HL Deb 12 July 2000 vol 615 cc290-9

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

  1. (a) up to six members appointed by the Secretary of State from among persons affected by section 12 of this Act, and
  2. (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 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 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 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 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 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 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.

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
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.
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.

Moved accordingly, and, on Question, Motion agreed.