Lords Sitting of 12 June 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 Birmingham.

HIV/AIDS: Awareness Campaigns
Baroness Massey of Darwenasked Her Majesty's Government:
What priority they are giving to public health awareness campaigns relating to HIV and AIDS.
The Parliamentary Under-Secretary of State, Department of Health (Lord Hunt of Kings Heath): My Lords, we are committed to funding health promotion work for groups most at risk of HIV, and the general population. A budget of £3 million has been allocated for sexual health promotion work for the year 2000–01, including HIV/AIDS health promotion.
Baroness Massey of Darwen: My Lords, I thank my noble friend the Minister for his reply. He may remember earlier campaigns in the 1980s on HIV awareness featuring icebergs and gravestones, some of which were fairly incomprehensible and not very relevant. Can my noble friend say how specific groups will be targeted for HIV awareness campaigns, such as young people and ethnic minority groups?
Lord Hunt of Kings Heath: My Lords, my noble friend is right to suggest that for any public awareness campaign to be effective it needs to be targeted at the various groups concerned. Some of the material that is being funded by the Department of Health is already so targeted. I should mention in particular the work on CHAPS for gay men and work with Enfield and Haringey Health Authority for African communities. As far as concerns my noble friend's more general point, I can tell her that the sexual health and AIDS strategy that is now being developed will of course pick up those issues.
Lord Clement-Jones: My Lords, I welcome the fact that the sexual health strategy is being combined with the HIV/ AIDS strategy. Clearly we hope that that will be produced in a very short space of time. I was lucky enough to be invited to visit a group of young people infected with HIV/AIDS. They wrote back to me saying how much they appreciated being able to meet parliamentarians and thereby understand the political processes. They also said:
"However we feel, from our own experiences, that HIV is still left in the closet' and we would like to see HIV-AIDS being taught in schools to raise the awareness of other people our age and younger".
Will the Minister include that suggestion in his plans?
Lord Hunt of Kings Heath: My Lords, the noble Lord raises a most important point. As part of the strategy that is being developed, we shall be looking very closely at the most effective forms of communication with young people. If we can give as much information as possible in as sensitive a way as possible, I believe that we can do much to remove the stigma of HIV/AIDS, which is so crucial to the success of future prevention programmes and to securing a more tolerant society.
Baroness Rendell of Babergh: My Lords, does my noble friend agree that young people find it notoriously difficult to accept health warnings? Indeed, we know this from their reaction towards campaigns aimed at stopping youngsters from smoking. Therefore, does my noble friend agree that any campaign, or anything in the nature of posters and advertisements in newspapers, must be particularly sensitive and involve a psychological approach to young people's feelings and problems?
Lord Hunt of Kings Heath: Yes, my Lords. I very much agree with my noble friend. Past experience with health promotion campaigns over many years has shown that, unless they are developed with young people in mind, they very often fail. When it comes to young people, I am convinced that the development of our strategy will enable us to ensure that the focus is both sensitive and informative. It must also ensure that the message gets across to young people.
Baroness Gardner of Parkes: My Lords, following the supplementary question from the noble Baroness, Lady Rendell, I sat on the all-party investigation into AIDS a year or two ago. It was made very clear to us then that many of these groups have almost their own language and terminology. Indeed, literature based on such language is much more appreciated and effective. Can the Minister assure us that he will take such matters into consideration?
Lord Hunt of Kings Heath: My Lords, the noble Baroness may recall that too, sat on the all-party group's inquiry on AIDS. It was an extraordinary and moving occasion to have appear before us witnesses from so many different groups, especially young people. They certainly made a big impact on the Government's thinking about the way that we should develop programmes in the future. Yes, I do agree with the noble Baroness. Some of the campaigns that have already been developed—for example, the recent television advert entitled, "Clem and Lydia"—very much took the point that, if we are to get through to young people, we must speak their language.
Lord Morris of Manchester: My Lords, my noble friend is aware of my special interest as president of the Haemophilia Society. Can he help me by updating us now on the number of people with haemophilia who, having been infected with HIV by their NHS treatment, have since died of AIDS; and how this compares with the number who, after being infected with Hepatitis C, have since died of cancer of the liver?
Lord Hunt of Kings Heath: My Lords, I do not have the exact information to hand. However, I am very much aware of my noble friend's concerns in this area. As far as concerns people suffering from haemophilia, this Government are determined to ensure that they receive the most appropriate services possible. I am shortly to meet directors of the haemophilia centres to talk through such matters with them.
Baroness Thomas of Walliswood: My Lords, bearing in mind the rate of growth of HIV and AIDS among heterosexuals, what guidance is given to people travelling abroad, and in particular people travelling to sub-Saharan Africa?
Lord Hunt of Kings Heath: My Lords, the noble Baroness is right to raise that issue. The latest figures I have for 1999 show that the number of new diagnoses among heterosexuals exceeded those among gay and bisexual men. For those who have been classified by place of infection, 77 per cent were infected in Africa. As regards any future targeted prevention programme, we shall have to think carefully about how best to get messages across, particularly in the context of people travelling abroad. That is the whole purpose of developing a sexual HIV/AIDS strategy. It is a matter that we shall clearly need to reflect upon.
Earl Howe: My Lords, am I correct in believing that English health authorities between them submit 100 annual reports to the Department of Health on the prevention and treatment of AIDS under the AIDS (Control) Act 1987, and that these reports are not consolidated in any way? Is that not unsatisfactory? Would it not be better for the Department of Health to publish a single report to give an overview of HIV/ AIDS prevention and treatment across the country as a whole?
Lord Hunt of Kings Heath: My Lords, there is no doubt that health authorities have a crucial role to play in the development of effective strategies at local level. Approximately £54 million is allocated to health authorities for the NHS HIV prevention budget. It is important that in reflecting on how successful those prevention budgets are, there is an effective mechanism for reviewing performance and progress. I do not wish to commit myself on whether collating the returns from health authorities in one annual report is the right direction to take. However, I am perfectly prepared to consider that. It is right to consider that matter alongside the development of the new strategy.

Animals in Transit: EU Welfare Rules
2.44 p.m.
Lord Elliott of Morpethasked Her Majesty's Government:
What steps they plan to take to persuade other European Union member states rigorously to enforce in their territory the provisions of Council
1366
Directive 91/628/EEC on the protection of animals during transport, in respect of lambs and sheep which are being transported from the United Kingdom to or through other member states.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Baroness Hayman): My Lords, the European Commission is responsible for ensuring that EU legislation on animal welfare and transport is fully implemented and properly enforced by all EU member states. High animal welfare standards are important to the Government. We continue to press the Commission to take action to ensure that it meets its obligations in this respect. We shall also take an active role in EU and other institutions to encourage best welfare practice and discuss our concerns with individual EU member states whenever it is necessary to do so.
Lord Elliott of Morpeth: My Lords, I am grateful for that reply. However, does the Minister recall—I am sure she must—that when the directive that we are considering was introduced in 1995 all member states in the European Union welcomed it because it suggested that at long last there would be some ease in the suffering of animals having to undergo long journeys on their way to slaughter in various parts of Europe? Is the noble Baroness aware that the responsible body, Compassion in World Farming, has recently conducted an investigation over 18 months and has proved beyond any question that most European countries ignore this regulation, and that in consequence suffering has greatly increased? The noble Baroness rightly mentioned the European Commission. I believe that it is due to review this regulation. Will the noble Baroness please ensure that when the Commission's report comes before the European Agriculture Committee, the UK will use its strongest endeavour to seek a fundamental change from transportation of live animals to trade in meat?
Baroness Hayman: My Lords, I am aware of the issues that the noble Lord raises. Certainly the Government would prefer to see a trade in meat rather than live animals. As the noble Lord said, the Commission has started work on a review of the directive. We intend to press our view as regards the preferability of the carcass trade over the export of live animals. My right honourable friend the Minister wrote to Commissioner Byrne in February restating our deep concern about the failure of other member states to enforce the law as it is at present. The Commission is looking hard at ways of improving enforcement. It has initiated a series of working groups in which we have been able to stress the importance that we attach to improvements in the area. One of the groups is due to meet this week. We shall continue to emphasise the issues that the noble Lord rightly highlights.
Baroness Mallalieu: My Lords, the noble Baroness has said again that the Government are anxious to encourage carcass trade as opposed to live exports. The Government have called for that since the election

1367
and indeed well before it. Yet the Government's charging policy for inspectors of small abattoirs has the effect of closing down local abattoirs and causes animals to have to travel further, both in this country and overseas. What have the Government done during their time in office to bring about some improvement and some increase in the carcass trade?
Baroness Hayman: My Lords, as my noble friend will be aware, the review of charging policy for abattoirs is being undertaken at the moment by the Food Standards Agency. Earlier I outlined the view that we have tried to promulgate within Europe about the preferability of carcass trade. As regards trying to ensure that carcass trade is supported within this country, last week in your Lordships' House I answered a Starred Question about what we are doing to try to facilitate the export of whole unsplit carcasses to France—because that is what the market prefers—for cutting in that country. That is exactly the kind of measure which will support a carcass trade rather than any other.
Lord Monro of Langholm: My Lords, many farmers will feel that the Minister has not gone anything like far enough in her response today. They rightly feel that the farming industry in this country is penalised because farmers on the Continent can do whatever they like and no one seems to enforce any of the regulations. Can the noble Baroness say how many prosecutions—successful or otherwise—have been brought on the Continent since the regulations were introduced in 1995?
Baroness Hayman: My Lords, I am afraid that I do not have those figures with me. I certainly undertake to try to find them and to write to the noble Lord. But I outlined the work that we have done in terms of raising this issue with Commissioner Byrne. I can tell the noble Lord that the Swedish agriculture minister has now echoed our concern by requesting a debate at the June Agriculture Council on what should be done about the widespread non-observance of the welfare-in-transit rules. We shall be supporting that Swedish initiative. Equally, the action plan on farming pointed out our recognition that we needed to do more on this issue—not only in the EU but in an international context—and that we shall look at what we can do to support those with high animal welfare standards. I do not accept the charge that we have not acted in this area.
Lord Clinton-Davis: My Lords, when will the Commission complete its work in relation to the working parties that have been established? Does the Minister agree that it is not good enough that the Commission should buy time in order to deal with this urgent matter and that there is an important requirement on the Commission to produce a definitive result?
Baroness Hayman: My Lords, I agree with my noble friend. That is why we are pleased that three meetings of the working groups have taken place already—there
1368
will be another one this week—to improve enforcement in this area. Equally, it is important that a review of the directive overall is undertaken. The Commission has now been stirred into taking that action. We have had a positive response to my right honourable friend's letter from Commissioner Byrne and we hope to see action taken soon. The commissioner made it clear that he, too, is unhappy with the current position as a reflection of the importance that animal welfare issues should be accorded within the EU.
Baroness Miller of Chilthorne Domer: My Lords, although, of course, we should be pressing the EU to make reforms, is it the case that the Government have not commissioned any study into transport issues in this country since the closure of so many abattoirs? Will the Minister consider initiating a study into animal welfare in this country before we teach our overseas friends about them?
Baroness Hayman: My Lords, I am not sure that we need to commission a study. When the review of abattoirs for the over-30 months scheme was undertaken, the issues of the effect on journey times and the importance of enforcing the strict regulations on journey times that we have in this country were considered. We have regulations in this country and we ensure that they are complied with.
Noble Lords: Next question.
The Lord Privy Seal (Baroness Jay of Paddington): My Lords, we have now reached 17 minutes which, as the House knows, really means 18 minutes. I am sure that there is as much interest in prisons and pigeons, which I believe are the subjects of the next two Questions.

