internal or external, from those addresses.
There appears, however, to be what might be called a cart before the horse problem concerning the broader trawling. The question is: how can an overlapping warrant specify addresses, as are required by Clause 8 of the Bill, until those addresses have been identified by the broad trawl which is prevented by the Bill? That, of course, creates the paradox that you have to do that which is not permitted in order to do that which may be permitted. That is an unresolved problem whereby the practice of using these overlapping warrants is utilised.
The construction and meaning of Clause 15(3) in particular is, I suggest, still obscure to the House, certainly to these Benches. It seems to create a wholly new kind of certificate which one might call an "override certificate" that can be attached—admittedly for a three-month period only—to a certificated warrant: that is to say, one certificated under Clause 8. The effect of such an override certificate is in practice to sanction a trawl through bulk captured material obtained through a Clause 8 certificated warrant allowing search for an entity—the relevant words in the Bill are "referable to"—or a person inside the United Kingdom for the purposes of national security, serious crime, economic well-being and anti-terrorism.
I refer to future overlapping warrant procedures. It appears from the letter of the noble Lord, Lord Bassam, that they are to continue. The letter states:
"There will he cases in which a warrant complying with Clause 8(1) cannot be put into effect in any other way, for example, when a person in the United Kingdom chooses, perhaps in an attempt to avoid interception, to use a foreign Internet service provider".
As I say, the totality of that remains obscure to us.
However, would it be correct to interpret what the Minister wrote and what is in the Bill as the following? If a target of the security or intelligence services is using a foreign Internet service provider, that Internet service provider, being foreign, cannot be served with an interception warrant but the target's communications within the United Kingdom may still be picked up by GCHQ bulk trawling, for example, on the under-sea cable. In that case, an e-mail sent by the target to a person within the United Kingdom would still he an internal communication, even though routed via a foreign ISP. The Minister made it clear in his letter that a UK-to-UK transmission via foreign parts was none the less still an internal communication. If I am correct, that would tend to fall outside the scope of a Clause 8(4) warrant which is limited to external communications. That overlapping warrant would still be required in such a case. I apologise if this is complex and difficult to follow but I am afraid that is the nature of the case.
Even if that is the case, several problems remain. First, would it not be better to put overlapping warrants on a clear statutory basis—the Minister's
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letter makes it clear that those are to continue—and legitimise them on the face of the Bill? The Government may argue that, assuming overlapping warrants are lawful, there is no extension of the purposes for which the trawling of internal communications may be effectively accomplished under the Clause 15(3) procedure. However, we believe that acceptance of Clause 15(3) unamended creates statute law which broadens the allowable purposes within the Bill—which are confined to anti-terrorism—for internal trawling.
It is possible that overlapping warrants can lawfully be used for some kinds of internal trawling but not others, depending on interpretations of the key words, "address", "premises", "factors" and "referable to". All this is totally opaque at present. If Clause 15(3) represents either a practical or legal extension of powers, in future it will be and remain solely for the interceptions communications commissioner to ensure fair play.
I believe that these problems are compounded by the intention confirmed in the letter of the noble Lord, Lord Bassam, that in future under the Bill certificated warrants may be served on Internet service providers rather than just on telephone companies. I should like to know whether that is correct. If bulk collection from Internet service providers' networks is undertaken, the captured traffic will be a completely mixed trawl of internal and external communications which it will be possible to separate only by reading the whole catch.
If the Government do not wish to accept the amendment, which seeks to put plainly on the lace of the Bill limits and safeguards—I anticipate that the Government will face difficulties in accepting it—is there any way in which the anxieties of firms, individuals and charities can be assuaged in terms of the oversight of these mixed catches of internal and external communications? The Minister may say that the interceptions commissioner has the power and duty to ensure that there is fair play in that regard. However, the anxiety at the extent to which the Bill constitutes a Trojan horse into confidential information which should remain confidential is at its most acute over that measure. We see the problem that in a trawl you cannot select only Dover sole. However, on the other hand, how do you guard against the information which you are not seeking to collect being scrutinised by those who ought not to scrutinise it and, worse still, utilised for purposes wholly outside the ambit and intention of this part of the Bill? I apologise for my discursive and, I suspect, unfollowable attempt to explain the amendment. However, I have done the best that I can. I beg to move.
9 p.m.
Lord Cope of Berkeley: My Lords, the explanation of the amendment was slightly lengthy but, I think, absolutely necessary. It is a hideously complicated provision. It is difficult to understand how we got into the position we are now in, let alone how it is proposed to develop it in the future and in particular through this Bill.

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My underlying assumption is that the distinction between internal and external communications goes back to the days when people were primarily concerned about spying. It was quite all right then to have a powerful scrutiny of external communications because they might contain spying items, whereas with internal communications we were spying on our own people, which was not done—or, at least, done to a much lesser degree. That subsequently became extended so that we could spy on our own people for counter-terrorist purposes because we are all against terrorists and terrorism is a growing threat. I do not mean that idly—it is quite true—but one can see how, historically, we have got to the position where external communications can be much more thoroughly scrutinised, and communications being examined for anti-terrorist purposes can be much more thoroughly scrutinised, than ordinary internal communications. There is a considerable acceptance that this is the rationale behind it.
But now, of course, we live in a different age—an age when it is possible to trawl over vast numbers of communications exceptionally easily for key words, for addresses, for people's names and so on. The power of computers is basically such that it enables us to do this. There must be a great temptation, a great desire, on the part of those whose job it is to catch criminals—whom we all support—to use these powerful mechanisms for the purposes we all want to see.
But, at the same time, we do not want to reach a position where people are being monitored all the time. It is 16 years since 1984; the book of that name was obviously written a good while before that, but it gives an insight as to how things might be if governments are allowed to monitor our lives too much.
The first question arising out of these provisions, and the one to which the amendment draws attention, is whether it is regarded by the Home Office as lawful to use overlapping warrants. It seems to be accepted that they have no statutory basis; on the other hand, they seem to have an excellent legal pedigree in the form of, among others, the noble and learned Lord, Lord Lloyd. I assume that the answer is, yes, they are regarded as lawful at the moment.
But, on the face of it, as the noble Lord, Lord Phillips, said, this part of the Bill represents an extension of the powers beyond what they are at the moment, either statutorily or non-statutorily. Is that the Government's intention? Are the Government attempting by the phrases used in the Bill to extend the powers beyond what they are now and not only to extend them to different forms of communications—to e-mail and so on—but to extend them in nature beyond what they are now? What is the intention of this?
I do not think that anyone would object to the powers being extended from what they are now—even if it is legally a bit uncertain—to cover different forms of communications such as e-mail and so on, but we would be concerned at a different level if the Government were setting out to extend the powers
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beyond those currently available for telephones and more conventional means of communications. That is the importance of this.
I am not entirely convinced that the amendment is necessary. The Bill is so complicated that it is difficult to be sure whether trawling is intended by the Bill to be confined to the same things that it is confined to now for telephones and so on. If not, at the very least we should be told. We should then give consideration to whether that is what we want to do and whether Parliament is prepared to give that authorisation to the agencies which do such sterling work on our behalf.
Lord Lucas: My Lords, I have enjoyed listening to the contributions from the Opposition Front Benches. Both noble Lords seemed to be striving extremely hard to give the Government the benefit of the doubt and to find some way in which what is written plainly and clearly in the Bill should not be true. It is absolutely obvious what is in the Bill—at least it is to me—and that is, yes, trawling becomes legal. The Home Secretary has to renew the warrant every three months, but he can trawl on grounds of economic well-being and serious crime, as well as terrorism, to any extent that he wishes.
I do not think that this particular Home Secretary is going to go after a police state in a big way, but we can be certain that we are going to go after the people who start the riots in the City and the football hooligans. That is exactly what the clause permits. It is absolutely obvious that the economic well-being of the UK is affected by both groups. We have lost the ability to stage a major football tournament because of football hooliganism, and the economic well-being of the UK is affected. The reputation of the City suffers from these annual riots, and the economic well-being of the UK is affected. Under those conditions the Secretary of State can go trawling for any group of people that he chooses as long as such a group is reasonably rationally coherent—and certainly the people indulging in both those activities must come under that category. Under this Bill we have the ability to trawl in any way at all as long as it is referable to that kind of thing.
If this is not what the Government intend, I have got the wording wrong. But as they have defended the wording through quite a long parliamentary process, one has to assume that that is what they mean to do. Sometimes this Government do things they do not mean to do—I do not suppose they meant to get Mr Livingstone as mayor of London—but this is an occasion when what they are doing and what they are intending to do must surely coincide.
Lord Bassam of Brighton: My Lords, all noble Lords who have spoken in the debate have done so with great knowledge of the subject. At least they sound as though they have. I shall try from the Dispatch Box to equal that, though I am not sure I shall succeed. I should like to try to respond to the points raised in the debate. With due deference to the noble Lord, Lord Phillips, he asked a whole range of questions with which, frankly, had I managed to follow them in close

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text form, I would have struggled. Outside the arena of the House I shall undertake to look at Hansard, work through them with my officials and provide him with answers. He helpfully said that he saw this as a probing amendment. What I may be able to add to the debate will probably explain in plain terms what we are trying to do.
As we understand it, the amendment—I will be frank about this—would render unworkable the arrangements for interception and selection of external communications. It is just not possible to ensure that only external communications are intercepted. That is because modern communications are often routed in ways that are not all intuitively obvious. Noble Lords who have contributed to the debate understand that. An internal communication say, a message from London to Birmingham—may be handled on its journey by Internet service providers in, perhaps, two different countries outside the United Kingdom. We understand that. The communication might therefore be found on a link between those two foreign countries. Such a link should clearly be treated as external, yet it would contain at least this one internal communication. There is no way of filtering that out without intercepting the whole link, including the internal communication.
Even after interception, it may not be practicably possible to guarantee to filter out all internal messages. Messages may well be split into separate parts which are sent by different routes. Only some of these will contain the originator and the intended final recipient. Without this information it will not be possible to distinguish internal messages from external. In some cases it may not be possible even if this information is available. For example, a message between two foreign registered mobile phones, if both happened to be roaming in the UK, would be an internal communication, but there would be nothing in the message to indicate that.
It is still the intention that Clause 8(4) warrants should be aimed at external communications. Clause 8(5) limits such a warrant to authorising the interception of external communications together with whatever other conduct is necessary to achieve that external interception. Whenever such a warrant is signed, the Secretary of State must be convinced that the conduct it will authorise as a whole is proportionate—my favourite word—to the objects to be achieved. His decision to sign will be overseen by the interception of communications commissioner.
The next layer of protection is the certificate. Anything that is not within the terms of the certificate may be intercepted but cannot be read, looked at or listened to by any person. Beyond that are the safeguards set out in subsection (2) of Clause 15. Except in the special circumstances set out in later subsections, or if there is an "overlapping" Clause 8(1) warrant, selection may not use factors which are referable to an individual known to be for the time being in the British Islands.
Amendment No. 23 would extend the prohibition on selection by factors referable to individuals in the British Islands to cover also premises in the British
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Islands. It would occasionally have perverse consequences. For example, let us suppose that a foreign terrorist group was planning to blow up a prominent London building—say, the House of Lords. In the absence of any other leads, the agencies would no doubt be searching for any messages mentioning the House of Lords. But that would clearly be a selection factor referable to premises in the British Islands. It does not seem right for that, which would not involve intercepting any communications to or from the House, to need special authority.
As noble Lords can judge from that response, it is a very complex matter. Other points were raised in the debate. The noble Lord, Lord Cope, asked whether the intention is to extend the powers. The simple answer is from existing new communications, yes, but beyond that, certainly not, no. I hope that clarifies that point. The noble Lord, Lord Phillips, sought some reassurance for himself, and the public perhaps, about the commissioner's role. I can say that the commissioner has the responsibilities to which the noble Lord referred. That much is clear. The commissioner will also be anxious to reassure the public that his oversight of the matter has been both effective and thorough. He has to discharge his duties in those terms.
We would be very concerned if these amendments were passed. As I said at the outset, they would render the arrangements unworkable both for interception and the selection of external communications. They would provide a very difficult situation for those agencies that need to undertake that work. I urge noble Lords not to press their amendments. The noble Lord, Lord Phillips, said that he would perhaps like to have further discussions on these matters. I am certainly happy to facilitate that outside the Chamber. We view these matters very seriously indeed.
Lord Phillips of Sudbury: My Lords, I listened with great interest, as I am sure did other noble Lords, to what the Minister had to say. I accept that I cannot fairly expect the issues raised in the debate to be answered here and now in all particulars. I welcome the noble Lord's agreement to discussions outside the Chamber. In all the circumstances, it would be best to proceed by that route. I am therefore happy to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Cope of Berkeley Lord Cope of Berkeley had given notice of his intention to move Amendment No. 23:
Page 17, line 32, at end insert—
("or otherwise than according to a factor which is referable to premises in the British Islands").
The noble Lord said: My Lords, I omitted to refer to Amendment No. 23. It is grouped with Amendment No. 22. Fortunately, it did not matter because the Minister replied anyway to what I might have said.
[Amendment No. 23 not moved.]
9.15 p.m.
Lord Cope of Berkeley Lord Cope of Berkeley moved Amendment No. 24:
After Clause 18, insert the following new clause—