Prison and Probation Services Inspectorates
2.53 p.m.
Lord Hurd of Westwellasked Her Majesty's Government:
Whether they have yet reached a decision on the future of the inspectorates for prisons and the probation service.
The Parliamentary Under-Secretary of State, Home Office (Lord Bassam of Brighton): No, my Lords. We are considering how best to ensure that the arrangements for inspection of the prison and probation services support closer working between the services as well as ensuring that the individual services continue to be inspected rigorously and independently, as they have been. I shall be making a further statement to your Lordships on this in due course.
Lord Hurd of Westwell: My Lords, I am grateful to the Minister for that reply. Does he accept that there

1369
is a link between this Question and the future of Her Majesty's present Chief Inspector of Prisons, Sir David Ramsbotham? At a time when there is a good deal of discussion inside all political parties about sending yet more people to prison without any evident understanding of the state of our prisons today, would it not be a mistake to take steps which silenced the voice of Her Majesty's present inspector, Sir David Ramsbotham, because he—prison by prison, report by report—tells us what is happening in our prisons in a voice which is clear and strong and, above all, independent?
Lord Bassam of Brighton: My Lords, I agree with the noble Lord's assertion that Sir David Ramsbotham has done an excellent job in reporting on the state of our prisons. He has been robust, independent and forthright. He might not always say things with which we feel entirely comfortable, but he has the honesty and integrity that should go with his post and he does a very good job indeed. It is not the Government's intention to undermine that independence of spirit in any way, shape or form. We intend simply to ensure that whatever we do contributes towards driving up standards in prisons and in the Probation Service, as in all other services. That is our intention in looking at the ways in which the two inspectorates work.
Lord Quirk: My Lords, can the Minister assure the House that the education and training programmes, so resolutely and consistently supported by Sir David Ramsbotham as the best hope of rehabilitation, will continue to be at the forefront of government policy?
Lord Bassam of Brighton: My Lords, I am more than happy to give that assurance. Sir David Ramsbotham has in particular highlighted those important elements in prison regimes. It is, and has been, our intention to ensure that training and education are provided. They are central to the constructive, well worked out regimes that enable offenders to return to a normal life and to take up a more honest, law-abiding existence when they come out of prison. That is our intention and our policy objective—and we are working very hard towards achieving that end.
Lord Acton: My Lords, can the Minister say how much longer Sir David Ramsbotham's contract has to run and whether he is eligible to be reappointed?
Lord Bassam of Brighton: My Lords, the noble Lord will probably be aware that my right honourable friend the Home Secretary recently announced that Sir David Ramsbotham's term has been extended by a further eight months until July 2001. His eligibility to continue in post is not in question. This exercise is simply to ensure that we get the best of both worlds when looking at the future shape of the prison and probation inspectorates. That is why the two terms have been run together to conclude at the same point in time. It is for that reason that I made it clear at the outset that I would be bringing forward a further report to your Lordships' House.
Lord Harris of Greenwich: My Lords, is the Minister aware that many of us have a great deal of sympathy with the point made by the noble Lord, Lord Hurd? Is he further aware that any proposal to merge the prison inspectorate with that dealing with the Probation Service would be fiercely opposed by many in this House? The merger of the two inspectorates would undoubtedly have the effect of undermining the strong position of the Chief Inspector of Prisons.
Lord Bassam of Brighton: My Lords, perhaps I should reiterate the point that it is not our intention to do anything that would undermine the independence or effectiveness of the Chief Inspector of the Prison Service in any way, shape or form—or, for that matter, of the Probation Service. I suggest that the noble Lord should ponder the point that issues of sentencing, combination orders, flexible punishments, throughcare, and the CARATS programme—all regimes that attempt to address offending behaviour, and in particular the offending behaviour of those with drugs or alcohol abuse problems—are properly concerns of the inspectorate. Looking at different ways in which the probation inspectorate and the prisons inspectorate may work together with that independence and robustness of nature will help us to improve the regime in prison and the treatment of offenders outside prison.
Lord Elton: My Lords, surely the way to keep the closeness between the inspectorates is by close conversations between the inspectors, not by turning their appointments into one post. Is the Minister aware that on this side of the House, among Members with whom I am familiar, there is a strong feeling that to reduce or dilute the authority of the Chief Inspector of Prisons by giving him another job—that of looking after the Probation Service—would reduce his authority? It is most important that whoever takes the post shall have absolute security of tenure during his contract so that he may give his opinions—however unpopular—without fear.
Lord Bassam of Brighton: My Lords, I take to heart the comments made by the noble Lord. They are both well meant and well measured. We do not wish to dilute or in any way undermine the position of the Chief Inspector of Prisons. That is not the intention of the Government. We need a robust and genuinely independent inspectorate. Sir David has done a splendid job in that regard and I trust that he will continue so to do. His reports are widely circulated; they are also widely read and well understood. Their importance should not be undermined in any way.

Trafalgar Square: Feral Pigeons
3 p.m.
Baroness Gardner of Parkesasked Government:
What action they propose to deal public health posed by feral pigeons Trafalgar Square.
Lord McIntosh of Haringey: My Lords, no significant risk to public health through casual contact with feral pigeons has been proved either in Trafalgar Square or elsewhere. Her Majesty's Government therefore do not propose to take any action on the issue.
Baroness Gardner of Parkes: My Lords, I thank the noble Lord for that Answer. However, I should point out that his response appears totally to contradict the statement made by Dr Tim Wreghitt of the Public Health Laboratory Service, who said that 60 per cent of pigeons are infected with disease. He further stated that, "inhaling dust from dried faeces can give you an infection".
Is the noble Lord also aware that a South Yorkshire coroner has warned against people coming into contact with feral pigeons? He pointed out the particular problems caused by pigeons in Trafalgar Square. Given that the noble Lord's department issues licences to enable people to sell pigeon food, would he consider changing over to issuing licences for the sale of disposable face masks in order to help those licensees to retain their livelihoods?
Lord McIntosh of Haringey: My Lords, advice from our veterinary team states that although diseases are carried by birds, those diseases are likely to be conveyed to human beings only when they are in prolonged contact with pigeons; in enclosed spaces or in the presence of dust from feathers or guano; and when eating food contaminated by pigeon droppings. None of those conditions applies in Trafalgar Square. For those reasons, we do not think that the South Yorkshire coroner was right to come to such a conclusion as regards Trafalgar Square as a result of hearing a case concerning extrinsic allergic alveolitis which had been reported in the local area. Under the circumstances, no, we do not take the view that the last remaining licence for selling pigeon food in Trafalgar Square should be withdrawn. It will in any case expire on 30th September. After that the responsibility for renewal will fall to the Mayor for London.
Baroness Trumpington: My Lords, although I am entirely in favour of private enterprise, does the noble Lord agree that a health risk could be posed from the practice carried out by some who trap the pigeons with nets and then flog them to restaurants? I do not believe that eating Trafalgar Square pigeons can be good for one's health, or at least not for mine.
Lord. McIntosh of Haringey: My Lords, is the noble Baroness suggesting that restaurants serve pigeons from Trafalgar Square?
Baroness Trumpington: My Lords, yes.
Lord McIntosh of Haringey: My Lords, I am appalled at that suggestion. I should have thought that they would be too tough and taste too unpleasant.
Viscount Falkland: My Lords, does the noble Lord agree that feral pigeons form as much a part of the
1372
London scene as do red buses and London taxi cabs? Surely the health of citizens and visitors is affected more by the emissions from those vehicles than by the feral pigeons?
Lord McIntosh of Haringey: My Lords, I do not think that under any circumstances the atmosphere in Trafalgar Square would be conducive to good public health. However, the noble Viscount is quite right. In 1996 a study was carried out on the pigeons in Trafalgar Square. The recommendation at the time was that steps should be taken to reduce the pigeon population. However, there was a public outcry and any suggestion that the licence should be taken away from the last pigeon foodseller found no popularity.
Lord Mackay of Ardbrecknish: My Lords, while reflecting on the situation in Trafalgar Square, is there any truth in the rumour that the Government are contemplating erecting a statue of the Prime Minister on the vacant plinth in order to test whether the feral pigeons have a higher regard for him than does the Women's Institute?
Lord McIntosh of Haringey: My Lords, I answer serious questions.
Baroness Gardner of Parkes: My Lords, in view of the noble Lord's response to the question put by my noble friend Lady Trumpington, does he know that a court case was held because a man was trapping pigeons in the square? Many felt that he should have been applauded rather than charged for so doing.
Lord McIntosh of Haringey: My Lords, that rather depends on the reason why he was trapping the pigeons. If he was trapping them for sport, I dare say that there are those sitting on the Opposition Benches who would defend that practice on other grounds. If he was trapping them to sell as food in restaurants, I repeat what I said to the noble Baroness, Lady Trumpington; it seems to be a very unpleasant idea.
Lord Jenkins of Putney: My Lords, as one who has been treated in a most unseemly fashion by the pigeons in Trafalgar Square, may I stand up for their right to do the same to anyone who follows in my footsteps?
Lord McIntosh of Haringey: My Lords, for his age, my noble friend has a very fine head of hair.

Business
3.5 p.m.
Lord Carter: My Lords, after Consideration of Commons Amendments to the Financial Services and Markets Bill, my noble friend Lord Bassam of Brighton will, with the leave of the House, repeat a Statement which is being made in another place on hunting with dogs.

Licensing (Young Persons) Bill
Brought from the Commons; read a first time, and to be printed.
Railtrack (Waverley Station) Order Confirmation Bill
Considered on Report.

Financial Services and Markets Bill
3.6 p.m.
Lord McIntosh of Haringey: My Lords, I beg to move that the Commons amendments be now considered.
Moved, That the Commons amendments be now considered.—(Lord McIntosh of Haringey.)
On Question, Motion agreed to.
AMENDMENT TO BE MOVED ON CONSIDERATION OF COMMONS AMENDMENTS
[The page and line numbers refer to HL Bill 32 as first printed for the Lords.]
LORDS AMENDMENT
180 After Clause 149, insert the following new clause—
("CHAPTER IIA
POLICIES RELATING TO TAKEOVER REGULATION
MARKET ABUSE: BEHAVIOUR CONFORMING WITH CITY CODE
.—(1) Subject to subsections (2) and (3), the Authority is authorised to include in the code issued under section 110 a statement that behaviour of a person which is in conformity with the City Code does not amount to market abuse.
(2) Subsection (1) does not apply in respect of behaviour which satisfies the condition in section 109(2)(a).
(3) A statement made under subsection (1) may include such conditions and limitations as the Authority considers appropriate, including conditions and limitations specifying the behaviour and the persons covered by the statement.
(4) The Authority may at any time alter or replace any statement made under subsection (1).
(5) If a person behaves in a way which fulfils the requirements of any statement included pursuant to subsection (1) in the code issued under section 110, that behaviour of his is to be taken, for the purposes of this Act, as not amounting to market abuse.
(6) In this section—
"behaviour of a person which is in conformity with the City Code" means behaviour of a person which in the opinion of the Panel conforms with the responsibilities imposed on that person by the City Code;
"the opinion of the Panel" includes any revised opinion formed by the Panel as a result of any further consideration;
"City Code" means the City Code on Takeovers and Mergers issued by the Panel as applied by the Panel and as amended from time to time by the Panel;
1374
"the Panel" means the Panel on Takeovers and Mergers.")
The Commons disagreed to this Amendment but proposed the following amendment in lieu thereof—
COMMONS AMENDMENT
180A After Clause 110, insert the following new clause—
PROVISIONS INCLUDED IN THE AUTHORITY'S CODE BY REFERENCE TO THE CITY CODE
(".—(1) The Authority may include in the code issued by it under section 110 ("the Authority's code") provision to the effect that in its opinion behaviour conforming with the City Code—

(a) does not amount to market abuse:

(b) does not amount to market abuse in specified circumstances; or

(c) does not amount to market abuse if engaged in by a specified description of person.

(2) But the Treasury's approval is required before any such provision may be included in the Authority's code.
(3) If the Authority's code includes provision of a kind authorised by subsection (1), the Authority must keep itself informed of the way in which the Panel on Takeovers and Mergers interprets and administers the relevant provisions of the City Code.
(4) "City Code" means the City Code on Takeovers and Mergers issued by the Panel as it has effect at the time when the behaviour occurs.
(5) "Specified" means specified in the Authority's code.").
Lord McIntosh of Haringey: My Lords, I beg to move that the House do not insist on their Amendment No. 180 to which the Commons have disagreed and do agree with the Commons in their Amendment No. 180A in lieu thereof.
I do not propose to detain the House with a detailed discussion of the background to these amendments. It is well-trodden ground and it has received plentiful coverage in the press. However, in order to avoid any doubt, I shall reiterate the Government's full support for the work done by the Takeover Panel in overseeing the process and conduct of takeovers. The panel carries out an important job and does it extremely well. We want to see that continue.
Contrary to some misleading reports that have appeared in the press, this is not a Bill to regulate takeovers. Our amendment does not give the FSA any powers to interfere in the work of the panel nor does it require the panel to seek the views of the FSA before taking action. At earlier stages we gave careful consideration to the arguments concerning the Takeover Panel. We concluded that nothing needed to be done. Indeed, it remains our view that the Bill, as introduced to your Lordships' House, would not have affected the position of the panel. The FSA intends to adopt robust policies which will keep it out of tactical manoeuvres by parties to a takeover. We are satisfied that those policies will work well.
It is important to remember that there is at present a measure of overlap. It exists between, on the one hand, the panel's rules and the regulatory regime and criminal offences of market manipulation and misleading statements on the other. To date, this has not caused any problems. The courts have taken a

1375
strong line, refraining from interfering during the course of takeovers. The noble and learned Lord, Lord Donaldson of Lymington, referred to that in the debate at Third Reading when he said that the courts would give no injunctive relief. We have no reason to suppose that in the future the courts will take a different view.
However, we have responded to the arguments that have been put forward in the House. In light of those arguments, we judged it prudent and sensible to propose a "safe harbour" amendment for the Bill. We did so at Third Reading. The amendment then brought forward would have allowed the FSA to provide a safe harbour for behaviour in conformity with all or part of the City code produced by the panel. However, again, concerns were expressed at Third Reading that the FSA should not be able unilaterally to impose its own interpretation, but in essence should be guided by the panel's interpretation.
We have addressed those concerns. Although we cannot allow Amendment No. 180 to remain part of the Bill, for reasons that I shall explain, we have made important improvements to the amendment previously tabled in this House.
Perhaps I may repeat what I said at Third Reading:
"Given … the nature of the [City] code and the panel's role in interpreting and applying it, I would naturally expect the FSA to take the panel's view before it decided whether behaviour fell within the safe harbour which the government amendment would enable it to provide. It would be very foolish if it did not ֵ I would expect the tribunal and, if the matter came before them, the higher courts, to attach due weight to the panel's views in accordance with established case law"—[Official Report, 18/5/00; col. 403.]
Our Amendment No. 180A will ensure that that happens. The FSA will be under a statutory duty to keep itself informed of the way in which the panel interprets and administers the relevant provisions of the code. This will mean that the FSA will have to have arrangements in place for seeking the panel's views on whether behaviour is in conformity with the City code. It will have to take this fully into account when deciding whether to act in cases of possible market abuse. The panel's views will be bound to carry a lot of weight with the FSA, the tribunal and the courts.
This issue was one of great importance in our earlier debates. I am pleased to have found a form of words which meet the concerns expressed by the noble Lord, Lord Newby, and others. This the right result. To go further would be to go too far and to make the panel the final arbiter of market abuse during takeovers. Apart from being objectionable as a matter of principle, this would also have consequences for the panel which might cause it a great deal of concern if it really thought about it. Under our amendment, the decision on whether behaviour amounts to market abuse will always rest with the FSA, the statutory regulator, and ultimately with the independent tribunal to be established under the Bill. Amendment No. 180, on the other hand, provides a safe harbour for behaviour which in the panel's opinion conforms with the City code. This would give the panel the power to decide that a person has not engaged in market abuse.
1376
In another place, the Liberal Democrat spokesman, Dr Vincent Cable, having listened to the arguments on both sides, supported our approach. He said:
"If there is a conflict of jurisdiction and a choice has to be made, the FSA should prevail. The amendments make that clear so that the uncertainty and ambiguity about which Conservative Members have expressed concern do not arise".
He went on to say, before his party joined the Government in the Division Lobby, that,
"The peers' judgment"—
that is, on our latest amendment—
"was that there was no need to raise further objections because the fairness point had been accepted, the jurisdiction had been clearly defined and the work of the takeover panel had been incorporated".—[Official Report, Commons, 5/6/00; col. 100.]
As I have said previously, the issue of principle is simple. Should the ultimate decision on whether action constitutes market abuse, as defined in the Bill, rest with the statutory regulator, the FSA and the tribunal, or with the non-statutory Takeover Panel? The answer is equally straightforward. It must be right, in what I should expect to be the very rare event of a disagreement between the FSA and the panel, that the last word should rest with the FSA and the independent tribunal.
If Amendment No. 180 were allowed to remain in the Bill, I believe that, having taken advice at the highest level, there would be important consequences, particularly in terms of the European Convention on Human Rights, which were not appreciated by those who drafted the amendment. Giving the panel the final right to decide whether particular behaviour amounted to market abuse would, in effect, give it statutory functions. These functions would involve the determination of civil rights, and even possibly what would be regarded as criminal charges under the European convention.
Throughout the passage of the Bill, the Opposition have rightly insisted—the noble Lord, Lord Kingsland, has been admirably persistent on this point—that in exercising such functions the FSA should be fully accountable and that there should be the safeguard of access to an independent tribunal. We have ensured that the market abuse regime is fair, transparent and certain, with appropriate safeguards set out on the face of the Bill. These include the safeguards necessary to ensure compliance with the ECHR where what is at issue is the determination of criminal liability.
Let me make it clear that I am not questioning the arrangements for the accountability of the panel in the usual context in which it operates. This simply means that they are not appropriate here. They were never designed to deal with the determination of whether market abuse has occurred under Part VIII of the Bill. Against that background, I am sure that the amendment proposed in another place is the right one to deal with the concerns that have been expressed. Amendment No. 180A will ensure that if problems arise in this area—we are confident that they will not—adequate and effective safe harbours can be provided. That will be done without compromising the position of the panel or the single statutory regulator, the FSA.

1377
I do not know whether the noble Lord, Lord Alexander, would like me to speak to his amendment now or to reserve my remarks until the end of the debate. The noble Lord indicates that he would like me to reserve my remarks. I commend to the House the proposed amendment made in another place in lieu of Amendment No. 180.
Moved, That the House do not insist on their Amendment No. 180 to which the Commons have disagreed and do agree with the Commons in their Amendment No. 180A in lieu thereof.—(Lord McIntosh of Haringey.)
AMENDMENT TO COMMONS AMENDMENT NO. 180A
180B Line 8, at end insert—
("and such provision may specify that behaviour conforming with the City Code is behaviour which is considered by the Panel on Takeovers and Mergers as conforming with the City Code").
3.15 p.m.
Lord Alexander of Weedon: My Lords, I beg to move Amendment No. 180B, as an amendment to Commons Amendment No. 180A.
This is a long, technical, regulatory Bill, but this is not an arid technical point. I believe—as, unanimously, does everyone who works in the City—that it is an important point of principle for your Lordships to consider. Can we preserve the well established, effective current system under which the Takeover Panel does its work? Or are we—as the government amendment would do, in spite of the Minister's eloquence—to risk undermining the panel's authority, to open the door to the disruption of the takeover process and stifle the work of the panel in the rampant bindweed of tactical legal manoeuvres? As takeover activity is a significant part of business in financial markets, the issue is one of considerable importance to shareholders, great and small.
I am well aware that the Conservative Party supports my amendment. But I in no sense raise the issue as a party-political one. I do so as a former chairman of the panel. I hope that the House will recognise that the success of the panel transcends party politics and affects the strength of City markets to which, or so I believe, all of us are committed.
Perhaps I may briefly remind your Lordships of the history of the panel and its achievements. It was established under aegis of the Bank of England more than 30 years ago and has been consistently supported by the Bank. The impetus for its creation was the need to make sure that all shareholders received equal treatment during takeovers, that they were properly informed of the sometimes complex arguments and that a bid was conducted within an orderly and clear timetable. The panel has to supervise bids to see that parties comply with the well known code and it has to guard, during a bid, against market abuse such as share ramping.
Over the years, the panel has monitored some 7,000 bids. In the last full year alone, it has supervised some 300 proposals. These are not just important to the
1378
Titans of the corporate world; they directly affect pension funds, investment trusts and small shareholders. The panel has a conspicuous record of always being vigilant to see that the interests of small shareholders are not overlooked and that they are fully protected.
No one would pretend that the monitoring of takeover bids is an easy task. The bid process often represents a gladiatorial contest where there is much at stake both for companies and for their investment banking advisers. Powerful company chiefs lay their reputation and their future on the line. Behaviour is tactical. The parties to a bid, as I know from experience, will pursue any course of action within the bounds of law and regulation which may advance their cause. Advisers are paid large fees to be inventive and forceful, and the earning of those fees sometimes depends on their success. They often seek to tough it out with the panel.
In this demanding task the panel has a record of very considerable success. Its processes have been speedy, open, fair and relatively inexpensive. The panel has a tradition of giving firm judgments and properly reasoned decisions. It has always been chaired by a senior lawyer, from the time of Lord Shawcross to that of Sir David Calcutt QC, the present incumbent. It has its own appellate procedure, with an appeal panel invariably chaired by a former senior judge of high standing. The importance that the City attaches to the work is reflected by the willingness of experienced senior figures to take part and to do so at short notice.
There are other merits of the panel system. The code is interpreted flexibly to ensure compliance with the spirit of the rules and not just with the letter. The panel will give rulings in advance of proposed action so as to keep the train on the rails and not just pick up the pieces after the accident. In more than 30 years in the law I have found this the most effective process I have known for the fair and speedy resolution of disputes. Nor, so far as I am aware, has there been a shadow of a suggestion that its procedures have not complied with the European Convention on Human Rights.
May I give your Lordships one illustration of the strengths and virtues of the panel in action? In 1987 there was a contest between Guinness and Argyll, which were vying with each other to acquire the ailing business of Distillers. Some months after the bid was over, Guinness having won, it was discovered that some of its conduct raised concern that there had been market abuse through share support operations. The panel was able to investigate within a matter of months and ordered Guinness to pay almost £80 million by way of compensation. Guinness sought judicial review and claimed that the panel should have taken no action until all the criminal proceedings arising out of the incident had been completed. That would, of course, as was no doubt the intention, have held up action for years. But the Court of Appeal, presided over by the noble and learned Lord, Lord Donaldson, rumbled what the aim was and dismissed the case. That was fortunate, since both criminal and other regulatory