Regulation of Investigatory Powers Bull

  ADMISSIBILITY AS EVIDENCE IN COURT OF AN INTERCEPTED COMMUNICATION
  (" . Notwithstanding the provisions of sections 16, 17 and 18, nothing in this Chapter shall render admissible as evidence in court the contents of an intercepted communication in circumstances where the original communication would not itself have been admissible.").
  The noble Lord said: My Lords, with this amendment we move to a very different matter—the question of legal privilege. The Bar Council of England and Wales, through its Law Reform Committee, has looked at the Bill. It has produced an expert memorandum which contains some interesting points. The Law Reform Committee is concerned about the question of legal professional privilege. Even those who are not lawyers support the proposition of legal professional privilege. Lawyers and their clients are in a special position. If a client is to be properly defended, there must be legal privilege. I am sure that I do not differ from the Government in saying that we would want to preserve that in the new circumstances provided by the Bill.
  According to the advice I have from the memorandum, there seems to be an absence of protection for privilege. Clauses 16 and 17 do not address that issue. They appear to be derived from similar provisions in the Interception of Communications Act 1985. Even the Law Reform Committee of the Bar Council described them as,
  "poorly drafted, and difficult to understand".
  It suggests that they are probably aimed at preserving the secrecy of the fact that the interception of a communication has taken place. I support the idea that interception of communications—the way it has been done and the fact that it has been done—will often need to be preserved as a secret by the agencies indulging in it. However, Clause 17(1)(a) would appear to make the content of intercepted communications admissible in,
  "proceedings for a relevant offence",
  notwithstanding the fact that the original communication was the subject of legal professional privilege. If that is so—I rely on the committee of the Bar Council for this opinion—the state could intercept communications even between a solicitor or a barrister and his client and then use the contents of those intercepted communications at the client's trial as evidence against him. There does not appear to be an express saving for legal professional privilege. That is described in the memorandum as "an alarming omission" as it goes not just to the issue of privacy but also to the right to a fair trial and Article 6 of the European Convention on Human Rights.
  Information obtained by surreptitious means should not receive less protection than that which the original communication was entitled to. That is what led the committee of the Bar Council to suggest to me and to other noble Lords the insertion of the amendment into the Bill. I shall be interested to hear the Minister's response to this point. It was raised with me only recently. I nevertheless took the precaution of giving at least an indication to the Home Office of the seriousness of the matter, as it comes from an important source. I beg to move.
  Lord Grabiner: My Lords, the noble Lord, Lord Cope, understates his talents. He says that he is not a lawyer. However, I have always viewed the noble Lord as something of a closet lawyer. His legal talents are certainly evident on almost every occasion that he stands at the Dispatch Box.
  I do not think that the noble Lord said anything with which essentially I would disagree. The question is whether it is necessary to utilise this amendment in order to deal with the problem. The short point is, in essence, whether legal professional privilege would be implicit as a matter of common law. If the answer is that it would be, it would not be necessary to incorporate an express provision in the Bill to cover the problem. If, on the other hand, that is not the position, I would respectfully agree that it would be necessary to introduce an express clause to that effect.
  I must confess that I have not undertaken that research. However, my expectation would be that the common law would step in and that legal professional privilege would be implicit. If such material was sought to be adduced at trial, it would be objected to on precisely that ground, would not be admissible and would be excluded, regardless of the fact that no express provision to deal with it was contained in the statute. However, I suspect that the point should be examined carefully. We must be satisfied that that is the position before reaching a final decision on whether the amendment would be appropriate.
  Lord Phillips of Sudbury: My Lords, I concur with what has been said, save that this Bill is such a particular measure and has given rise—and will, I suspect, continue to give rise—to such widespread concern that it may be that, even if a common law entitlement to privilege does obtain, given some of the provisions, such as those contained in Clauses 51 and 52, it would be sensible to write it onto the face of the document.
  This measure, perhaps more than most, will be examined closely by foreign firms and foreign lawyers who may not be fully acquainted with the extent and grasp of our common law. I agree with the noble Lord, Lord Grabiner, that this needs to be looked at carefully. However, when the Law Society, the Bar Council and the professional body for Scotland all sing the same tune, there may be something in it. Indeed, a

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  whole series of later amendments address broadly the same point. It will be interesting to hear what the Government have to say by way of reassurance here.
  Lord Bach: My Lords, in Committee we debated at some length the justification for Clause 16, which keeps intercepted material out of legal proceedings. The noble Lord's amendment appears to bolster the effect of Clause 16 by saying that no intercepted communication is rendered admissible if the original communication would not have been admissible. We agree with the sentiment, but the Government hold the view that this amendment is unnecessary.
  First, nothing in Chapter I renders anything admissible in evidence. Except for Clauses 16 and 17, the Bill is not about evidence. Furthermore, Clauses 16 and 17 make interception inadmissible. Thus, anything that would otherwise be admissible remains admissible under the Bill—except intercept product and anything which would otherwise be inadmissible remains inadmissible under the Bill. For example, the Bill does not change the rules about hearsay, corroboration or similar fact evidence. However, I do not think that anyone is suggesting that that fact should be placed on the face of the Bill.
  The Bill does not re-write the rules of evidence. If something is inadmissible at common law because it is legally privileged that remains the case for all parts of the Bill. There is a separate question as to whether legally privileged material should be considered at all under any part of the Bill. That is something which we intend to address in the statutory codes of practice. The preliminary drafts, which have been placed on the Home Office website, deal with the subject only tentatively. We welcome comments on what the codes should say.
  Our starting point—I believe that this will attract the support of the House—is that proper communications between lawyer and client deserve proper protection from third parties, including the state. In normal circumstances it should be no part of the task of law enforcement to listen to lawyers' communications in order to find out about their clients. That principle must be balanced against other factors, such as the possibility of legal communications being listened to accidentally and that some lawyers may abuse their professional position. We want to get the balance right and to that end look forward to working with the Bar Council, the Law Society of Scotland and others.
  It is true that in rare cases, as described particularly in Clause 17(1), intercept material may be adduced in evidence; in other words, it is treated like any other intelligence product. However, that fact does not override the protection given by common law to legally privileged material. If it did so it would require an express provision in the Bill and there is no such provision. The Government are grateful to the noble Lord, Lord Cope, and others who have spoken in this debate. We hope that this response is of comfort both
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  to the noble Lord and to those who have been concerned to approach him with regard to this amendment.
  Lord Cope of Berkeley: My Lords, the noble Lord, Lord Grabiner, described me as a closet lawyer. I am not quite sure how to take it, but, coming as it does from such a distinguished lawyer, I regard it as an intended compliment. I tried to make clear in moving the amendment that in this particular instance I was merely a mouthpiece for lawyers and altogether a lower form of life, perhaps the noble Lord would believe, than even a closet lawyer.
  I pay careful attention to the speeches of both the noble Lord, Lord Grabiner, and the Minister, in particular their observations on the common law. I have the highest, if distant, respect for the common law and never cease to be amazed by it. I am again amazed this evening that the common law can extend to a Bill dealing with such a modern subject as this. Perhaps one should not be surprised by that. The Minister also stated—I paraphrase his response—that nothing in the Bill said that such material would be admissible which, by a series of double negatives, meant that the common law applied.
  The noble Lord also made the extremely helpful observation that a good deal of this matter would be addressed in the draft codes of practice and that the Bar Council and others could contribute to that discussion. I believe that that is the right way to carry forward the discussion. The Law Society of England and Wales and the Law Society of Scotland have also raised other questions about legal privilege but not, as far as I am concerned, the particular aspect of it dealt with in this clause. There is a way to discuss this further perhaps in more appropriate fora even than this. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  9.30 p.m.
  Clause 20 [Lawful acquisition and disclosure of communications data]:
  Lord Lucas Lord Lucas moved Amendment No. 25:
  Page 23, line 29, after second ("is") insert ("expressly").
  The noble Lord said: My Lords, this amendment just adds the word "expressly". It is really an excuse to draw from the Government some further information on the effects of Clause 21(3) and (4). I am not sure whether initially it would have been obvious to the Minister that that was the purpose of the amendment. I thought that Clause 21(3) was covering a situation where the police would consult BT's telephone directory reverse look-up facilities. But looking at the draft code, that appears to be wrong. At paragraph 9.4 it says that it will only come into effect when the,
  "telecommunications operator is not capable [when] accessing the data by a notice would not be possible [and] when it would be likely to prejudice the investigation".
  I have two sources of puzzlement in this confluence of the code and the Bill. First, I am extremely puzzled as to how an officer will be able to do anything which an ISP cannot. Are we breeding in secret a new breed of electronic policemen? How is it envisaged that such a thing will be possible?
  The second aspect I am concerned with is that the confluence of Clauses 20 and 21 would be that if an officer was sent out to collect such-and-such communication data, it would seem to allow him to indulge in any conduct which he felt was reasonable in order to obtain it. He might go to "James Bond" lengths of breaking in and burgling or whatever might amuse him. But he would be exempt from prosecution. His actions would be made legal by the terms of Clause 20. I suspect that I am failing to understand how the code and the Bill work together on this particular aspect. I look to the Minister for enlightenment, but I shall be prepared to accept that it might arrive tomorrow. I beg to move.
  Viscount Astor: My Lords, I was most intrigued by my noble friend's introduction of his amendment. As far as I was concerned, at least half of his speech was heavily encrypted. No doubt the Minister will be able to find the key, decrypt it and give an answer.
  Lord Bassam of Brighton: My Lords, the amendment was so heavily encrypted that the Minister is entirely puzzled. We had looked very closely at the noble Lord's amendment and decided that the addition of the word "expressly" would have no impact or effect at all. Therefore, the attempt of the noble Lord, Lord Lucas, to probe the confluence of meanings in Clauses 20 and 21 had entirely escaped us.
  The noble Lord was generous enough to say that perhaps we could provide him with an answer tomorrow. That is how I would like to leave it. On those terms, I ask him to withdraw his amendment. Perhaps in future he could be a little clearer as to what he wants to probe and where. We shall be more than happy to oblige.
  Lord Lucas: My Lords, this noble Lord is always very happy to be clear about what he is after, but it generally takes a little more time than he had on this occasion. I apologise to the Minister and to his officials for having caused them to hunt around needlessly for an explanation which would have eluded them in any case. I shall pass to the officials my notes on this amendment and perhaps we can reach some agreement at another time. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Lord Bassam of Brighton Lord Bassam of Brighton moved Amendment No. 26:
  Page 23, line 42, leave out ("address or other") and insert ("traffic").
  The noble Lord said: My Lords, this amendment and the others grouped with it were originally part of the first set of amendments under the original grouping. I have spoken to them in what I said during that debate. I beg to move.
  Lord Cope of Berkeley: My Lords, I agree with the Minister that the earlier debate on the definition of "traffic data" covers the point in the amendments. The wording is remarkably similar to the first few amendments we discussed today. By inserting the provisions in Chapter II, they do not have the same effect as in Chapter I. Indeed, in some senses it is the reverse effect. Nevertheless, it is a useful introduction into the Bill of the distinction between "traffic data" and "communications data" even though these amendments mix up the two. It is a useful change to the Bill which I and others appreciate.
  Lord Lucas: My Lords, I did not ask the Minister a follow-up question on the extent to which the web will be caught as traffic data. I understood the noble Lord to say that the query will end at the apparatus which contains within it the information on the web page which is sought. The traffic data will contain the identity of a box. It may be quite small, stored in racks of similar boxes in the premises of an ISP. The communications data will contain the physical address of that box. One will be able to deduce the premises the box occupies. From a knowledge of the web, one may be able to deduce either that that website occupies that box exclusively for its own use, that it is part of a much larger website, or that it is a box which stores a number of similar websites. It can be difficult to specify what is in that box. We are talking about an individual box, not simply the premises of an ISP. I shall not know simply that the communications data have gone into, for example, Demon's headquarters; I shall know which box we have accessed.
  With regard to my next amendment, it would help me if the Minister would tell me the level of detail regarding the identity of the end point of traffic data under the definition. Given the way ISPs operate, I am unable to satisfy myself as to how it will operate in practice.
  Lord Bassam of Brighton: My Lords, perhaps I did not make it plain when we discussed the issue earlier. The tailpiece of the new definition puts beyond doubt, I think, that in relation to Internet communications, traffic data stop at the apparatus within which files or programmes are stored. To clarify the noble Lord's point, traffic data may identify a server but not a website or page.
  On Question, amendment agreed to.
  Lord Bassam of Brighton Lord Bassam of Brighton moved Amendment No. 27:
  Page 24, line 11, leave out subsection (5).
  On Question, amendment agreed to.
  Lord Bassam of Brighton Lord Bassam of Brighton moved Amendment No. 28:
  Page 24, line 22, at end insert—
  ("(6A) In this section "traffic data", in relation to any communication, means—