1379
procedures limped on for years. Only the panel was able to take clear, firm and decisive action to give prompt redress to shareholders.
I believe that it has been widely recognised that the effectiveness of panel judgments would be seriously diminished if they could not be promptly enforced. Indeed, in the well known Datafin case the Court of Appeal held precisely for that reason that the panel should not normally be subject to judicial review during the course of a takeover; otherwise, tactical litigation by parties seeking to gain time and disrupt the bid process would be inevitable. Successive governments have recognised the wisdom of that decision by speaking up firmly at Brussels in debates on a European takeover directive to preserve the panel's non-statutory status and so prevent its being sucked into the legalistic procedures of the courts.
The noble Lord the Minister made it clear the last time the issue was before your Lordships, and he has made it clear again today, that the Government fully support the work of the Takeover Panel and that they want it to continue doing the job in the way that it has been doing it. The paradox is that their proposal would in reality foul up the process. As the noble Lord said today, it would allow the panel's decisions to be second-guessed. The FSA, he said, would take them into account. The implication of that is that he is contemplating that it will be second-guessed. That means that the panel will be brought into a legalistic framework from which it has previously been healthily exempt.
That fear has been widely expressed across the City and by a virtually unanimous press in recent weeks. Any participant in a takeover disappointed by the panel's decision could—and the noble Lord appears to suggest that this is a virtue—go over the panel's head to the FSA. Once the FSA had ruled, whichever party did not like its decision would in turn take a taxi and head from Canary Wharf to seek judicial review in the Law Courts in the Strand. The floodgates would be open for tactical manoeuvring, delay and uncertainty. As The Times said very recently,
"the way will be open for almost any company that finds itself in a takeover situation to shriek 'market abuse' and head for the courts where any bid could be barred for months, even years".
The Government's reaction has been extremely curious. They were slow to respond to the panel's concerns and to understand that the argument might have any validity. They now say that they see that it does, for what they have put before your Lordships is an amendment that suggests that behaviour that complies with the City code shall not amount to market abuse. The amendment is a start, but it clearly completely misses the mark. Who is to decide whether there has been compliance? The Government say that the FSA must be the final arbiter, because it is the statutory regulator. I find that response both doctrinaire and perverse. Who will understand the takeover process better—the panel or the FSA? Who has a proven track record of success in this area—the panel or the FSA? Will the panel's authority be undermined if participants know that it is simply a staging post on the road to the FSA?
1380
Nor could the FSA decline requests to second-guess the panel, and the noble Lord does not suggest that it could. The government amendment imposes a clear statutory duty on the FSA to hear the case, and that means that it cannot decline jurisdiction; nor can it in any sense fetter its discretion by saying that it will invariably or normally uphold the panel. After that, whichever party was discontent, if there had been a division of opinion between the panel and the FSA, would seek judicial review from the successors of the noble and learned Lord, Lord Donaldson.
It is no wonder that on the last occasion the noble Lord, Lord Newby, speaking for the Liberal Democrats, said very wisely that he supported
"a form of words that makes it absolutely clear that the interpreter of the City code is indeed the Takeover Panel—it is its code—rather than the FSA".
The noble Lord concluded:
"That is important".—[Official Report, 18/5/00; co1.406.]
I entirely agree with him. Exactly the same principle is at stake today.
When the House considered this issue a few weeks ago your Lordships accepted that a somewhat different amendment would have protected the panel's work. I do not believe that the essential mischief has been cured. My amendment seeks to improve the amendment from the other place, which, as it stands, would undermine the panel's work. I am not suggesting for a moment that your Lordships play indefinite ping-pong with the other place, but it should be given the opportunity to recognise that this amendment is appropriate and indeed necessary to sustain proper City regulation.
"unless this Bill is amended, there will be significant damage to the quality of takeover regulation in the UK. This will in turn damage the reputation of the UK financial markets for integrity and efficiency".
Are these not strong words coming from the most consistently successful of City regulatory bodies? For some time, I hoped that a government who assert that they understand and are committed to business, would respect and heed that view. I hope that the House will do so.
Moved, That Amendment No. 180B, as an amendment to Commons Amendment No. 180A, be agreed to.—(Lord Alexander of Weedon.)
3.30 p.m.
Lord Donaldson of Lymington: My Lords, I agree with and support the amendment of the noble Lord, Lord Alexander. However, I am troubled by a different point; namely, subsection (2) of the Commons amendment. It provides that the FSA cannot exercise this power under the amendment without the consent of the Treasury.
I understand from what has been said in another place and today that there is no criticism of the work of the panel. There is general agreement that the City needs the panel. It is an essential part of its infrastructure. There is general agreement that the panel must be allowed to continue to operate as it now does. I can summarise the two essential operational

1381
requirements of the panel. They are these. First, it must be capable of giving almost instantaneous rulings in the course of a bid. That is the case at present and I do not think that it would be varied by the Government's proposed amendment. The second essential operational requirement is that the rulings must not be capable of challenge in the context of the takeover in which they are given. It is that second requirement which is absolutely vital. At present it is guaranteed by the policy of the courts to which the noble Lord referred. In the context of the suggestion that a statutory body must always have more authority than a non-statutory body, I must point out that the courts were faced with a choice between exercising their own powers—they are certainly as great as those created by a statutory body, and possibly greater—and those of the Takeover Panel. They decided that as long as the Takeover Panel was confined in its proof against attack to what was done in a particular takeover, its authority should prevail.
Perhaps I may use an analogy. In effect the courts were saying that the Takeover Panel is in the same position as a referee in a tennis or football match (with which we are much afflicted at present). It does not mean to say that one cannot review what has happened by means of television and other wonders and by that process prove beyond a doubt that the referee was right or wrong. But if he were wrong, the decision stands. That is what we must have in the context of the panel.
That does not mean that a review of its decisions is impossible or would be unprofitable. That second look in a more leisurely context may enable the FSA, the panel or both to decide that there must be a change in the rules in the future. However, the rulings in the context of the bid must remain inviolate.
That is why I am troubled by subsection (2). The Government, the Treasury, might be minded to say that the panel could exercise permissive powers granted under subsection (1) in any way it likes provided that it maintains the overriding authority of the FSA. If so—I agree with the noble Lord, Lord Alexander—there will be a traffic jam between Canary Wharf and the Strand; and that we cannot have.
We shall have to see. I do not understand why this clause, of all clauses relating to the FSA panel, has to require Treasury consent. Any other provision in the code can be made by the FSA and all it has to do is to tell the Treasury. No doubt it would tell the Treasury in advance and the Treasury would have a view. But that is not the point. It could just make the code and tell the Treasury, but it cannot do so under this provision. Why not? I know that the Economic Secretary to the Treasury in another place stressed that the FSA must be preferred in the case of a conflict because it is a statutory body. The Minister said much the same today. That is what frightens me, even if there is not an amendment today.
Lord Newby: My Lords, in considering these matters it is important to begin by recognising what the government amendment represents; namely, a major
1382
concession by the Government of the safe harbour principle in respect of the provisions of the takeover code. It would not have been introduced if it had not been possible to have close working relations with the Official Opposition with whom we have worked on a number of amendments. It is also worth reminding ourselves that on a number of key issues, whether corporate governance, the role of the practitioner and consumer panel, and other matters we in this House have successfully improved the Bill in a substantial way.
The single principle which now confronts us is not the safe harbour provision but an important matter which arrived in this House at the latest possible stage of our consideration of the Bill; namely, who decides whether the takeover code has been followed in cases of possible market abuse.
The two options are either to argue—as in the Alexander amendment—that the Takeover Panel should always have the final say; or to say—as in the government amendment—that the FSA must keep itself informed about the way in which the panel interprets the code. The government amendment recognises that the Takeover Panel will remain the principal interpreter of a code on a day-to-day basis but, consistently with their view about the primacy of the FSA—it is a view which we, on these Benches, have accepted, in particular in respect of the gatekeeper proposal which was discussed on a number of occasions in this Chamber—that the FSA will have the final word. This amendment is a significant improvement on the amendment which we considered at Third Reading because the role of the panel is recognised on the face of the Bill.
Perhaps I may make one point about referees and umpires. When there is a difficult issue in Rugby League and cricket (as there were as regards a number of run-outs at Lords on Saturday) there is an immediate reference to a second, higher authority—a television replay. While it is always dangerous to take sporting analogies too far, one can argue either way in respect of best practice on the sports field.
The amendment of the noble Lord, Lord Alexander, has the benefit of clarity which, as he kindly pointed out, I sought at Third Reading. However, the amendment inevitably cuts across the principle that at the end of the day the statutory body, the FSA, should prevail over the non-statutory Takeover Panel. The ECHR implications—the noble Lord did not refer to them—became apparent only at a late stage. They could significantly undermine his amendment.
The question before us today is somewhat broader than simply whether the Alexander amendment is technically preferable. It is whether this is an issue on which we wish to initiate a ping-pong procedure with another place. As noble Lords are aware, on these Benches, we have no aversion in principle to sending Bills back to the Commons for a second time. We have done so previously in this Parliament, and we may well do so again before this Session ends. We accept, however, that this power should not be used lightly,