  (a) any data identifying, or purporting to identify, any person, apparatus or location to or from which the communication is or may be transmitted,

  (b) any data identifying or selecting, or purporting to identify or select, apparatus through which, or by means of which, the communication is or may be transmitted,

  (c) any data comprising signals for the actuation of apparatus used for the purposes of a telecommunication system for effecting (in whole or in part) the transmission of any communication, and

  (d) any data identifying the data or other data as data comprised in or attached to a particular communication,

  but that expression includes data identifying a computer file or computer program access to which is obtained, or which is run, by means of the communication to the extent only that the file or program is identified by reference to the apparatus in which it is stored.").
  The noble Lord said: My Lords, I beg to move.
  [Amendment No. 29, as an amendment to Amendment No. 28, not moved.]
  On Question, Amendment No. 28 agreed to.
  Lord Lucas Lord Lucas moved Amendment No. 30:
  Page 24, line 22, at end insert—
  ("6A) Where the communications data in whole or in part comprises data as defined in section 20(4)(a) or (b), the designated person shall first obtain a certificate from—

  (a) any judge of the Crown Court or the High Court of Justiciary;

  (b) any sheriff;

  (c) any justice of the peace;

  (d) any resident magistrate in Northern Ireland; or

  (e) any person holding any such judicial office as entitles him to exercise the jurisdiction of a judge of the Crown Court or of a justice of the peace,

  stating that access to the communications data is necessary and proportionate having regard to the sworn statement of the designated person as to the circumstances of the matter.
  (6B) If the designated person reasonably believes that the special circumstances of the case are such that obtaining a certificate under subsection (6A) would cause an unacceptable delay to the issuing of a notice or authorisation under this section, the designated person may issue such notice or authorisation without obtaining a certificate but must then make a prompt report to the Interception of Communications Commissioner as to the circumstances of the matter.").
  The noble Lord said: My Lords, the amendment provides us with an opportunity to discuss the level of authorisation which should be appropriate for traffic data. We are trying to understand what the new definition implies as regards the knowledge which can be gleaned from communications data. In earlier debates, we agreed that location is included and that with modern and future mobile telephone systems it will he possible to track an individual who is carrying a mobile telephone in real time to an accuracy of about 10 metres from one's position in the UK.
  We have improved the limit as regards a person's wanderings on the web, but tracking down to an individual's box gives someone a good deal of
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  information. These days, a box might contain only 20 or 30 gigabytes of hard disk. That can easily be used in a reasonably complicated website. People at the low end, such as me, share servers, but the next step up, which comes quickly, is to co-locate. You put your own server in an ISP's premises, which will usually involve the box being identifiable. It will be possible to know that someone has visited a site and, given that a site is virtually homogeneous, it will be possible to know what someone has done. You will not be able to track a person inside the shop but you will be able to tell which shops in the street he has entered.
  That level of data about someone's life requires a reasonable level of protection. The amendment does not deal with the ordinary data, the reverse directory or the mass volume of requests for communications data which involve identifying the owner of a telephone number, or a website or an individual. It deals with a smaller number of requests for detailed information about a person. Given the increasing ability to identify what a person is up to from the data which will be available under this heading, we should look at a level of authorisation that goes beyond that of the average police superintendent because we shall have a multiplicity of agencies which can look at communications data. Given that we are not dealing with a high volume of cases, I have suggested that the standard recipe of a magistrate's warrant should be required.
  I am happy to listen to any suggestions put forward by other noble Lords or the Government. My basic point is that we should apply a higher test to such data than is applied to someone's telephone number. The data are wider and more private and personal than the data to which we are used to giving our average policeman access. We ought to take care of the citizens' liberty. I beg to move.
  Lord Phillips of Sudbury: My Lords, I want to identify myself with what has been said by the noble Lord, Lord Lucas. Unless the Government have a clear response to the issues, there is much to justify the amendment.
  Viscount Astor: My Lords, I associate myself with the comments of the noble Lord, Lord Phillips. My noble friend's amendment raises an important issue and I look forward to hearing the Government's response.
  Lord Bassam of Brighton: My Lords, I believe that we have been round this matter once already. Although I understand the issue of sensitivity, I cannot agree that the level of judicial authorisation should be as the noble Lord suggests. I know that that is the intention behind the amendment.
  Perhaps I should repeat the arguments that have been made here and that were made also in another place. I believe that the matter comes down to sheer practicalities. Although I entirely accept the noble Lord's analysis of the capability of the new technology, I do not believe that he fully appreciates how great a problem it would lead to if we were to

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  follow the course of action that he suggests. The sheer number of applications for communications data would make it wholly impractical.
  The intention behind the amendment is clear and I accept the point about it being a more intrusive form of communications data. I trust that the clarification on offer will be reasonably reassuring.
  Earlier in the debate I explained that during the first three months of the year 96.8 per cent of all communications data requests by Her Majesty's Customs and Excise had been for subscriber details—the most basic level of check—and 2.9 per cent of the remainder had been for itemised billing inquiries—
  Lord Lucas: My Lords, I apologise to the noble Lord but it seems that he has missed a point in this amendment, which is that it does not cover that data. It covers only the remaining data. The proposed authorisation relates only to data which are not subscriber data. That is why it says that it relates only to (a) and (b) and not (a), (b) and (c).
  9.45 p.m.
  Lord Bassam of Brighton: My Lords, I am grateful to the noble Lord for the further clarification. However, as I understand the drafting of the amendment, it would have that far wider impact. I take what the noble Lord says at face value but I consider that it would lead to a chaotic situation. I do not believe that he appreciates the effect of his amendment.
  Perhaps I may complete the point that I was making. I referred to the fact that 2.9 per cent of the remainder had been for itemised billing inquiries and the remaining 0.3 per cent for other services, none of which is more intrusive than those carried out by a surveillance team. That equates to a total of 18,940 requests. That is what I put on the record when we last discussed this issue. It is the 0.3 per cent of requests for other, more intrusive, types of communications data which I want to address.
  Already under the non-statutory arrangements agreed between the law enforcement, security and intelligence agencies and the telecommunications industry access to "more intrusive types of communications data" must be authorised at a more senior level within the agency, whereas "intrusive communications data" must be authorised at assistant chief constable level. I believe that that is the right approach and that it should be reflected in statute, both in the order made by the Secretary of State under Clause 24(3) and in the code of practice. Different levels of authority are not shown in the preliminary draft of the code because defining the different levels of communications data in a future-proof manner will require further work, including input from the industry.
  I believe that that should provide sufficient comfort to the noble Lord. On that basis, I invite him to withdraw his amendment. I am, as ever, open to further representations. If he wishes to pursue the
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  matter further between Report and Third Reading, he can do so and I shall be more than happy to look again at what he said.
  Lord Lucas: My Lords, of course, likewise, I shall read carefully what the Minister has said. However. I believe that his figures have made my case for me. He says that 0.3 per cent of approximately 19,000 interceptions by Customs and Excise in a six-month period would fall under the heading of my amendment. If my calculation is correct. 60 of them—10 per month—would require a magistrate's warrant. That seems to me to be entirely reasonable.
  Lord Bassam of Brighton: My Lords, does the noble Lord not accept that we have already established a sufficient level of seniority for that most intrusive form of interception to be authorised?
  Lord Lucas: My Lords, I shall consider that before Third Reading. The Minister has made his case and I plead for time to consider it. We are arguing not about whether some data should have higher-level authorisation but about what that higher level should be. If I feel that I have a further case to make to the Minister, I shall do so before or on Third Reading, but for now, I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Lord Bassam of Brighton Lord Bassam of Brighton moved Amendment No. 31:
  Page 24, line 23, leave out ("References in this section to") and insert ("In this section—

  (a) references, in relation to traffic data comprising signals for the actuation of apparatus, to a telecommunication system by means of which a communication is being or may be transmitted include references to any telecommunication system in which that apparatus is comprised; and

  (b) references to traffic").

  On Question, amendment agreed to.
  Lord Bach Lord Bach moved Amendment No. 32:
  Page 24, line 25, at end insert—
  ("and in this section "data", in relation to a postal item, means anything written on the outside of the item.
  (7A) The Secretary of State may by order modify the provisions of subsections (4)(a), (6A) and (7).
  (7B) The Secretary of State shall not make an order under subsection (7A) unless a draft of the order has been laid before Parliament and approved by a resolution of each House.").
  The noble Lord said: My Lords, I beg to move.
  [Amendment No. 33, as an amendment to Amendment No. 32, not moved.]
  On Question, Amendment No. 32 agreed to.
  Clause 21 [Obtaining and disclosing communications data]:
  Viscount Astor Viscount Astor moved Amendment No. 33A:
  Page 24, line 44, leave out paragraph (h).
  The noble Viscount said: My Lords, this is a probing amendment. Clause 21(2) specifies grounds such as the interests of national security, economic well-being,

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  public safety, the prevention of crime and public health. Paragraph (h), down at the bottom, effectively says, "Anything that we have left out we can add in by order of the Secretary of State".
  I realise that the Secretary of State would have to come to Parliament to gain approval for such an order, but he could make one on almost any basis. I should like an explanation of what possible basis there could be. The power is wider than it should be and I question the need for paragraph (h). Why do the Government think that it is necessary? I beg to move.
  Lord Bach: My Lords, the amendment requires a short debate, similar to one that we had in Committee on the purposes for which surveillance can be used under Part II. It rehearses comments from the 18th report of the Committee on Delegated Powers and Deregulation. As we explained in Committee, the comments in the 18th report have to be read in conjunction with the Committee's 21st report, which says:
  "In its comments on the powers in Clauses 21(2)(h), 27(3)(g) and 5(3) the Committee invited the House to consider whether those Clauses should he amended to limit the apparently wide powers to correspond with the use that Ministers intended to make of them and added that, in any event, all the powers should be subject to affirmative procedure. The Government accept the latter recommendation but reject the first on the ground that the Human Rights Act 1998 effectively limits the powers. The Minister will be obliged to make a statement that an order is, in his view, compliant with that Act. The Committee sees affirmative procedure as giving appropriate Parliamentary control and does not wish to continue to press for amendments to the Clauses".
  I repeat those final words:
  "and does not wish to continue to press for amendments to the Clauses".
  The Government tabled amendments in Committee to institute the affirmative procedure for such orders. We were grateful that the Committee did not press for further amendment to the clauses. As we said in Committee, the powers in the Bill will be limited by the Human Rights Act 1998 as a matter of law, not simply as a practical limitation. The Secretary of State may make no order that is incompatible with the convention. It is our considered view that to state in the Bill that the convention rights must circumscribe any use of the orders would add nothing to the situation in law.
  We can then go on to consider the legitimate purposes for which Article 8 of the European Convention on Human Rights permits interference with the rights protected by that article. There are only two which in some form we have not included in the Bill. Those are, first,
  "for the protection of morals",
  and secondly,
  "for the rights and freedoms of others".
  We could now, or at some future date, simply add those purposes to the list in Clause 21. But we should not want to do that. They are both too wide-ranging in their purposes. And in their raw form, they are both vague and unclear. Citizens affected by those powers should be entitled to expect more detail on the reasons for which their rights are being interfered with; for
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  example, we might, in the future, want a power to be exercisable by a regulator for the purpose of protecting the rights of pensioners or consumers. If so, it would be better to say that rather than to use the catch-all phrase,
  "to protect the rights of others".
  So any extension of the powers should be more specific, if possible.
  Your Lordships will notice that that is the approach that we have adopted for some of the purposes already listed in the Bill. They do not follow exactly the wording of the convention rights. They are tailored to be as narrow as possible within the convention rights and to meet the requirements of the investigating agencies in the modern age.
  We believe that it may be possible to add purposes in the future which are narrower than those left open to us; that is, "for the protection of morals" or "for the rights and freedoms of others". If we can conceive of narrower purposes in the future, we should be allowed to add them because they speak for a better approach than one that is too broad.
  These are important issues and they are inextricably linked with the implementation of the Human Rights Act. As a matter of law, it will not be possible for any Secretary of State to make an order that is incompatible with the convention. That is what the Human Rights Act guarantees and that is one of the great benefits of the Human Rights Act which was passed at the instigation of this Government a few years ago. In the light of this situation, the danger perceived in this order-making power simply does not exist. I am grateful to the noble Viscount for raising this probing amendment but I now ask him to withdraw it.
  Viscount Astor: My Lords, I am grateful to the Minister for his reply. The Delegated Powers and Deregulation Committee looked at this matter which is subject to the affirmative procedure. The committee looked at it from a powers point of view. I was asking the noble Lord to explain the Government's thinking as to why they might need that power. I have been given an explanation. The noble Lord explained that it will be limited by Article 8 and so on and why the Government need the power. That is extremely helpful and I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Clause 22 [Form and duration of authorisations and notices]:
  Lord Bassam of Brighton Lord Bassam of Brighton moved Amendment: No. 34:
  Page 25, line 41, leave out from ("authorisation") to end of line 43.
  The noble Lord said: My Lords, in moving this amendment, I shall speak also to Amendment No. 35. As the Bill stands, both authorisations and notices to access communications data may, subject to the other requirements placed by Clause 22, take such form and be granted in such a manner as the authorising officer thinks fit.
  Government Amendment No. 34 would remove that subsection relating to authorisations to access communications data, which we now believe is unnecessary. Although it would have provided extra flexibility to authorising officers, we believe it is better to provide central guidance, including standard forms where possible, in the code of practice. That will also be beneficial from an oversight point of view.
  Amendment No. 35, tabled by the noble Lord, Lord Cope, would have precisely the same effect in relation to notices served upon holders of communications data, and for that reason I am happy to accept it. Although a specimen notice does not appear in the preliminary draft of the code which we have published, we have made it clear that following consultation regarding the precise form of the notice, a specimen will be included in the draft which goes out for public consultation.
  I believe that the noble Viscount and I are as one. Our amendment will be helpful and effective and the amendment tabled by the noble Viscount adds to it. We are happy to accept his amendment. I beg to move.
  Viscount Astor: My Lords, I am always delighted to be as one with the Minister. I am extremely pleased that he considers that Amendment No. 35 adds to his amendment. This is an important issue. In paragraph (f) we were concerned that there were wide powers that were not subject to the scrutiny that existed on the previous amendment that we discussed.
  On Question, amendment agreed to.
  10 p.m.
  Viscount Astor Viscount Astor moved Amendment No. 35:
  Page 26, line 8, leave out paragraph (f).
  On Question, amendment agreed to.
  Clause 24 [Interpretation of Chapter II]:
  Lord Grabiner Lord Grabiner moved Amendment No. 35A:
  Page 27, line 25, at end insert—
  ("( ) the Commissioners of Inland Revenue;").
  The noble Lord said: My Lords, before explaining the purpose of this amendment, I apologise to the noble Lords, Lord McNally and Lord Phillips of Sudbury, for not having discussed it with them in advance. Yesterday I briefly mentioned it to the noble Lord, Lord Cope of Berkeley. It has only just come to my attention that it may be appropriate to use this Bill to deal with this point rather than for it to be dealt with through the exemption procedure under the data protection legislation or in the Finance Bill, or by way of delegated legislation under paragraph (f) of Clause 22(2). So there are other ways in which the matter could be dealt with.
  The purpose of the amendment is to give effect to one of the recommendations that I made in my report on the informal economy to my right honourable friend the Chancellor of the Exchequer in March this year. The amendment would provide a primary statutory authorisation that would enable the Inland Revenue to conduct reverse searches of telephone
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  number databases; in other words, the Inland Revenue would be able to obtain the name and address of a person holding a certain telephone number.
  I should say something about the background. Currently the Inland Revenue has wide powers to access information from outside government, for example, details of payments (names, addresses and amounts) made by a business for the supply of services; names and addresses held on statutory registers, for example, vehicle registration details from the DVLA; and full particulars of interest credited to bank or building society accounts in the United Kingdom.
  If Inland Revenue investigators were entitled to reverse search in the way that I have described, they would be able to follow up advertisements for goods and services that give contact telephone numbers but not personal details. We are all familiar with advertisements in local newsagents, local newspapers and, unfortunately, advertisements in telephone kiosks. It would be possible for the Inland Revenue to check whether the subscriber was registered for tax or perhaps claiming statutory benefits. It would be a quick and effective method of targeting investigations.
  For noble Lords who know about such matters, it will come as no surprise to hear that telephone directory databases can already be purchased on the Internet and stored on CD-ROM in a format that can be searched and reverse searched using a standard desktop computer. That practice has raised some concern about data protection; that is, that reverse searching is interpreted as not constituting "fair" processing under data protection law on the footing that the personal information, absent specific informed consent, was not supplied for that purpose in the first place.
  There are obviously circumstances where that concern must give way to an overriding public interest, which may be, for example, to contain fraud or to protect the public purse. Accordingly, the data protection legislation contains public interest exemptions; for example, the Data Protection Act 1998, Section 29. As a result, the emergency services are able to carry out reverse searches on all numbers which have been used to dial 1999. It is also the case that Customs and Excise investigators have been making reverse searches of the telephone directory for many years, and all requests for a search are channelled through a single point of contact at the Customs and Excise National Co-ordination Unit.
  It seems to me that it would be a desirable and valuable extension to the existing investigatory powers of the Inland Revenue to have the benefit of Amendment No. 35A. I believe that it is in the public interest that the Revenue should not be hamstrung in its endeavours to protect the public purse. In accordance with the procedures which have been adopted under the existing data protection legislation, it would be desirable to have suitable guidelines in the form of a code of practice. I beg to move.
  Lord Cope of Berkeley: My Lords, the noble Lord, Lord Grabiner, is obviously particularly experienced

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  in these matters because of the report he prepared, to which he referred, on the so-called "informal" economy—an odd way to describe the phenomenon, but we will not go into that at the moment. In particular, he made a clear case for the Revenue to be able to undertake reverse searches of telephone data.
  But I am not sure that that is the effect of Amendment No. 35A. I am now becoming hesitant because the rules of Report stage mean that I am supposed to speak before the Minister, who will be much more authoritative than I on this matter and it is possible that, closet lawyer though I may be, I have misread the Bill. Amendment No. 35A seems to give the Inland Revenue access to all communications data and not just traffic data. I am not quite sure where reverse searches of the telephone directory fall, whether under traffic data or communications data. Now that we are rewriting the Bill to distinguish between those two, it becomes important.
  One other aspect of this issue caught my eye; that is, the contrast between the Commissioners of Customs and Excise and the Commissioners of Inland Revenue. To those of us who have been involved in conventional types of business, Customs and Excise is seen mainly in terms of VAT and it may seem odd that the department which collects VAT, excise duty and so forth, is to be given these powers and, according to the Bill, the Inland Revenue is not. I fancy that, as much as anything, the reason is historic. Customs and Excise is a considerably older department and that is why Customs and Excise provisions appear first in finance Bills. Also it has a long history as an anti-smuggling agency, which at one time was an extremely rough business, and still can be. It was an armed service. Most of the older Customs Houses have a glass case somewhere with the odd musket or two and cutlass in it. The Inland Revenue never had powers of that character whereas Customs and Excise traditionally had.
  The situation is partly historic but partly also has to do with the fact that those working for Customs and Excise spend a great deal of their time engaged in international matters—anti-smuggling matters—of a very important nature, which include drugs and all things relating to excise duty, and so on. Given that it is in part historical, it also partly reflects the international nature of many of the operations of the Customs and Excise by comparison with those of the Inland Revenue. However, when one considers the VAT/income tax comparison, it is still odd that the two departments should be treated differently. I am not sure that I can logically justify such treatment in those terms.
  I spoke earlier about the difference of treatment as regards external and internal communications, which has continued into this Bill. That is perhaps another example of treating our own citizens within the country more softly, as it were, than those who are doing international business and who are, hence, potential smugglers, so to speak. Customs and Excise is not called the "Outward Revenue" or the "Overseas Revenue", but, in a sense, that would be the true
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  contrast to the Inland Revenue. It would also express the historic role of the service, though not its current role.
  Lord Phillips of Sudbury: My Lords, we should like to identify ourselves with the amendment. It is perhaps strange that the Commissioners for Inland Revenue were not placed within the definition of "relevant public authority" from the outset. As the noble Lord, Lord Grabiner, said, it is ludicrous for the Inland Revenue to be hamstrung in the proper collection of taxes at a time when there are already signs that tax is falling not so much on the well off as on the law abiding. Therefore, we are wholly supportive of this measure.
  Lord Bassam of Brighton: My Lords, I am grateful to my noble friend for raising this matter. Like other Members of this House, I am familiar with his report on the black economy and with the great respect in which that report is held. From what I understand and from the eloquent way in which my noble friend set out the considerations this evening, there seems to be a strong case for the inclusion of the Inland Revenue among those public authorities which are able to access communications data.
  For my part, I appreciate that this amendment would enable the Inland Revenue to track down those businesses that advertise a telephone number alone and have not told the Inland Revenue that they are liable to pay tax. This Government are encouraging people working in the informal economy to put their affairs in order. That encouragement needs to be balanced by powers which enable those who remain in the informal economy to be detected and brought to account. As such, that appears to me to be a sensible and proportionate suggestion.
  I am entirely convinced by what my noble friend has said. I was most interested in the discursive and informative comments made by the noble Lord, Lord Cope, and welcome the positive reaction from noble Lords opposite that this would be a useful addition to the statute book. Therefore, I can say that the Government are more than happy to accept this amendment.
  Lord Cope of Berkeley: My Lords, before the Minister sits down, could he respond to the point that I made about whether this provision would only give the Inland Revenue the possibility to make the reverse telephone number enquiries to which the noble Lord, Lord Grabiner, referred? Alternatively, will it go further than that in covering all communications data?
  Lord Bassam of Brighton: My Lords, I believe that I shall have to indulge in the familiar Home Office correspondence with the noble Lord on that point. However, I shall do so as swiftly as possible.
  Lord Grabiner: My Lords, I believe that a reply may be forthcoming.
  10.15 p.m.
  Lord Bassam of Brighton: My Lords, I struggle to read the writing that is in front of me. We agree that the Inland Revenue should be limited in the communications data that it can obtain. The Secretary of State will make an order under Clause 24(3) limiting the data that can be obtained by the Inland Revenue. I think that that answers the noble Lord's point.
  Lord Cope of Berkeley: My Lords, I believe that it probably does. However, I shall study it carefully and no doubt the noble Lord will write to me if necessary.
  Lord Grabiner: My Lords, I am grateful for the comments of all those who have participated in this short debate and for the approach adopted by my noble friend the Minister.
  On Question, amendment agreed to.
  Lord Cope of Berkeley Lord Cope of Berkeley moved Amendment No. 36:
  Page 27, line 27, leave out paragraph (f).
  The noble Lord said: My Lords, this amendment seeks to remove the possibility of the Secretary of State adding other public authorities to the relevant list. We have just added one. Clause 24(1)(f) implies that further public authorities may be added to the list. What other public authorities do the Government have it in mind to add to the list? The present list is, admittedly, fairly limited and comprises the police, the National Criminal Intelligence Service, the National Crime Squad, Customs and Excise, and the intelligence services. The Inland Revenue has now been added to the list.
  However, Clause 21 contains all kinds of measures which are not undertaken by the distinguished public authorities that I have mentioned. For example, Clause 21 mentions "protecting public health" and,
  "preventing death or injury or any damage to a person's physical or mental health".
  None of the public authorities that I have just mentioned is known to take care of those matters, although they have their own valid responsibilities. Clause 21 also mentions,
  "assessing or collecting any tax, duty, levy or other imposition, contribution or charge payable to a government department".
  An enormous number of government departments other than Customs and Excise and the Inland Revenue collect charges, taxes or duties of one kind or another. Every local authority collects local taxes of one kind or another and imposes local charges of every character. Therefore the potential for adding to the list of public authorities is enormous. The least that we can do is to inquire what the Government propose to do with this power, if it is granted to them by Parliament under the Bill. Is this a power that we should grant to the Government? I beg to move.
  Lord Lucas: My Lords, I entirely support my noble friend's amendment which points out the dissonance between the clause we are discussing and Clause 21. There are so many purposes in Clause 21 for which communications data can be obtained that there
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  clearly have to be more authorities in the Government's mind now that they intend to add to the list in Clause 24(1)(f). Before we reach Third Reading we should be given a list of them.
  Lord Bassam of Brighton: My Lords, this is altogether a more difficult issue than the question discussed earlier of whether we can add to the purposes for which communications data can be accessed. This issue addresses whether we can add to the list of public authorities which can access communications data.
  I am aware of the views of noble Lords opposite who think that the power should be removed, and, of course, I have read the 21st report of the Delegated Powers and Deregulation Committee. But the simple fact is that we are entering uncharted territory as we approach the implementation of the Human Rights Act. One of the prime purposes of this Bill is to enact an ECHR compliant regime for the use of the six investigatory powers which are covered by the Bill.
  As I have previously explained, the power of accessing communications data in Chapter II of Part I effectively replaces for the agencies named in Clause 24 the voluntary arrangements under the Data Protection Act 1998. There are significant constraints on the use that the public authorities named can make of the power. This is deliberate; it is necessary in order to ensure ECHR compliance. We have also instituted for the first time proper oversight and redress arrangements for the accessing of communications data.
  We are proud of the regime for communications data in the Bill. It is better than the voluntary arrangements currently operated under the Data Protection Act. The Bill brings strict controls, judicial oversight and recourse to the tribunal. We want to be sure that the regime is capable of applying to other agencies with important investigative or regulatory functions. Those agencies might use their own statutory powers as at present; or they might use voluntary arrangements; or they might not access communications data at all. The amendment, however, would prevent those other agencies from coming within the ECHR-compliant system in the Bill. That would be a curious result.
  The noble Lord asks why we cannot list now all the bodies which need to access communications data. We have done so in Clause 24, where we have listed the key law enforcement and intelligence agencies which we know will need these powers. But we are not sure that the list is or can be complete. I shall try to explain why.
  First, a concrete example: we had an interesting discussion on the case for the Inland Revenue to be added to the list. The case for the Inland Revenue, eloquently put by the noble Lord, Lord Grabiner, has arisen out of a learned and detailed consideration of the issues affecting the informal economy and the need to enforce it. I suggest that this is a good example of how very cogent reasons can be put forward for a public authority to be added to the list and which, perhaps with some justification, we would wish to accept.