1383
particularly in cases such as this where we support the principle of the Bill and wish to see it on the statute book as soon as possible.
The tests which we have to apply in deciding whether or not a ping pong should be initiated are those of principle and substance. We believe that we should only be prepared to send a Bill back to the Commons on an issue of clear principle and major substance. How then does this issue fare against those tests?
First, on the question of principle, the principle covered by this amendment is whether there should be safe harbour provisions in respect of the takeover code. That is the subject of this amendment, and that is the key concession which has been made. The question of who interprets the code requires a judgment to be made between the rival merits of two bodies—the panel and the FSA—which in any event are required to co-operate closely on the whole question of countering market abuse. In our view, that is a matter of judgment; it is not essentially a matter of principle. The issue, in our view, does not pass the test of being a matter of major principle in the context of the substance of this amendment, namely, safe harbour.
Secondly, how much substance is there in this issue and how great is the difference between the Government's amendment and that proposed by the noble Lord, Lord Alexander of Weedon? It has been our view throughout the debates on this issue that too much has been made of the possible damage which could be caused to the regulatory process in respect of takeovers by the passage of this Bill. Some of the language used in support of the panel's position has, in our view, been exaggerated. I do not believe that it is unanimous City opinion that this House should die in the ditch, back and forth to the Commons, in order to get the Alexander amendment through.
The difference between the amendment proposed by the noble Lord, Lord Alexander, and that of the Government will only have a significant impact on the way in which takeovers are regulated if the FSA and the panel fail to find a sensible modus operandi in dealing with potential market abuse during the conduct of takeovers. There is no reason to believe that they will not do so. We believe that when this Bill is on the statute book it will be possible for the FSA and the panel to reach working arrangements which will minimise the scope for mischievous legal action to gain a tactical advantage during takeover bids. We therefore believe that this issue fails the major substance test.
This Bill has occupied a very large amount of parliamentary time. It has been significantly improved during its passage through your Lordships' House. The time has now come to get it on to the statute book to enable the FSA and the panel to get on with their job. We shall, therefore, not support Amendment No. 180B but will support Amendment No. 180A.
3.45 p.m.
Lord Grabiner: My Lords, for good reason, a very large amount of parliamentary time has been devoted to this Bill, as the noble Lord, Lord Newby, mentioned. The Bill is designed to ensure that the financial services industry in this country is properly regulated by the FSA. The FSA is to be the central building block of the new regime, and there is agreement on all sides that that is the right approach.
The essential feature of the amendment proposed by the noble Lord, Lord Alexander of Weedon, is that its object is to enable the FSA to delegate what are vital regulatory powers to the Takeover Panel, although the Takeover Panel is non-statutory, unregulated and essentially an unaccountable body. Needless to say, I have the highest possible regard for the views of the noble Lord, Lord Alexander, not only on this but on almost every subject. However, I believe that on this occasion his amendment is wrong in principle. The FSA should not delegate its powers to the panel.
It has been said that the Bill in its current form involves some implicit criticism of the panel or suggests that it might not be up to it. I do not believe that that is correct. Everybody agrees that over the past 32 years the panel has done an excellent job. One hopes that it will continue to provide a first-rate service. The problem is that the world has changed. Unfortunately, the days when everyone in the City takeover community knew each other have gone. Virtually all the great houses have been gobbled up by American, Swiss, German or Dutch financial institutions. The amounts of money at stake are fabulous and occasionally unpronounceable.
The powers of the panel are, as they always have been, extremely limited. For example, the panel has no direct power to enforce a simple demand for information. Many of us may regret it, but the truth is that these voluntary arrangements no longer reflect the needs of the market place. This Bill is designed to deal with the new global markets and, through the FSA, to sustain London in particular as a world class financial centre.
It has also been said that the Bill in its current form would be a stimulus to mischievous lawyers' activities. It is said that there will be numerous applications for judicial review and that unjustified or frivolous attempts to frustrate bids or to upset the workings of the market place will be made. I do not accept that there is any force in those arguments. I believe that they are more imagined than real.
The Datafin approach was admirably summarised at an earlier stage of the Bill by its inventor, the noble and learned Lord, Lord Donaldson, with the memorable phrase, "masterly inactivity". The FSA can hardly be convicted of unreasonableness if it seeks to achieve its statutory objectives by non-interference in the fast moving circumstances of the 60-day bid period and against the legal backdrop of the principle established in the Datafin case. The common sense of the principle in the Datafin case will surely prevail in the courts. No doubt someone will wish to test the point against the FSA. So be it. There never was any

1385
form of bullet-proof legislation which could prevent that from happening. Speaking as a professional lawyer, I am delighted that that is the case. Once tested, the validity of the approach of the FSA will, I believe, be vindicated and any uncertainties will disappear.
The other side of this coin is that there will be cases in which the FSA may take the view that it should move in the period during which a bid is taking place. Many of your Lordships will recall the Guinness scandal some 15 years ago, to which the noble Lord, Lord Alexander made reference. If the true facts of that case had emerged in the course of the 60-day period, that would have been an obvious example of market abuse under the Bill.
On that particular point, I digress for a moment. The noble Lord made reference to the Guinness scandal and also to the great success of the panel on that occasion. The panel's conduct in securing a sum of about £80 million for shareholders who had been swindled represented a singularly magnificent achievement in the sense that it had never previously been done nor has it ever subsequently happened. But the truth is that that part of the performance of its role by the panel took place long after the bid period had come to an end, and that is precisely the sort of thing which certainly would not now be dealt with by the panel in any event but would fall precisely within the role of the FSA in dealing with market abuse.
Another example was the bid about three years ago by the Galileo Group for the Co-operative Wholesale Society. Your Lordships may recall that transaction. In that case, an officer of the target company was filmed in a carpark handing over highly sensitive, confidential documents to officers of the predator company. An injunction was granted preventing the predator from using the documents. As a result, the lines of finance for the bid collapsed and the bid was abandoned. That was a case in which the court interfered during the currency of the bid.
It is an example of what would be market abuse under Clause 109. In such a case, one might well expect the FSA to move in the course of the bid. By contrast, it is the kind of case which the panel is not well equipped or designed to deal with, but the FSA would be because of the powers which have been granted to it—or which will be granted to it when the Bill becomes law.
It seems to me that the Bill in its current form, as amended in another place, provides a balanced solution to the problem. It will ensure active co-operation between the FSA and the panel. They will together make operating agreements; they will liase with each other; and they will share information.
I believe that in the usual case—by which I mean the vast majority of takeover bids—things will go on very much as they do today, without interference either from the FSA or from the courts. I believe that we
1386
should adopt that approach and that this House should reject the amendment tabled by the noble Lord, Lord Alexander.
Lord Kingsland: My Lords, I shall be suitably telegraphic. My noble friend Lord Saatchi and I have been speculating on why the noble Lord, Lord Newby, has changed his mind since Third Reading. During the past three months, my noble friend and I have much admired the way in which the noble Lord, Lord Newby, has represented his party in your Lordships' House. We dared to entertain the speculation that his decision not to continue to support was not entirely his own.
However, whatever the basis of the noble Lord's decision, I suggest that he cannot have made it on the merits of the case. The noble Lord, essentially, supported the amendment tabled by my noble friend Lord Alexander at Third Reading; and the Minister told your Lordships today that the Government have not changed their position on the matter.
The truth is that, for whatever reasons, the Liberal Democrats have chosen to turn their backs on this most vital question. Having heard my noble friend Lord Alexander and the noble and learned Lord, Lord Donaldson, none of your Lordships can be in any doubt about the crucial importance of this issue to the City of London, with all that that entails for the economy beyond.
For the Opposition to accept the Government's amendment, that amendment must ensure that safe harbours not only provide for compliance with the text of the code, but also for compliance with the interpretation by the panel of the text of the code in any circumstances arising in the course of a takeover bid. Otherwise, no one—either bidder or defender of a bid—can have any confidence in the guidance issued by the panel.
For those reasons, the Opposition support the amendment introduced, most eloquently, by my noble friend Lord Alexander and to which he brought such authority.
Lord McIntosh of Haringey: My Lords, no one is better qualified than the noble Lord, Lord Alexander, to launch into the encomium which he rightly made about the distinguished history of the Takeover Panel. After all, he knows much of what he speaks from his distinguished personal knowledge. We agree with what he says about the work of the panel and I made that clear at the outset. Nothing I have said, or shall say, will detract from our respect for its work.
However, the noble Lord's amendment is still subject to the same fundamental objection of principle that I have explained. Under the amendment, the FSA, with Treasury approval, would be able to decide—the word used in the amendment is "may"—that the panel should be allowed to determine whether market abuse has taken place. It will be clear from what I said at the

1387
outset that the final determination of whether market abuse has taken place is key to all our arguments on the Bill in this place. The objectionable point of principle and the convention difficulties—to which I referred and noticed were not responded to in any way by the noble Lord, Lord Kingsland, who was so keen on the convention difficulties which he saw elsewhere in the Bill are the same as with Amendment No. 180, to which I have spoken.
I have to say that we cannot conceive of circumstances when the FSA and the Treasury would agree to take that step. We cannot and will not legislate to provide for something which we believe would be wrong. The determination of whether market abuse has been committed amounts to the determination of a civil right. On any analysis, if a safe harbour of the kind provided for in Amendment No. 180B were to be brought into force, the panel would be determining a person's civil rights.
There must be a real question whether the hearings before the panel at which such a decision was taken constitute what is required by Article 6 of the European Convention on Human Rights; that is, a,
"fair and public hearing … by an independent and impartial tribunal established by law".
The panel's success is based on speed, informality and voluntary subjection to its rulings. We do not want to lose that and with the Government's amendments we shall not do so.
It has been argued notably and frequently by the noble Lord, Lord Kingsland, that market abuse is criminal for convention purposes. He went much further than our belief, but nevertheless we have taken into account his arguments and provided for all the protections to convention-proof the market abuse regime for which he asked.
We have taken advice at the highest level. Last summer, we took advice from Sir Sydney Kentridge. We believe that these arguments are overstated, but we thought it prudent to introduce criminal safeguards into the FSA's procedures. If the noble Lord's amendment is carried, will the panel do the same? Will the panel introduce criminal safeguards? It is impossible to conceive how that could happen.
It is clear that the general effect of the amendment would be to make the rules and actions of the panel significantly more justiciable—more open to legal challenge—than they are now. We do not want that to happen. We support the panel's current approach to the regulation of takeovers. We are not prepared to agree to an amendment which, however well intentioned, will in due course undermine the panel. We cannot believe that when it has the chance to take a long, hard look at this latest amendment the panel will want it either.
In introducing the amendment, the noble Lord, Lord Alexander, said that he did not want to see pingpong between this House and another place. This is already ping-pong. This matter has been debated at length during its many stages through this House. It has been returned to another place which has had a
1388
second look at it. I put it to your Lordships that it is not acceptable for us to challenge it, particularly when we are right.
Lord Alexander of Weedon: I was interested in the Minister's peroration. Much as I like him—as I do—and much as I respect him—as I do—I thought it was a bit rich of him to suggest that my amendment would undermine the work of the panel. In so far as the arguments have been put to the Government with tot al clarity, this has been a dialogue of the deaf. Even in his response, the noble Lord indicated a lack of comprehension. Perhaps I may quote from a very experienced financial commentator, who said last week:
"This is a crucial piece of legislation for the City. In particular, the survival of the Takeover Panel as the final arbiter in takeovers is something regarded as essential by the practitioners. It is an institution that works to the benefit not only of investment bankers but everyone. It must be kept".
I am grateful to all noble Lords who have spoken in the debate. I am particularly grateful to the noble and learned Lord, Lord Donaldson. Indeed, a barrister always finds it a considerable comfort when a judge with unrivalled commercial experience agrees with and accepts his argument. It was he who decided that the panel should not have its decisions regularly second-guessed. That is simply what I seek.
The noble Lord, Lord Grabiner, suggested that the panel is unaccountable. That simply is not so. My amendment enables, but does not require, the FSA to say that conformity with a panel ruling is conformity with the code. It enables the FSA to withdraw that ruling if it so permits. Therefore, in terms of accountability, a clear link is created between the panel and the law. With regard to accountability, the noble Lord, Lord Grabiner, surely will recollect that it is a condition of Stock Exchange listing that public companies comply with panel rulings. That is a very effective form of enforcement and accountability.
I was interested to hear that the European Convention on Human Rights was relied upon. That hare has come to the fore more prominently as the Government have realised that they do not have many other steeds entered in this race. In a cricketing analogy—the noble Lord, Lord Newby, used one—it is a longstop. Of course, we who love cricket know that the worst fielder is always put at longstop. If those fears were ever to be made good, the FSA could withdraw the authority. However, attempting to terrorise this House with the convention may not impress.
In the time that I knew the panel—and the panel has been a party to the convention during its entire existence—there was never a suggestion that its procedures, of which I briefly reminded your Lordships, were unfair.
I conclude by reference to one or two arguments put forward by the noble Lord, Lord Newby. Of course, I do not understand the political processes to which my