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  But there are other regulators in the corporate and financial fields which may also be candidates for inclusion. Again, the position is not yet clear. This is not only because we are still finding out which techniques are used by which agency—although, as your Lordships know, there is some truth in that; it is one of the very instructive consequences of the Human Rights Act—but also because regulatory techniques change as patterns of business behaviour change. Communications data may well become more important to some agencies. If that happens, we do not believe that primary legislation should be the only means of responding.
  Finally, there may be bodies which do not yet know that what they are doing interferes with Article 8 rights and needs to be regulated. We hope that convention awareness is fairly good across the public sector, but we cannot be 100 per cent certain. There may be bodies which do not yet know that they are likely to be "public authorities" for the purpose of the Human Rights Act.
  For these reasons, we maintain that there is a strong argument for retaining the order-making power in Clause 24 and elsewhere in the Bill. Orders must be approved by each House, giving Parliament an opportunity to scrutinise any authorities that are added to the list. I ask noble Lords to reflect carefully on that matter. I would never disagree with the Committee lightly; I had intended to speak with Members of the Committee, but that has not been possible. After reflection, I ask noble Lords opposite to withdraw their amendment.
  We require flexibility and, if this amendment were to be agreed to, effectively we would need Acts of Parliament to add new agencies. While that might be desirable in terms of the level of scrutiny, it would be unduly inflexible and add an unnecessary burden to the legislative programme. This could perhaps be much better dealt with through order making, where there will be an opportunity to scrutinise any further authorities which need to be added to the list. With that, I trust that noble Lords opposite will feel able to withdraw their amendment.
  Lord Cope of Berkeley: My Lords, that was an astonishing response in several respects. Regarding the Home Office's careful concern for the legislative programme, given that we are awash with Bills from the Home Office at the moment—we have lists of Bills that are stuck somewhere in the parliamentary process—and given that we have another Bill to deal with in the next couple of weeks that the Home Office has just thought of, its tender concern for the legislative programme is touching.
  There were other extraordinary features of the noble Lord's response. This problem will clearly be extended, mostly it seemed from what the Minister said, to public departments which do not realise that they fall under the relevant sections of the Human Rights Act. Considering all the publicity there has been about the Human Rights Act— there have even been training sessions for lawyers on the Human Rights Act—there are still public departments which do not realise that within a few weeks they will come
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  under its provisions. The Secretary of State will have to rush through orders to try to bring them in line. The reply was extraordinary because within a couple of clauses we have another quite different definition of "relevant public authorities" which is incorporated by Clause 29 and Schedule 1. It is an enormously long list. It includes all kinds of interesting bodies, including the Royal Pharmaceutical Society, which we discussed at an earlier stage of our deliberations, the Food Standards Agency and other such bodies. They are given powers for directed surveillance, covert human intelligence sources and so on, but so far they are not to be allowed to look at the reverse telephone directory. Perhaps they will be allowed to look at it in the future. But, given the Minister's reply, why on earth Schedule 1 was not allowed to cover this clause I find difficult to imagine.
  It is not that we wish to deny the reverse telephone directory to public authorities that need it although, as I said earlier, I am still a little doubtful as to the exact amount of data to which a public authority in the list would be allowed to have access. However, in the light of the Minister's reply, startled as I am by it, I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Clause 25 [Conduct to which Part II applies]:
  Lord Bach Lord Bach moved Amendment No. 37:
  Page 28, line 21, leave out ("either") and insert—
  ("( ) is carried out in relation to anything taking place on any residential premises or in any private vehicle; and").
  The noble Lord said: My Lords, on behalf of my noble friend Lord Bassam, in moving Amendment No. 37 I should like to speak also to Amendment No. 38. We now come to Part II of the Bill. The Government are indebted to the noble Lord, Lord Lucas, for bringing to our attention an unintended consequence of the Bill's current provisions relating to intrusive surveillance. As drafted, a police officer using the residential premises of a third party as an observation post in order to carry out covert surveillance of a target outside those premises would be caught, as the noble Lord, Lord Lucas, argued in Committee, by the definition of intrusive surveillance in Clause 25(3). That was not intended. The police and other public authorities will often use the residential premises of a public-minded citizen as an observation post to follow the activities of a suspected criminal. That will not always be in connection with serious crime. The police may wish to know, for example, who is calling at the home of a suspected drug peddler. Such operations happen all the time and we never intended them to come within the classification of intrusive surveillance.
  These amendments remove that type of activity from the classification. Thus, intrusive surveillance is limited to the residential premises or private vehicle of the subject of the surveillance or to other premises or vehicle where the information obtained from a device is of the same quality and detail as might be expected to be obtained from a device actually on the premises or in the vehicle. I beg to move.
  10.30 p.m.
  Lord Lucas: My Lords, it is always a pleasure to find out that one has something right. It does not often happen on the Opposition Benches, but it has happened not only on the Opposition Benches today but also on the Government Benches, which is even rarer, as I remember from my years as a Back-Bencher when we were in government. I am delighted by the amendments. They are much better drafted than the ones I tabled. I am very pleased to see them in the Bill.
  On Question, amendment agreed to.
  Lord Bach Lord Bach moved Amendment No. 38:
  Page 28, line 22, leave out from ("individual") to end of line 26 and insert ("on the premises or in the vehicle or is carried out by means of a surveillance device").
  The noble Lord said: My Lords, this amendment has already been spoken to. I beg to move.
  On Question, amendment agreed to.
  Lord Lucas Lord Lucas moved Amendment No. 39:
  Page 28, line 41, leave out ("the same") and insert ("similar").
  The noble Lord said: My Lords, this amendment relates to a discussion we had on an amendment in Committee which was not greeted with approbation in the reply that I received from the Minister. I have tried with the amendment to move the argument on a little. I understand where the Minister is coming from in talking about the kind of devices he wishes to consider as providing intrusive surveillance of what is going on inside a property. I merely wish to make the point that I made, among others, in Committee, that the use of the words "the same" rules those out on the pure ground of the physics of these matters. It can never be the "same". The use of an optical system is bound to introduce distortion and loss of quality. If one is using a laser-based listening device, one has a sheet of glass. That will seriously degrade reception. However good the laser, the glass gets in the way. That will seriously degrade the quality of data and the quality of listening.
  However good the laser system, on the basic laws of physics it will never be "the same". It absolutely cannot be. It is no good the Minister hoping that law writing can go against the laws of physics. It cannot. Therefore, no such device will ever be intrusive surveillance if anyone chooses to push it to a court case. It is not "the same". That is why I propose in the amendment that we should have the word "similar", which would allow the physics to be accommodated in the law. One can say that a laser device provides a "similar" level of performance as one could achieve with a microphone in a room, but it definitely does not, and never will, provide the "same" level of performance. I beg to move.
  Lord Phillips of Sudbury: My Lords, in Committee I spoke on this amendment in the same terms as the noble Lord, Lord Lucas. The logic seems to be as irresistible today as it did then. I cannot see why the amendment is not acceptable. I hope that it is.
  Lord Cope of Berkeley: My Lords, I, too, hope that the amendment is acceptable, although it occurred to
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  me this morning when I was considering the issue that even "similar" may not be the correct word. What we mean is "as good as". The "same" means that it is neither better nor worse; "similar" means that it is not much better or not much worse; what we really mean is that it should be "as good as".
  Lord Bach: My Lords, this amendment would bring a greater range of surveillance activity within the definition of "intrusive surveillance". We do not want to do that. In Committee an amendment was tabled around subsection (5) of this clause. The noble Lord, Lord Lucas, was somewhat sceptical that a device outside residential premises or a private vehicle could ever produce material of the same quality as if it were located in those premises. I know that that doubt is behind the amendment.
  I begin by saying that we are assured that it is indeed possible to obtain material of the same quality and detail by remote means. Furthermore, given the rapid progress being made in all fields of technology, we consider this provision to be a wise piece of "future-proofing". It is therefore the Government's view that the test of the "same quality and detail" is the right one.
  It may be, for example, that some interference may result when one obtains audio material remotely, but the same may also be true when a device is present in the premises and the product from that device is transmitted back to those listening. However, the detail and quality—what can actually be heard—is the same.
  It might seem that this amendment is simply a matter of semantics. However, the noble Lord's amendment would also have the effect, as I said at the beginning of my remarks, of bringing a greater range of surveillance activity within the definition of intrusive surveillance.
  The Bill as it stands includes within the definition of intrusive surveillance those operations or investigations where the police or others use highly sophisticated equipment to obtain details of a conversation inside either a person's home or his private vehicle without installing a device on those premises. To extend the definition of intrusive surveillance to surveillance which produces material of a similar quality to that which could be obtained from a device actually present on the premises would not, in our view, be sensible.
  This broader definition would risk catching activities which are much less intrusive, such as watching and photographing activity seen through the window of a house, which is properly defined now as directed surveillance. Indeed, perhaps I may quote the noble Lord's own words when we discussed this in Committee. He said that,
  "merely watching something from outside",
  does not fall,
  "within the ordinary definition of 'intrusive"'.—[Official Report. 28/6/00; col. 927.]

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  I ask the noble Lord to reconsider this and to withdraw his amendment.
  Lord Lucas: My Lords, of course I shall withdraw the amendment, but I still argue the point that, according to the laws of physics, such surveillance never can be absolutely and exactly the "same". Imagine a microphone installed on a premises. The sensitivity of that microphone to a conversation will depend on a finely designed audio pick-up which will then be sent to a form of digital transmission which will, as I am sure the noble Lord knows, transmit back perfectly the information received. Error codes will be included so that any mistakes which occur in transmission can be traced and corrected. Thus, with a good quality, modern digital microphone, it is possible to achieve perfect transmission at a considerable distance from a premises.
  However, when using a laser device, the well-designed and sensitive microphone is replaced by a three-millimetre sheet of plate glass manufactured by Pilkington to no high specification. It will contain within it all kinds of harmonics and vibrations. It must produce a lower level of reception because the level of hearing will be so much worse than that from a microphone placed inside a premises. Even though perfect transmission might be achieved from the glass back to the electronic reception, the fact of the sheet of glass standing in the way will inevitably degrade the transmission. If the requirement is that it should be the "same", then everything should be ruled out. There is no device in existence which operates outside that could not be bettered by a device placed inside a premises or a car. That is an absolute and 100 per cent unbreakable law of physics. It cannot be otherwise.
  However, I understand the noble Lord's difficulties with the word "similar". It will allow into the definition of intrusive surveillance all kinds of activities which he would not wish to see included. However, I hold to my basic premise; namely, that the wording used by the Government keeps everything out. The Government have said that they do not want that either. I hope that those on both sides of the argument will give the matter further consideration before Third Reading. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Clause 29 [Persons entitled to grant authorisations under ss. 27 and 28]:
  Lord Bach Lord Bach moved Amendment No. 40:
  Page 33, line 12, leave out ("The Secretary of State may by order") and insert ("An order under this section may").
  The noble Lord said: My Lords, on behalf of my noble friend I should like to move Amendment No. 40 and speak at the same time to Amendments Nos. 41, 42, 43 and 94. These amendments look substantial on the Marshalled List, but their purpose is simple. They seek to achieve four things. They will add the Food Standards Agency and the Intervention Board to the list of bodies whose surveillance activities can be regulated by an order made by the devolved administration. The new clause deals with the
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  situation in Northern Ireland and will enable the devolved administration in Northern Ireland to make orders governing surveillance by bodies in the transferred, devolved field.
  First, the amendments add the Food Standards Agency and the Intervention Board to the list of bodies. Secondly, they ensure that the same is true for new bodies which are added to the schedule by the Secretary of State. As long as those bodies are not within sole Westminster competence, it is right that the devolved administration should have the ability to regulate them. Thirdly, the amendments change the order-making authority from "First Minister and Deputy First Minister acting jointly" to "Office of the First Minister and Deputy First Minister". That refinement is made at the suggestion of the devolved administration. Lastly, the amendments split Clause 29 into two clauses, simply because the Northern Ireland material in Clause 29 has become substantial enough to merit a new clause. I beg to move.
  Lord Cope of Berkeley: My Lords, some would not regard 12th July as a suitable day on which to make these changes in relation to Northern Ireland. However, I do not object to them.
  On Question, amendment agreed to.
  Lord Bach Lord Bach moved Amendments Nos. 41 to 43:
  Page 33, line 18, at end insert—
  ("(5A) Without prejudice to section (Orders under s. 29 for Northern Ireland), the power to make an order under this section shall be exercisable by the Secretary of State.").
  Page 33, line 25, leave out subsections (7) to (13).
  After Clause 29, insert the following new clause—

  ORDERS UNDER S. 29 FOR NORTHERN IRELAND
  (" —(1) Subject to subsections (2) and (3), the power to make an order under section 29 for the purposes of the grant of authorisations for conduct in Northern Ireland shall be exercisable by the Office of the First Minister and deputy First Minister in Northern Ireland (concurrently with being exercisable by the Secretary of State).
  (2) The power of the Office of the First Minister and deputy First Minister to make an order under section 29 by virtue of subsection (1) or (3) of that section shall not be exercisable in relation to any public authority other than—

  (a) the Food Standards Agency;

  (b) the Intervention Board for Agricultural Produce;

  (c) an authority added to Schedule 1 by an order made by that Office;

  (d) an authority added to that Schedule by an order made by the Secretary of State which it would (apart from that order) have been within the powers of that Office to add to that Schedule for the purposes mentioned in subsection (1) of this section.

  (3) The power of the Office of the First Minister and deputy First Minister to make an order under section 29—

  (a) shall not include power to make any provision dealing with an excepted matter;

  (b) shall not include power, except with the consent of the Secretary of State, to make any provision dealing with a reserved matter.

  (4) The power of the Office of the First Minister and deputy First Minister to make an order under section 29 shall be exercisable by statutory rule for the purposes of the Statutory Rules (Northern Ireland) Order 1979.
  (5) A statutory rule containing an order under section 29 which makes provision by virtue of subsection (5) of that section for—

  (a) adding any public authority to Part I or II of Schedule 1, or

  (b) moving any public authority from Part II to Part I of that Schedule,

  shall be subject to affirmative resolution (within the meaning of section 41(4) of the Interpretation Act (Northern Ireland) 1954).
  (6) A statutory rule containing an order under section 29 (other than one to which subsection (5) of this section applies) shall be subject to negative resolution (within the meaning of section 41(6) of the Interpretation Act (Northern Ireland) 1954).
  (7) An order under section 29 made by the Office of the First Minister and deputy First Minister may—

  (a) make different provision for different cases;

  (b) contain such incidental, supplemental, consequential and transitional provision as that Office thinks fit.

  (8) The reference in subsection (2) to an addition to Schedule 1 being within the powers of the Office of the First Minister and deputy First Minister includes a reference to its being within the powers exercisable by that Office with the consent for the purposes of subsection (3)(b) of the Secretary of State.
  (9) In this section "excepted matter" and "reserved matter" have the same meanings as in the Northern Ireland Act 1998; and, in relation to those matters, section 98(2) of that Act (meaning of "deals with") applies for the purposes of this section as it applies for the purposes of that Act.").
  On Question, amendments agreed to.
  Lord Phillips of Sudbury Lord Phillips of Sudbury moved Amendment No. 43A:
  Page 52, line 24, leave out ("likely to be of value for purposes connected with") and insert ("necessary and of substantial importance for").
  The noble Lord said: My Lords, Amendment No. 43A deals with the four conditions which must be satisfied if any person with the appropriate permission under the clause is to impose a disclosure requirement in respect of protected information. Therefore, this is very important. Clause 47, which prescribes how notices requiring disclosure are to be formulated, is central to the Bill. We on these Benches believe that the four conditions impose sensible requirements. One is that the person on whom the disclosure requirement is to be imposed is in possession of the protected information. The second condition is that the imposition of that requirement is proportionate. The third requirement is that it is not reasonably practicable to get the information otherwise.
  The last condition, which is where the amendment comes in, is that the imposition of the disclosure requirement in respect of protected information is necessary on the grounds specified in subsection (3)—that it is in the interests of national security, that it is for the purpose of preventing or detecting crime or that it is in the interests of the economic well-being of the UK—or is,
  "likely to be of value for purposes connected with the exercise or performance by any public authority of any statutory power or statutory duty".
  That is such an open, vapid and weak requirement—it is also an alternative to the interests of national security, crime detection and the UK's economic well-being—that it blasts a considerable
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  hole in the proper protection which citizens should have against a disclosure requirement, which is a very serious step, being placed upon them.
  This amendment changes the wording of subsection (2)(b)(ii) so that it reads:
  "necessary"—
  that reflects subsection (1)—
  "and of substantial importance for the exercise or performance of any public authority of any statutory power or statutory duty".
  We believe that that sensible, minimal provision should be satisfied before these substantial powers are exercisable. I beg to move.
  Lord Bassam of Brighton: My Lords, I am aware that the provision in Clause 47(2)(b)(ii) has caused concern. I stress that this is not the open door to allow access to keys as some have painted it. Encrypted data may conceivably be encountered in a number of circumstances by a wide range of public authorities other than simply the UK's law enforcement, security and intelligence agencies which have statutory powers to seize or require disclosure of information.
  Our objective is to seek to maintain as best we can the effectiveness of all statutory powers and functions in the face of technological advancement. These are powers that Parliament has considered are necessary. Merely because advancements in technology now make it possible for data to be protected in some extra technical way through the use of strong encryption ought not of itself to undermine the effectiveness of these powers. That is the essential position.
  That said, the amendment indicates a view that the current test in Clause 47(2)(b)(ii) is too low. We are prepared to look at this again and produce something a little stronger. We do not believe that the exact wording proposed by the noble Lord quite works. But I undertake to take this matter away and propose alternative wording in time for Third Reading. I am sure that the noble Lord will see fit to withdraw his amendment in those circumstances.
  Lord Phillips of Sudbury: My Lords, the noble Lord does indeed see fit to withdraw his amendment and looks forward to the wording proposed.
  Amendment, by leave, withdrawn.
  Clause 47 [Notices requiring disclosure]:
  10.45 p.m.
  Lord Phillips of Sudbury Lord Phillips of Sudbury moved Amendment No. 44:
  Page 52, line 45, at end insert—
  ("( ) must provide arrangements for the protected information to be delivered to the recipient in the event that—

  (i) it is not already in his possession. or

  (ii) it is only likely to come into the possession of any person or service in accordance with some paragraph of subsection (1);").

  The noble Lord said: My Lords, this is not an easy clause in the Bill. The amendment addresses a situation where the recipient of a Section 47 disclosure

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  notice cannot comply with it because he does not have the protected information that he is supposed to decrypt or put into plain text. Perhaps I may make it easier to understand by giving a scenario.
  Let us say that Steve sends an encrypted message to Willie and he decrypts it. He reads it and notes its contents. He does not keep it perhaps because it contains information which is too sensitive to keep. Two days later a legally entitled entity who has intercepted the message comes to Willie with a Section 47 notice and requests to be provided with the plain text. Willie cannot comply, however willing. He says, "Supply me with a copy of the protected information and I shall be happy to oblige". If, for whatever reason, the legally entitled authority does not then supply the protected information, poor Willie is in a serious situation, which we would not want. This innocent amendment is designed to put Willie in the clear in these unhappy circumstances. I beg to move.
  Lord Cope of Berkeley: My Lords, this problem was also pointed out to me. It is important that we have a response to it and preferably that we put the Bill right.
  Lord Bassam of Brighton: My Lords, I am grateful to the noble Lord for being so concerned about communications between Steve and Willie. I shall do my best. As I understand it, this amendment seeks to plug what seems to be a flaw in the current construction of Clause 48. The proposed change would mean that in all cases where the recipient of the notice does not have the relevant protected information in his or her possession the person with permission to serve a Section 47 notice would be required to provide that information in its entirety to the recipient of the notice to allow him or her to decrypt it or to disclose any key of their choosing that does decode it.
  We cannot accept this amendment. The Bill recognises that there may be cases where the recipient of a notice does not have the relevant protected information in their possession but has a relevant key. In such cases it may well be that providing the relevant protected information to a person will be sensible and practical in certain circumstances. We can see that.
  Clause 48(1)(a) makes it clear that there will be no statutory bar to giving him or her access to the information. But there may be other cases where it might not be right to do that; for example, where notices are to be served on persons themselves suspected of criminality. We do not believe it right that in all cases they, too, should be supplied with the relevant protected information.
  We must also consider the question of an individual's right to privacy. We hear much talk about that in connection with Part III. We can envisage problems if there is a blanket requirement to disclose one person's information to another who might, for example, never have seen it; nor was it meant for him. We do not think that it would be right in all cases for those people to be able to see another person's information.
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  The argument is starkest in cases involving interception. The amendment would be in conflict with the principle underlying Clause 14, which we think rightly imposes strict limits on who can see intercepted material. We think that the privacy argument prevails.
  This is difficult. We do not believe it appropriate to put a blanket provision on the face of the Bill to say that a person serving a notice must in all cases provide the recipient of a notice with all the protected information where he himself does not possess it. That would be the effect of the noble Lord's amendment.
  There will be cases where that is appropriate but others where it is not. It seems to us that this is a matter sensibly dealt with in the code of practice. I appreciate that the initial draft code does not cover this but we shall consider the noble Lord's comments on this point—they are relevant and no doubt we shall receive communications from other interested parties on the subject—in fleshing out the details of the code. I trust that, with that undertaking, the noble Lord will feel able to withdraw the amendment.
  Lord Phillips of Sudbury: My Lords, I am grateful to the Minister for the reply. It merely illustrates the twists and turns which dog every part of the Bill. I should be happy to think that there were satisfactory provisions in the relevant code of practice.
  Perhaps the Minister will assure me that in the scenario I suggested Willie could not find himself on the wrong side of the law because such a provision is not in the Bill. I do not expect that assurance today. However, there could be a category of cases where severe injustice could be done.
  Lord Bassam of Brighton: My Lords, I am prepared to consider the point further. If we cannot put a provision on the face of the Bill—I do not think that we would be in that territory—it is an issue which can be addressed in the code of practice. If the noble Lord has a drafting suggestion, we shall consider it closely.
  Lord Phillips of Sudbury: I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  The Earl of Northesk The Earl of Northesk moved Amendment No 45:
  Page 53, line 7, leave out first ("the") and insert ("a reasonable").
  The noble Earl said: My Lords, this is an exceedingly modest amendment. I am conscious that my noble friend Lord Cope suggested earlier that I have a tendency to underestimate the effect of such amendments. The amendment seeks to impose a reasonable test on this contentious and significant part of the Bill. The hour is late; we have tomorrow to come. Therefore, I beg to move.
  Viscount Astor: My Lords, as my noble friend said, Clause 47 is a difficult and controversial part of the Bill. It is a reasonable amendment. The Govern merit must either accept the amendment or explain why they