1389
noble friend Lord Kingsland referred. However, with the greatest respect to the noble Lord, perhaps I may say that the merits of those arguments were absolutely barren. He said that the government amendment recognises the position of the panel. It does not. It recognises the position of the code, but not that of the panel, as the noble Lord, Lord Newby, would have had it when we last discussed the Bill, as the authority which determines compliance. The noble Lord said that the government amendment contemplates that the panel will normally give the first ruling. Where, I ask? The Bill is absolutely silent on that point.
I could go on. I speak to the noble Lord in the hope that he and his colleagues, whom I very much respect, on reflection will decide that the principle that they supported last time round is right. I certainly appeal to your Lordships to respect, if not my view, the view of the noble and learned Lord, Lord Donaldson, the views of the City and of the financial press, and to speak for UK business. In the light of the encouragement that I have received, I should like to test the opinion of the House.
4.4 p.m.
On Question, Whether the said amendment (No. 180B), as an amendment to Commons Amendment No. 180A, shall be agreed to?
Their Lordships divided: Contents, 183; Not-Contents, 188.

Division No. 1

CONTENTS

Aberdare, L.

Carnegy of Lour, B.

Ackner, L.

Carr of Hadley, L.

Alexander of Weedon, L.

Carrington, L.

Allenby of Megiddo, V.

Cavendish of Furness, L.

Ampthill, L.

Chadlington, L.

Anelay of St.Johns, B.

Clark of Kempston, L.

Astor, V.

Cockfield, L.

Astor of Hever, L.

Coe, L.

Attlee, E.

Colwyn, L.

Bagri, L.

Cope of Berkeley, L.

Barber, L.

Courtown, E.

Bell, L.

Cowdrey of Tonbridge, L.

Bellwin, L.

Cox, B.

Belstead, L.

Craigavon, V.

Blackwell, L.

Cranborne, V.

Blaker. L.

Crathorne, L.

Blatch, B.

Crickhowell, L.

Blyth of Rowington, L.

Croham, L.

Boardman, L.

Cuckney, L.

Bowness, L.

Dacre of Glanton, L.

Brabazon of Tara, L.

Darcy de Knayth, B.

Bridgeman, V.

Dean of Harptree, L.

Brigstocke, B.

Deedes, L.

Brittan of Spennithorne, L.

Dixon-Smith, L.

Brougham and Vaux, L.

Donaldson of Lymington, L

Burnham, L. [Teller]

Dundee, E.

Buscombe, B.

Eden of Winton, L.

Butterworth, L.

Elles, B.

Buxton of Alsa, L.

Elliott of Morpeth, L.

Byford, B.

Elton, L.

Caithness, E.

Erroll, E.

Campbell of Croy, L.

Feldman, L.

Carlisle of Bucklow, L.

Flather, B.

Carnarvon, E.

Fookes, B.

1390

Forsyth of Drumlean, L.

Northbrook, L.

Gardner of Parkes, B.

Northesk, E.

Gilmour of Craigmillar, L.

Norton of Louth, L.

Glenarthur, L.

O'Cathain, B.

Glentoran, L.

Onslow of Woking, L.

Goschen, V.

Oppenheim-Barnes, B.

Gray of Contin, L.

Oxfuird, V.

Griffiths, L.

Palmer, L.

Griffiths of Fforestfach, L.

Palumbo, L.

Hanham, B

Park of Monmouth, B.

Hanson, L.

Pearson of Rannoch, L.

Harris of High Cross, L.

Peyton of Yeovil, L.

Harris of Peckham, L.

Pike, B.

Haslam, L.

Pilkington of Oxenford, L.

Hayhoe, L.

Powell of Bayswater, L.

Henley, L.[Teller]

Prior, L.

Higgins, L.

Pym, L.

Home, E.

Quinton, L.

Hooper, B.

Rawlings, B.

Howe, E.

Reay, L.

Howell of Guildford, L.

Rees-Mogg, L.

Hunt of Wirral, L.

Renfrew of Kaimsthorn, L.

Hurd of Westwell, L.

Renton, L.

Hylton-Foster, B.

Roberts of Conwy, L.

Inglewood, L.

Ryder of Wensum, L.

Jenkin of Roding, L.

Saatchi, L.

Jopling, L.

Sainsbury of Preston Candover L.

Kelvedon, L.

Kimball, L.

St. John of Fawsley, L.

Kingsland, L.

Sanderson of Bowden, L.

Kirkham, L.

Seccombe, B.

Lamont of Lerwick, L.

Selborne, E.

Lang of Monkton, L.

Sharples, B.

Lindsay, E.

Shaw of Northstead, L.

Liverpool, E.

Shrewsbury, E.

Lucas, L.

Simon of Glaisdale, L.

Luke, L.

Skelmersdale, L.

Lyell, L.

Skidelsky, L.

McColl of Dulwich, L.

Soulsby of Swaffham Prior, L.

McConnell, L.

Stevens of Ludgate, L.

Mackay of Ardbrecknish, L.

Stewartby, L.

Marlesford, L.

Strathdyde, L.

Marsh, L.

Swinfen, L.

Marshall of Knightsbridge, L.

Taylor of Warwick, L.

Masham of Ilton, B.

Tebbit, L.

Mayhew of Twysden, L.

Thatcher, B.

Miller of Hendon, B.

Trefgarne, L.

Molyneaux of Killead, L.

Trumpington, B.

Monro of Langholm, L.

Vivian, L.

Monson, L.

Waddington, L.

Montagu of Beaulieu, L.

Wade of Chorlton, L.

Montrose, D.

Walker of Worcester, L.

Mowbray and Stourton, L.

Weatherill, L.

Moynihan, L.

Wilberforce, L.

Murton of Lindisfarne, L.

Wilcox, B.

Naseby, L.

Willoughby de Broke, L.

Newton of Braintree, L.

Young, B.

Norfolk, D.

Young of Graffham, L.

NOT-CONTENTS

Acton, L.

Bernstein of Craigwell, L.

Addington, L.

Blackstone, B.

Ahmed, L.

Blease, L.

Alli, L.

Bradshaw, L.

Amos, B.

Brennan, L.

Andrews, B.

Brookman, L.

Archer of Sandwell, L.

Brooks of Tremorfa, L.

Ashton of Upholland, B.

Bruce of Donington, L.

Avebury, L.

Burlison, L.

Bach, L. [Teller]

Burns, L.

Barker, B.

Carter, L.[Teller]

Barnett, L.

Castle of Blackburn, B.

Bassam of Brighton, L.

Chandos,V.

Beaumont of Whitley, L.

Christopher, L.

Berkeley, L.

Clarke of Hampstead, L.

1391

Cledwyn of Penrhos, L.

Lovell-Davis, L.

Clement-Jones, L.

Macdonald of Tradeston, L.

Clinton-Davis, L.

McIntosh of Haringey, L.

Cocks of Hartcliffe, L.

McIntosh of Hudnall, B.

Cohen of Pimlico, B.

MacKenzie of Culkein, L.

Craig of Radley, L.

Mackenzie of Framwellgate, L.

Crawley, B.

McNally, L.

Dahrendorf, L.

Mallalieu, B.

David, B.

Mar and Kellie, E.

Davies of Coity, L.

Mason of Barnsley, L.

Davies of Oldham, L.

Massey of Darwen, B.

Dean of Thornton-le-Fylde, B.

Merlyn-Rees, L.

Desai, L.

Miller of Chilthorne Domer, B.

Diamond, L.

Milner of Leeds, L.

Donoughue, L.

Mitchell, L.

Dormand of Easington, L.

Molloy, L.

Dubs, L.

Morris of Castle Morris, L.

Elder, L.

Morris of Manchester, L.

Evans of Parkside, L.

Murray of Epping Forest, L.

Evans of Temple Guiting, L.

Newby, L.

Evans of Watford, L.

Oakeshott of Seagrove Bay, L.

Ezra, L.

Parry, L.

Falconer of Thoroton, L.

Patel of Blackburn, L.

Falkland, V.

Paul, L.

Farrington of Ribbleton, B.

Peston, L.

Faulkner of Worcester, L.

Phillips of Sudbury, L.

Filkin, L.

Pitkeathley, B

Fyfe of Fairfield, L.

Plant of Highfield, L.

Gale, B.

Ponsonby of Shulbrede, L.

Gavron, L.

Prys-Davies, L

Gibson of Market Rasen, B.

Puttnam, L.

Gilbert, L.

Ramsay of Cartvale, B.

Goldsmith, L.

Randall of St. Budeaux, L.

Goodhart, L.

Razzall, L.

Gordon of Strathblane, L.

Redesdale, L.

Goudie, B.

Rendell of Babergh, B.

Gould of Potternewton, B.

Rennard, L

Grabiner, L.

Rodgers of Quarry Bank, L.

Graham of Edmonton, L.

Rogers of Riverside, L.

Greaves, L.

Roll of Ipsden, L.

Greengross, B.

Roper, L.

Grenfell, L.

Russell, E.