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  regard it as unnecessary. The Bill provides that a notice imposing a disclosure "must specify the time". There is no reference to a reasonable period of time unless the issue is addressed in a code of practice that I have missed. I shall listen with interest to the Minister's response.
  Lord Bassam of Brighton: My Lords, the noble Earl did himself an injustice by saying that his amendment was modest. It is a most helpful amendment. It appears to stem from a fear of unreasonable demands in respect of the time by which persons may be required to comply with Section 47 notices.
  We discussed the matter in Committee, when I set out reasons why I did not believe that that would be the case. However, I am willing to accept the noble Earl's amendment in principle. We do not believe that the drafting is quite right and if he can accept that point I happily give an undertaking to come back at Third Reading with something that does the job. We need to consider the words in order to ensure that they are fit for the purpose and I hope that the noble Earl will feel able to withdraw his amendment.
  The Earl of Northesk: My Lords, I gained the impression that I was quite close—wonders will never cease! I am entirely happy with the Minister's response and beg leave to withdraw the amendment. I look forward to the Minister resolving the issue in his own terms.
  Amendment, by leave, withdrawn.
  Lord Bach Lord Bach moved Amendment No. 46:
  Page 53, line 9, leave out from ("made") to end of line 11.
  The noble Lord said: My Lords, this limiting amendment would delete the provision permitting a Section 47 notice to be given,
  "in such form as the person giving it thinks fit".
  It is a simple change and one which we hope will be welcome. It was prompted by similar amendments tabled in Committee by the noble Lord, Lord McNally, and the noble Earl, Lord Northesk, to which we have given further consideration.
  The fear was that the present provision contained in Clause 47(4)(h) would somehow be misused, allowing notices to be served in whatever form a particular authority saw fit to use. I believe that those fears are very much unfounded. We have said all along that there needs to be consistency in the form of notices for the sake of the authority serving them and of those receiving them. But by way of offering comfort, we are proposing here to delete Clause 47(4)(h) from the Bill. Guidance on notices will be given in the code of practice. We need to consult on the form of a notice to achieve best practice. We have set out an idea of what a notice might look like in the initial draft code of practice on which we will welcome and require comments from all interested parties. I beg to move.
  The Earl of Northesk: My Lords, as a matter of courtesy, I rise to thank the Minister for the Government's response.
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  On Question, amendment agreed to.
  Lord Lucas Lord Lucas moved Amendment No. 47:
  Page 53, line 16, leave out ("the") and insert ("an").
  The noble Lord said: My Lords, I have never yet succeeded in arguing grammar with the parliamentary draftsman. I doubt that I shall succeed on this occasion but I beg to move.
  Lord Bach: My Lords, the noble Lord says that he has never succeeded in arguing with the parliamentary draftsman. Tonight is a first; he has succeeded beyond his wildest dreams. We spoke earlier of lawyers and closet lawyers and the incredible care with which the noble Lord has examined the Bill has paid off. We believe that he is right and we are happy to accept his amendment. We are always pleased to hear the noble Lord's drafting suggestions—perhaps not always so late at night—and on this occasion we are happy to accept his amendment.
  Lord Lucas: My Lords, I have a small confession to make. The idea was not mine but that of a gentleman called Charles Lindsey from Manchester University. Clearly, academia is working at full speed on the Bill and I am delighted.
  Lord Bach: My Lords, the noble Lord has just spoilt it all!
  On Question, amendment agreed to.
  Lord Phillips of Sudbury Lord Phillips of Sudbury moved Amendment No. 48:
  Page 53, line 44, at end insert—
  ("( ) A notice shall not be considered necessary on the ground falling within subsection (3)(c) unless the information protected by the key which is sought to be disclosed is information relating to the acts or intentions of persons outside the British Islands.").
  The noble Lord said: My Lords, the amendment is ill-placed and would better sit under subsection (3). However, its object is simple enough. It attempts to bring the rationale which underlies Section 47 notices into line with that which prevails for interception warrants with which we believe Section 47 notices should be compared as regards civil libertarian and privacy aspects. That is the point of bringing in the reference to,
  "relating to the acts or intentions of persons outside the British Islands".
  or, as it may be better to say, the United Kingdom. I beg to move.
  11 p.m.
  Lord Bassam of Brighton: My Lords, I believe that the concerns which lie behind the amendment are unfounded. The limitation suggested is already present via other existing statutes. It is unnecessary because the underlying powers of the relevant agencies which may lawfully obtain material in the interests of the economic well-being of the UK are constrained by existing statutes which confine the agencies' functions to certain activities only. That is important and has been missed by a number of commentators outside your Lordships' House.

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  Section 47 notices authorised as being necessary in the interests of the economic well-being of the United Kingdom under Clause 47(3)(c) must be related to the acts or intentions of persons outside the British Islands. The reason is that the powers and functions of the relevant agencies are constrained by statute—in this case, the Intelligence Services Act 1994.
  For example, the statutory function of the Secret Intelligence Service which may be exercisable in the interests of the economic well-being of the United Kingdom under Section 1(2)(b) of the ISA is constrained by Section 1(1)(a) of that Act only to where this relates to,
  "the actions or intentions of persons outside the British Islands".
  The statutory functions of GCHQ are similarly constrained by Section 3(2)(b) of the ISA, which also limits the economic well-being function to,
  "actions or intentions of persons outside the British Islands".
  The corresponding function of the Security Service is to safeguard the economic well-being of the United Kingdom against threats posed by the actions or intentions of persons outside the British Islands. That is by virtue of Section 1(3) of the Security Service Act 1989.
  Section 5(2)(a) of the ISA explains that the Secretary of State may authorise a warrant only where it is necessary in carrying out the functions of the agencies, those functions being constrained as I have just described. As regards economic well-being, that must relate to the actions or intentions of persons outside the United Kingdom. It is unlawful for the agencies to act outside their statutory functions as described in the ISA.
  The important point to reiterate is that the power to serve a decryption notice is simply ancillary to existing, limited powers. Therefore, to a large extent the restriction which noble Lords seek is already there, attached to the relevant underlying statutory power.
  Clause 47(3)(c) is worded,
  "in the interests of the economic well-being of the United Kingdom".
  because we must cater for the circumstances where, for example, protected material is lawfully obtained under a warrant granted under Section 5 of the Intelligence Services Act. Such a warrant may be granted,
  "in the interests of the economic well-being of the United Kingdom".
  Parliament has already provided for that power. Therefore, it is right that the disclosure power in Part III of the Bill can cover it. However, as I explained, that is constrained by underlying statutes to situations where our economic well-being is affected by the actions or intentions of persons outside the UK.
  I trust that that explanation will enable the noble Lord to withdraw his amendment.
  Lord Phillips of Sudbury: My Lords, I am grateful for that full explanation. I believe that it is a pity that in a Bill of this nature that cannot be put on the face of the Bill rather than leaving the poor reader of the statute to chase around among a hoard of other Acts.
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  I do not see why, as a matter of practical draftsmanship and utility of the measure, that should not appear here.
  My second point is: what would be the situation if the intelligence agencies came into possession of protected information other than by a statutory power? Could not the Secretary of State for Trade and Industry authorise a decryption notice in the interests of economic well-being, thus escaping the defences mentioned by the Minister? I do not expect him to answer that point at five past 11 on a Wednesday night, but I ask him to dwell on the first practical issue and perhaps review his opinion before Third. Reading. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Lord Lucas Lord Lucas moved Amendment No. 49:
  Page 53, line 44, at end insert—
  ("( ) A notice under this section shall not require the disclosure of any key where an application under the Police and Criminal Evidence Act 1984 may be used to require the production of data in a legible and usable form.").
  The noble Lord said: My Lords, we have all received e-mails with attachments that turn out to be unreadable because they have been written in a program that we do not have or that our word processor will not read. As the Bill is written, such data are considered to be encrypted, because they cannot be read as plain text. A document is practically encrypted if the receiver cannot read it or make sense of it—and a right pain it is to receive it.
  The police have the power under the Police and Criminal Evidence Act 1984 to require that the information be put into a form in which they can read it. The Bill addresses that problem in a different way, by requiring me, against all the copyright agreements that I have presumably entered into with Microsoft, to provide the police with a copy of whichever version of Word I have used to write the document that is unintelligible to them. PACE is a better way of dealing with encryption caused by commercial programs storing data in their own format. The amendment is a suggestion, but I shall be happy to accept that there are better ways of doing it. I beg to move.
  Lord Bassam of Brighton: My Lords, I am grateful to the noble Lord, Lord Lucas. He has touched on an issue that we had considered. We looked carefully at whether PACE might be sufficient to do the job, but we do not believe that it is. It is interesting that we were working in the same direction.
  PACE was enacted before the growth of the Internet as a mass communications medium and the wider availability of strong encryption. PACE does not do what the authorities need on protected information. The important point is contained in Section 20 of PACE, which the noble Lord hints at in the amendment. It requires computerised material to be produced in a visible and legible form that can he taken away. The important question is whether that also means that the information should be comprehensible. We believe that there is doubt about that. The issue has already caused problems for the police.

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  There is no explicit power in UK law to require someone to disclose protected information in an intelligible form; neither is there a clear power to require the disclosure of an encryption key. We are trying to remedy that with Part III. Tweaking PACE would not do that.
  We recognise that any number of other statutory powers and functions may potentially be undermined by the rising use of encryption technology by criminals. That is why we have opted for a self-standing disclosure power to be properly authorised that contains its own safeguards.
  If the relevant PACE provisions were sufficient, I assure your Lordships that we would not be legislating in Part III. It is because they are not that I invite the noble Lord to withdraw his amendment.
  Lord Lucas: My Lords, I am grateful to the Minister for that reply. I hope that he will be able to tell me, in correspondence or otherwise, how I get round the fact that I am not authorised to provide anybody with a copy of a commercial program. I shall get into all sorts of trouble if I start copying Microsoft Word to provide it to other people. That is effectively what I should have to do if the police required me to produce the key because the program itself is the key.
  All I need is some comfort that I am protected from any consequences from the author of the program for providing the police or whoever with a copy of it so that they can use it on the files which they need to understand. But I do not need an answer now and I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Lord Phillips of Sudbury Lord Phillips of Sudbury moved Amendment No. 50:
  Page 53, line 46, leave out from beginning to end of line 1 on page 54 and insert ("where—

  (a) it is intended to be used for the purpose only of generating electronic signatures and has not in fact been used for any other purpose; or

  (b) the protected information to which that key relates is itself a further key whose disclosure could not be required by virtue of this subsection.").