Gregson, L.

Sainsbury of Turville, L.

Hamwee, B.

Sawyer, L.

Hardy of Wath, L.

Scotland of Asthal, B.

Harris of Greenwich, L.

Scott of Needham Market, B.

Harris of Haringey, L.

Serota, B.

Harrison, L.

Sharman, L.

Haskel, L.

Sharp of Guildford, B.

Hayman, B.

Shepherd, L.

Hilton of Eggardon, B.

Sheppard of Liverpool, L.

Hogg of Cumbernauld, L.

Shore of Stepney, L.

Hollis of Heigham, B.

Shutt of Greetland, L

Hooson, L.

Simon, V.

Howells of St Davids, B.

Smith of Clifton, L.

Howie of Troon, L.

Smith of Gilmorehill, B.

Hoyle, L.

Stern, B.

Hughes of Woodside, L.

Stoddart of Swindon, L

Hunt of Kings Heath, L.

Stone of Blackheath, L.

Irvine of Lairg, L. (Lord Chancellor)

Strabolgi, L.

Strange, B.

Islwyn, L.

Symons of Vernham Dean, B.

Janner of Braunstone, L.

Taylor of Blackburn, L.

Jay of Paddington, B. (Lord Privy Seal)

Thomas of Walliswood, B.

Thomson of Monifieth, L.

Jeger, B.

Thornton, B.

Jenkins of Putney, L.

Tomlinson, L.

Joffe, L.

Tope, L.

King of West Bromwich, L.

Tordoff, L.

Kirkhill, L.

Turner of Camden, B.

Layard, L.

Varley, L.

Lea of Crondall, L.

Walmsley, B.

Lipsey, L

Warner, L.

Lockwood, B.

Warwick of Undercliffe, B.

Lofthouse of Pontefract, L.

Watson of Richmond, L.

Longford, E.

Wedderburn of Charlton, L.

1392

Whaddon, L.

Wilkins, B.

Whitaker, B.

Williams of Elvel, L.

Whitty, L.

Williams of Mostyn, L

Wigoder, L.

Winston, L.

Resolved in the negative, and amendment disagreed to accordingly.
4.16 p.m.
On Question, Motion agreed to.
LORDS AMENDMENT
589 Page 219, line 8, leave out sub-paragraph (4) and insert—
("(4) In a case where the investigator—

(a) has reported that a complaint is well-founded, or

(b) has criticised the Authority in his report,

the investigator may include in his report a recommendai ion to the Authority that it takes steps to remedy the matter complained of including, if appropriate, by making an ex-gratin payment.").
The Commons agreed to this amendment with the following amendment—
589A Line 2, leave out from ("(4)") to end of line 7 and insert
("If the investigator considers that a complaint of which he has been notified under sub-paragraph (3) ought to be investigated, he may proceed as if the complaint had been referred to him under the complaints scheme.
(4A) The complaints scheme must confer on the investigator the power to recommend, if he thinks it appropriate, that the Authority—

(a) makes a compensatory payment to the complainant,

(b) remedies the matter complained of,

or takes both of those steps.").
Lord McIntosh of Haringey: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 589A to Lords Amendment No.589.
I hope that noble Lords on all sides will welcome the consensus that we have been able to reach on the final amendment to this Bill. The Government will agree to Amendment No. 589A, which was moved from the Opposition Front Bench in another place and which amends Amendment No. 589. Amendment No. 589A restores the power of the investigator to investigate in accordance with the complaints scheme any complaint of which he has been notified by the authority but which the authority has decided not to investigate. This is an amendment to a Lords amendment carried on a Division despite my assurances that we supported the principle that the investigator should have power to make ex-gratia payments. The amendment removes an anomaly which we believe was not intended.
Moved, That this House do agree with the Commons in their Amendment No. 589A to Lords Amendment No. 589.—(Lord McIntosh of Haringey.)
Lord Kingsland: My Lords, I should like to thank the noble Lord for the Commons amendment which slightly redrafts the one which was before your Lordships' House. It meets all our criteria perfectly.
On Question, Motion agreed to.
Lord McIntosh of Haringey: My Lords, I beg to move that the House do now adjourn during pleasure for five minutes.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended front 4.18 to 4.23 p.m.]

Hunting with Dogs
Lord Bassam of Brighton: My Lords, with the leave of the House, I should like to repeat a Statement which is being made in another place by my right honourable friend the Home Secretary. The Statement is as follows:
"With permission I would like to make a statement on the report of the Committee of Inquiry into Hunting with Dogs in England and Wales, which I am publishing today. Copies are available in the Vote Office.
"The House will recall that last November, I announced that there would be an inquiry into hunting and that the noble Lord, Lord Burns, had accepted my invitation to be chairman. The other members of the inquiry were appointed for their expertise in agricultural and rural economics, and in veterinary science. I am most grateful to the noble Lord, Lord Burns, and to the members of his committee, for their hard work and for the fact that the report has come in on time.
"The question of whether hunting is right or wrong is a matter for Parliament to decide. The committee was not therefore asked to recommend whether hunting should be banned nor was it asked to consider moral or ethical issues.
"The Burns report instead covers four key areas in relation to the activity of hunting. First, it considers the contribution hunting makes to employment and the rural economy as well as to social and cultural aspects of life in rural areas. Secondly, it deals with the animal-related aspects of hunting—that is, principally animal welfare and their population management. Thirdly, it considers whether drag hunting is a viable alternative to hunting. The final area covered by the report is an assessment of the consequences of any ban on hunting, and how a ban might be implemented. It also assesses how some people's concerns in regard to particular aspects of hunting might be addressed should hunting not be banned.
"The committee visited different parts of England and Wales to witness at first hand a number of hunting activities. Academics were commissioned to undertake research into various matters related to hunting activity. The inquiry attended seminars, organised by all sides of the debate. It also held a number of public meetings and ensured that working papers were placed on its website.
"This inquiry into hunting was the first official one since the Scott-Henderson inquiry reported to this House in June 1951. I have had the opportunity to read the report over the weekend. I thoroughly
1394
commend it to all Members of the House. I hope that when honourable and right honourable Members have had the same chance as have I to study the report they will share my view that it is a profoundly impressive study—cogent, and well argued, dispassionate and careful in its conclusions.
"The report needs to be read and considered as a whole, and it is hard to do justice to its views in a few paragraphs. None-the-less the House would, I think, wish me to summarise some of its key observations. They include the following.
"On employment, the report says that,
'between 6,000 and 8,000 full-time equivalent jobs depend on hunting'.
It says that most of the employment effects of a ban could be offset in the long term, say seven to 10 years. But in the short and medium term the individual and local effects might be more serious, as they would for a small number of local communities.
"The report contains details of research commissioned in four rural communities where hunting is actively pursued and says that this suggests higher levels of support for hunting than previous surveys have indicated.
"In chapter 6 the committee considers animal welfare aspects of hunting and the relative effects on the welfare of foxes and other species of different methods currently used to kill them.
"A ban on hunting with dogs would not have any significant impact on the population of foxes in lowland areas, but could lead to an increase in numbers in upland areas.
"A number of recommendations are made about regulation and licensing if a ban is not imposed, and the committee also concludes that generally any ban should apply nationwide, without different legislative provisions in different regions of the country.
"The purpose of the inquiry was to get to the facts and so better to inform the debate. I am sure that when right honourable and honourable Members have read the report they will see that it has achieved this objective.
"Let me now turn to the arrangements I propose to the House for it to consider the report and reach conclusions on it. Right honourable and honourable Members will want the chance first to study the report. Then, subject to the agreement of business managers, I would like the House to have the opportunity, if at all possible before the Recess, of a debate on the report itself on a Motion for the adjournment.
"I should like to say what I propose should follow that debate. In our manifesto we said that there would be a free vote on hunting with hounds. The Government are, and remain, neutral on the merits of whether hunting with hounds should be banned, but we do have an obligation to ensure that the decisions of this House can have effect.

1395
"Last November, when I announced the establishment of the Burns inquiry, I therefore said that the Government would provide government time and assistance to allow this House to come to a proper legislative conclusion on a free vote on the matter. Our original plans were to take this forward with a Private Member's Bill in government time. I now however believe that it would be for the convenience of the House if there was a government Bill in government time which contained a series of legislative options on the merits on which there would be free votes. Such a Bill could, I believe, provide for a more structured debate and will better allow for consideration of a wider range of alternatives in the light of the report. The House will recall that this arrangement worked satisfactorily for the Sunday Trading Bill in 1994.
"Arrangements will meanwhile be made for the main interest groups to be consulted so that the options are set down as accurately as possible in the Bill to reflect the alternative legal regimes which could be put into force. The consultation will take place as soon as possible, and while the House will be aware it is not just a matter for me I anticipate a Bill will be introduced early in the next Session.
"I well recognise the strength of feeling on this matter. It is only right that all sides of the debate should be given the opportunity to have their point of view considered fairly and that Parliament should have the chance to come to a proper conclusion. I hope the House will agree that procedure of the kind I have described provides that opportunity. Meanwhile, I repeat my thanks to the noble Lord, Lord Burns, and his committee, and commend his report to the House".
My Lords, that concludes the Statement.
4.28 p.m.
Lord Cope of Berkeley: My Lords, I am grateful, as I am sure is the whole House, to the Minister for repeating almost exactly the Statement which the right honourable gentleman the Home Secretary made in another place.
First, I want to make it clear that this matter will continue to be a free vote for our supporters in this House, as in another place. But I remain a consistent supporter of hunting and have supported it since long before I was a Member of another place and during the whole of the time that I was such a Member. Is the Minister aware that there is strong support for the freedom to hunt among many who have never hunted at all, and from many uncommitted people, such as those who belong to the Women's Institute?
I am sure that we are all grateful to the noble Lord, Lord Burns, my noble friend Lord Soulsby of Swaffham Prior and their colleagues on the committee who have produced this report. But is the Minister not ashamed of the discourtesy—I put it no stronger—to the noble Lord, Lord Burns, and his colleagues, wherein Ministers leaked their decision to promote a government Bill before even reading the report that they themselves commissioned? This was, I think, disgracefully premature.
1396
The Home Secretary said that Parliament should have the opportunity to come to a proper conclusion. He also said that in another place there would be a debate on the report, preferably before the Recess. Does this also apply to your Lordships' House?
When the Government put the proposed Bill before your Lordship's House, will the same options be available to this House as are available to the other House of Parliament, and, if so, how? Will the three options be fully costed as to the expense of enforcement, which is not covered as far as I can see in the few minutes I have had to look at the Burns report, particularly in terms of the heavily stretched police and the time that it will cost them? What is the position on compensation, which again the Burns committee was not asked to look into?
Will Members of another place who represent Scottish constituencies be able to vote on this matter, given that the Scottish Parliament is deciding the issue for Scotland, as is its right under the legislation that was passed, whereas the proposed Bill will apply only to England and Wales?
Lastly, will the Minster guarantee that this is not stage one, with stages two and three to cover fishing and shooting?
4.31 p.m.
Baroness Miller of Chilthorne Domer: My Lords, from these Benches we too thank the Minister for repeating the Statement made in the other place. The Government commissioned the Burns inquiry, which we warmly welcomed, but it is regrettable that they made a decision to bring forward a Bill before we have had an opportunity to debate the report of the inquiry. We do not feel that that knee-jerk reaction will forward the debate in any constructive way. We shall have this debate, and indeed debates on the Countryside and Rights of Way Bill, before the rural White Paper. That is entirely the wrong way round. We should have had the medium and long-term strategy for our rural areas clearly laid out well before the Government began to impose changes that are bound to have a social and economic impact, whether or not we approve of those measures.
Initial feedback from the Burns inquiry suggests that some areas—albeit a few—will, indeed, be deeply affected. They are likely to be those areas already affected by the crisis in agriculture and by the strong pound affecting tourism. As it stands, people living in rural areas feel that they are the butt of other people's moral judgments. They have seen no plan for their futures and have had no opportunity to comment on them.
From this Front Bench I shall pass no personal opinion on hunting with hounds because we, too, will have a completely free vote on the issue. However, there are many of us who believe that this is another fundamentally authoritarian step from a Home Office that is intent on forming judgments on society without adequate consultation and debate.
I must ask the Minister to confirm that this House will be presented with a Bill for debate containing all the options, and not with a Bill as passed in the other