  The noble Lord said: My Lords, this amendment is to protect signature keys. We believe that the Bill as drafted inadvertently creates a problem. Signature keys are normally numbers with special mathematical properties which are thousands of digits long. That is intended to prevent any possibility of being penetrated. In turn, that means that no one can remember his signature key numbers and thus a simple memorable pass phrase is needed in order to obtain access to the real signature key.
  This matter is beyond my ken but we are informed about it by those assisting us—Caspar Bowden in particular. The problem is that under the Bill as drafted the encrypted private signature-only key is itself protected information. That is under Clause 54(1) and (4). However, if that were to come into the possession of an officer—for example, by seizure of
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  a computer—the officer may by notice under Clause 47(9)(a) demand the owner's pass phrase, notwithstanding that he would then hold the owner's signature-only key.
  The officer would not be in breach of Clause 47(9)(a) in asking for that and he is asking for the pass phrase which is undoubtedly an encryption key and for which he is thus entitled to ask. So the purpose of this wording is to close that loophole. I beg to move.
  Lord Lucas: My Lords, perhaps I may point out an oddity in the groupings list. We are now discussing Amendment No. 50 which should be grouped with Amendment No. 52 and then Amendments Nos. 51 and 53 go together. The noble Lord, Lord Phillips, has not spoken to Amendments Nos. 51 and 53, which go together conveniently as the next grouping because they deal with the word "recently". Amendments Nos. 50 and 52 deal with the problem of how keys are held by people and they go together.
  I entirely support what the noble Lord, Lord Phillips, said. Nobody keeps his private key in his head or anywhere. It is a long succession of digits or symbols, 128 of them, and they are not memorable. They are protected with a pass phrase. So people will carry around their digital signature in their head as a pass phrase. But, as the Bill is written at the moment, that pass phrase can be demanded and received by the police, even though it only protects one's digital signature to which the police have no right. As the noble Lord, Lord Phillips, said, Caspar Bowden has spotted a technical but important error which should be put right, if not by this amendment then by something similar.
  Lord Cope of Berkeley: My Lords, I agree with noble Lords who have spoken. This is something which needs to be put right. We are given a choice of drafting here. I express a preference for my noble friend's drafting, not merely on grounds of friendship.
  Lord Phillips of Sudbury: My Lords, I should have dealt with Amendments Nos. 51 and 53. There is no pride at this hour of night and if the drafting of the noble Lord, Lord Lucas, appeals to the Government, I do not care so long as the problem is resolved. Amendments Nos. 51 and 53 are designed to ensure the protection of subsection (9), which states that a notice,
  "shall not require the disclosure of any key which … (b) has not in fact been used for any other purpose".
  The insertion of the word "recently" seems sensible and reasonable. Amendment No. 53 simply defines what "recently" means.
  11.15 p.m.
  Lord Bassam of Brighton: My Lords, I shall deal with Amendments Nos. 50, 51, 52 and 53. In Committee there was discussion of electronic signature keys and I said then, as I say now, that we recognise the importance of maintaining the security

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  of electronic signature keys. The whole point about electronic signatures is to ensure the integrity and authenticity of data, but the reality of the technology is that it is possible for signature keys to be used for confidentiality purposes to protect or to encrypt the content of data or messages. After all, Part III of the Bill is all about that.
  Where keys have been used for both purposes, it seems right that the Bill should provide for power to require disclosure in certain circumstances. That is the reality of the technology. As before, your Lordships' amendment recognises that in paragraph (a) of Amendment No. 50. If paragraph (b) is intended to allay fears in cases where persons may have stored their electronic signature on their computer and, to protect it, encrypted it with a password or passphrase, the rationale is that that becomes protected information which, if the computer is seized, a law enforcement officer could demand to be disclosed under the Part III powers.
  I see what this tries to achieve, but I do not believe that it is necessary. I recognise the concern and I shall try to address it. First, law enforcement will be able to serve a notice only if the tests in Clause 47 are met. Trying to obtain a key by describing it as protected information would have to be necessary. I cannot predict all future circumstances in which keys may be sought but those tests look pretty high in the example that we are discussing here.
  Secondly, we are interested to ensure that these provisions are not abused or avoided by practitioners. For the record, if law enforcement officers want to gain access to decrypted information, they should do so by following the procedure set out in the Bill. They should not do so by treating the key as protected information. I am grateful to noble Lords who have raised this issue. We shall address it as a matter of good practice in the code of practice. There is a similar concern in Part II where it would theoretically be possible for someone to achieve what amounts to telephone interception by planting a bug and avoiding Part I of the Bill. Already the code of practice under the Police Act 1997 effectively prevents that and we shall repeat the inhibition in our code under Part III of this piece of legislation. What I have said probably covers Amendment No. 52, referred to by the noble Lord, Lord Lucas.
  Turning to Amendments Nos. 51 and 53, they seek to insert a cut-off point for access to keys used for both electronic signature and confidentiality purposes. I understand the concern about it being asked for keys to be disclosed that were last used for confidentiality purposes some time ago. I understand what these amendments seek to achieve, but we believe that they would cause difficulties.
  It is important to remember that permission for Section 47 notices to be served may be given only in respect of information that has been or is likely to be obtained under some lawful authority. The combined effect of Amendments Nos. 51 and 53 causes a difficulty. Suppose permission to serve a Section 47 notice is given, following only a week-long
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  investigation, and although there are not sufficient grounds to justify it, protected information is lawfully seized, including material last encrypted with a key, say, some six months ago, are we saying that that key should not come under the ambit of the Part III power? Under the terms of this amendment, that would be damaging. There are difficulties in setting down timescales as envisaged by the amendments.
  Indeed, general difficulties have been raised by noble Lords. Many are thrown up by the nature of the technology itself, ever-evolving as it does. We tried to provide protection against the set of keys used only for electronic signature purposes in Clause 49, and it is right that we do so. Safeguards are in place, but the reality is that the Bill needs to cater for occasions when signature keys are also being used for confidentiality purposes. That, too, we believe to be right in the circumstances.
  I accept that that is a lengthy explanation. But I hope it helps the noble Lord to feel able to withdraw his amendment.
  Lord Phillips of Sudbury: My Lords, I listened to the Minister's explanation with less than a perfect understanding of all its working parts. I shall look at Hansard carefully. It may be that I shall have to come back to this later. In the meantime, I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  [Amendment No. 51 not moved.]
  Lord Lucas Lord Lucas had given notice of his intention to move Amendment No. 52:
  Page 54, line 1, at end insert ("; and
  (c) protects only a further key the disclosure of which could not be required by virtue of this subsection").
  The noble Lord said: My Lords, most of what I wanted to say in relation to Amendment No. 52 was covered by the Minister. I merely wish to record, for purposes to which we shall come tomorrow rather than today, that on this basis most of the people in the world—there are a large number of them—using PGP or similar signature systems, will find those signatures open under this Bill because they are used as dual-purpose keys. That is widespread in that and other signature systems. So when we are looking at separating signatures from other keys, we are not doing it to any great extent as regards the ordinary use of current commercial systems by ordinary people. We probably are when we come to commercial organisations, but not for individual people.
  [Amendment No. 52 not moved.]
  [Amendment No. 53 not moved.]
  Lord Cope of Berkeley Lord Cope of Berkeley moved Amendment No. 54:
  Page 54, line I, at end insert—
  ("( ) A notice under this section shall not confer any right production of, or access to, items subject to legal privilege.").
  The noble Lord said: My Lords, Amendment No. 54 is another amendment attempting to preserve legal privilege. This one was suggested to me as being

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  necessary by the Law Society of Scotland and the Law Society of England and Wales as well. Judging by what happened earlier when I moved a similar amendment on behalf of the Bar Council, I shall be told it is all covered by common law. There appear to be quite a lot of lawyers on my side of this particular argument, but I accept that there appear also to be some on the government side. I beg to move.
  Lord Bach: My Lords, the noble Lord, Lord Cope, as so often, is absolutely right; the magic phrase "common law" will be used to answer this particular amendment as it was used, what now seems many hours ago, earlier this evening.
  We discussed the question of legally privileged material in the context of our discussion of interception under Part I of the Bill. This Bill does not rewrite the rules of evidence. If something is inadmissible because it is legally privileged, that remains the case under the Bill. That is true for all parts of the Bill.
  Of course, there is the separate question of whether legally privileged material should be looked at under any part of the Bill. That is something we intend to look at under the draft statutory codes of practice and have already asked for comments on what the code should say. As regards Part III, it is important to stress that the disclosure power does not undermine safeguards in existing legislation restricting access to legally privileged material. So where, for example, such material is protected by provisions in PACE, the powers in Part III cannot be used to circumvent those safeguards since the authorities will not be permitted access to protected material which is subject to legal privilege. Where there are already safeguards in place in the underlying powers, they are not weakened by the Bill.
  Then there is the question of material that turns out on decryption to be legally privileged. We deal with this in the codes. Again, I should point out that these are only preliminary drafts. If material is revealed to be protected in law so that the underlying power would not allow access to it, that material should not become available to law enforcement. I hope that that reassures the noble Lord.
  Lord Cope of Berkeley: My Lords, indeed it does. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Lord Cope of Berkeley Lord Cope of Berkeley moved Amendment No. 54A:
  Page 54, line 7, at end insert-
  ("( ) Notwithstanding the generality of this section, for the purpose of requiring any person to provide assistance in relation to a notice issued under this section the person to whom it is addressed may

  (a) serve a copy of the notice on such persons as he considers may be able to provide such assistance; or

  (b) make arrangements under which a copy of it is to be or may be so served.")

  The noble Lord said: My Lords, perhaps I may, first, apologise to the House for the fact that this is a manuscript amendment that we are slipping in here for a brief discussion. I received a letter this morning from the Post Office which raises the following point, and it seemed to me to be important to place it before your Lordships.
  As I am sure that many of your Lordships know, the Post Office has nowadays a ViaCode service, which is the UK's first secure electronic commerce service and was launched by the Royal Mail last year. It therefore expects to be in a position of having to respond to notices under Part III of the Bill. Under Clause 47, the notices would normally be served on a member of the board of directors, but there are no provisions for passing on the notice to others to enable compliance. There are such provisions under Part I but not in this part of the Bill.
  If the notice contains, as it presumably will, a non-disclosure provision, the director may find himself in the dilemma of facing penalties either for failing to comply or for failing to keep the notice secret if he is not in a personal position to be able to comply with the notice. It seems to me and to the Post Office that if all reasonable efforts have been made to deal with such a notice—and, where appropriate, to keep it secret within the organisation—the director should not be faced with this particular Morton's Fork. The punishment for the offence can be imprisonment. To be imprisoned either way round seems to be a peculiar difficulty in which we might place directors, not just of the Post Office but also of many other companies. I believe that the Post Office has a good point. I beg to move.
  Lord Bach: My Lords, we understand the intent of the amendment and know that there is continuing concern about the extent to which a tipping-off offence will come into play. Indeed, we shall address that matter in a little more detail in tomorrow's proceedings. We believe that this amendment stems from the draft codes of practice, as published on Monday. The preliminary draft code recognises at paragraph 6.9 on page 16 that a senior person in an organisation served with a notice may need assistance, either technical or otherwise, from within that organisation, or another, in order to comply with the terms of the notice.
  The code goes on to say that those serving the notice should be aware of that fact and, in so far as is practicable, should ascertain in advance to whom it is "reasonable" to permit a disclosure to be made. We should always bear in mind that this issue comes into prominence only once the conditions for the imposition of a secrecy requirement have been met. The conditions, which are considerable, are set out in Clause 52.
  Once a secrecy requirement has been imposed, the person serving the notice and the requirement must take reasonable steps to ascertain to whom disclosure could be made in order to give effect to the notice. The code states that these details should be noted on the relevant disclosure notice for the avoidance of any doubt. These are significant matters, which we have

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  sought to address in the preliminary draft code. We shall, of course, be willing to address them further and more specifically, if that is what we are advised to do between now and the time that the codes are brought back for affirmative resolution by Parliament.
  At this stage we resist the notion that the recipient of the notice may himself determine without any reference to the person who served the notice who it will be reasonable for him to copy the notice on to. The imposition of a secrecy requirement will not be a trivial matter. Certain significant thresholds will have to be met. In the event that these thresholds are met, it will be important to keep an element of control over onward disclosure of these notices. It will be perfectly possible for the recipient of the notice to come back to the person who served it upon him to clarify that he can disclose the matter further to effect the notice. That is provided for in Clause 52(9).
  However, we cannot go that one step further to permit the person who is in receipt of a notice to take it into his own hands to organise disclosure. That would
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  seem to eat away at the very heart of the secrecy requirement. I hope that noble Lords appreciate the importance of the secrecy requirement in certain instances. I invite the noble Lord to withdraw the amendment.
  Lord Cope of Berkeley: My Lords, I certainly appreciate the importance of the secrecy requirement. I shall ponder that instructive reply. I hope that I shall have the opportunity to ponder it before we reach the later amendments to which the noble Lord referred. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Lord Bach: My Lords, I beg to move that consideration on Report be now adjourned.
  Moved accordingly and, on Question, Motion agreed to.
  House adjourned at twenty-nine minutes before midnight.