1397
place and on which we shall be able to debate all the options, bar one. Uncomfortable though it may be for the Government, this House must have the same opportunity to debate the Bill as the other place.
4.34 p.m.
Lord Bassam of Brighton: My Lords, I am grateful to the noble Lord, Lord Cope, and the noble Baroness, Lady Miller, for their observations. I am not sure that my thanks will extend further than that, but observations they were and I shall try to respond to them as best I can. I have noted that the noble Lord, Lord Cope, said that on his side the matter will be subject to a free vote. I congratulate the noble Lord on making that statement. I extend similar congratulations to the noble Baroness. The Government have made it plain from the beginning that we shall have a free vote on this matter. We made that matter clear at the outset when we discussed our manifesto. In fact, it was a manifesto commitment.
The noble Lord raised the question of leaks. There has been no leak, so far as I can determine, from the Home Office. There has been press speculation, but that of course is another matter. The noble Lord asked when there might be a debate. I should hope that there would be a debate before the Recess, but of course I cannot determine that. That is a matter to be agreed through the usual and proper channels and no doubt that will be properly processed, and the matter will be sorted out in the usual and efficient manner.
The noble Lord also asked whether the options would be fully considered in your Lordships' House. That is an interesting question. I think that probably we shall have to look at how this worked when there were options on Sunday trading. Probably Members of your Lordships' House will have a better memory of that than I. My understanding is that all the options on Sunday trading—there were very many in the end—were fully debated by your Lordships' House and were considered in the legislation. I think that that template, that model, is one which will work well in this situation.
The noble Lord made an interesting point about the position of Scottish MPs who are Members of the UK Parliament. No doubt they will express their views as Members of that Parliament. Of course, this is a matter which is devolved to the Scottish Parliament. The noble Lord also made the speculative point as to whether this was stage one of a process covering other matters relating to fishing, hunting and so on. This is an issue which stands on its own. It should be considered on its own. No doubt Members of your Lordships' House will have varying and different opinions on that issue, but that is how we see the matter.
The noble Baroness, Lady Miller, I think perhaps somewhat unkindly, accused the Government of being authoritarian on the issue. I find it hard to believe that we are being authoritarian when we have provided an opportunity for a full debate on many of the background issues that lie behind the understandable
1398
controversy over this issue. To call us authoritarian suggests in some way that we are skewing the debate when we are providing the opportunity for debate and then proper consideration of a Bill with options. That is very strange indeed. I think that is a very strange judgment for the noble Baroness to have formed. I understand her concerns, coming from the political background that she does, and representing an interest with large rural areas and constituencies, and they are not to be dismissed lightly. I reject the suggestion that we have been authoritarian. As I said in the Statement, we intend to provide for full consultation. We intend to provide as many opportunities as can be reasonably managed within the proper processes of your Lordships' House for reasoned debate on this issue. That will make a very important contribution indeed.
Those were the points raised at the outset. I look forward to other comments and observations by Members of your Lordships' House in the next few minutes.
4.39 p.m.
Viscount Cranborne: My Lords, perhaps the noble Lord could first, particularly arising out of the last part of his answer, tell the House how it will be possible to provide the amount of time that this House could reasonably request, both to debate the report and indeed to consider properly a Bill, given the enormous backlog of legislation we already have. Therefore, could the noble Lord undertake to ensure that this House is not blamed if there are delays in the consideration of this Bill when we are already overcrowded with business?
Secondly, could the noble Lord cast his mind back to the great Countryside Alliance march a couple of years ago which ended in Hyde Park and the remarkable fact that the guardians of Hyde Park did not have occasion to pick up one single bit of litter, that the law was obeyed throughout and that the guidance of the police was not only sought but followed? Would he therefore care to contrast the behaviour of those demonstrators with that of the rather more recent demonstrators round the Cenotaph and Parliament Square? Also, could he and other Members of the Government consider how sensible it is for them at this time of their remarkable popularity to alienate a section of the population which, perhaps more than any other, instinctively wants to obey the law?
Lord Bassam of Brighton: My Lords, I am grateful to the noble Viscount for his question. I understand his point about the legislative backlog but of course we are not planning to legislate in this current Session but in the next Session, providing that we can fit in all the pieces of legislation that we want to have. I make the point that I made at the outset: agreement about debate is best decided upon and worked through the usual channels. That is the most sensible way to proceed: it usually works extremely well. Members of your Lordships' House have debated many issues with opportunities being given through the usual channels.

1399
The noble Viscount makes comparisons between the members of the Countryside Alliance and those demonstrators who defaced the Cenotaph and insulted the intelligence of all of us by their poor and ill-judged behaviour, their violence and their general unpleasantness. The point is simply this: with all these things, however strongly held our views may be and however passionate our feelings on issues of the day, it is for all of us to make sure that we have a reasoned, fair-minded and open-minded debate. That is an encouragement I would offer, particularly on a subject like this which, I think we must all acknowledge, stirs up very strong feelings all round on all its different aspects. These debates are best conducted in a fair and open-minded way.
Lord Palmer: My Lords, may I ask the noble Lord the Minister whether he happened to see his honourable friend, Kate Hoey, yesterday on television, when she said that surely there are more important things facing this Government than a Bill to ban hunting with dogs?
Lord Bassam of Brighton: My Lords, I did not actually catch that particular interview, but I understand the sentiments. This is an issue which has been around for a very long time and it is not unreasonable for us to try, as a Parliament, to resolve it one way or the other. I do not pretend that it is a straightforward issue: I do not think that anybody would say that. It is a complex matter and I believe that the report will help us to get to the heart of some of the issues involved and deal with the complexities.
Lord Hoyle: My Lords, perhaps I may say to my noble friend that I agree with him that there will be many views expressed in this House. I hope that reasoned views will be expressed but may I say, as someone who has always lived in the countryside and who lives in the uplands, that, if we had to rely on fox hunting to control foxes in our area we would have been overrun long ago? May I ask him whether he has seen reports that certain hunts are breeding foxes, which seems to me to be a contradiction if they are supposed to be exercising pest control? May I ask him, if a Bill comes forward containing the various options, would it also apply to stag hunting and hare coursing? Finally, is my noble friend, like me, expressing some surprise that the party opposite now, in relation to Scottish Members, appear to be against the Union?
4.45 p.m.
Lord Bassam of Brighton: My Lords, the noble Lord speaks with a longer parliamentary experience than I do on these matters, and he also speaks with great wisdom. I am somewhat surprised by some of the observations made by Members of the party opposite. As I said earlier, this issue is one which needs to be carefully thought through and resolved. The report provides us with that opportunity and I think that we
1400
should try to concentrate our minds on that issue. As to whether foxes, deer, mink and hares will be covered, I think the answer is yes.
Lord Elton: My Lords, some of us are becoming increasingly puzzled by the mechanics of this. The noble Lord said a moment ago that we would have the Bill if it could be fitted in among all the other pieces of legislation that the Government wanted to bring in. Can he tell us whether there is actually a firm commitment by the Government to bring Bill in? Also, can he answer more precisely the question that has been asked from both Front Benches as to what sort of Bill it will be? Is it going to be a "No. 2" Bill, in which we see exactly the choices to be faced by the other place and make our decision on those, or are we merely to pick up whatever the other place have decided we should have, after having made their own amendments to whatever sort of Bill it is?
It is difficult to believe that a government who were actually ready to announce the introduction of a Bill before the report on which we thought the Bill would be based have not thought through the mechanics of how it would be handled in Parliament. I presume that the noble Lord has the answer to hand.
Lord Bassam of Brighton: My Lords, I thought I had made it reasonably clear. One can never be absolutely precise about how many Bills there will be in any parliamentary Session this far in advance: it would be unwise. A Bill with options will come to this House— that is to say, with the options preferred by the other place. That procedure worked for the Sunday Trading Bill, as I recall—I think my recollection is right— but that does not mean that this House will not have the quite proper opportunity to look at, debate and discuss all those options.
To make it crystal clear once again, we will provide in another place—and it is my hope and expectation that we shall have that opportunity here as well—the opportunity for a full debate on this report. We did not say at the outset that this report would somehow be the legislation. We said that the report would be there to provide the background and the framework for a debate about key issues which have been raised. This would lead to a better informed debate. I think that is a very sensible way forward, and we will make sure that arrangements are made for this House to look at all the options which have been considered by the other place.
The Earl of Longford: My Lords, would the Minister inform us whether there is any possible objection to drag hunting? My father was a master of foxhounds and I was brought up to believe that was a noble sport. That still leaves a human point of view. Later, the cruelty to the fox has rather overwhelmed me so that I do not favour fox hunting but I do favour drag hunting. Is there any possible objection to drag hunting? Everything is fine about hunting except that it is cruel to the fox.
Lord Bassam of Brighton: My Lords, I think it is worth putting on the record that this is an issue which

1401
was considered very carefully by the noble Lord, Lord Burns, and his committee. The report looks at drag hunting and I would simply commend the report to the noble Earl so that he can read it carefully. It goes at length into that subject. Of course, drag hunting is a popular pastime and sport and it is one of the things the report encourages us to look at more closely. It is obviously something which many people enjoy.
Lord Waddington: My Lords, do not the Government understand that there are many on this side of the House who have never hunted but who nevertheless believe that to criminalise hunting would be a gross interference with individual freedom? Have not the Government themselves said on many occasions that a tolerant society is one that respects the strongly held views of minorities, particularly minorities who are not inflicting their views on other people but who merely want to be left alone to pursue an occupation which has been part of country life for generations? Will the noble Lord please recognise that there are many like me who have actually joined their local hunt to demonstrate how much they resent the idea that a majority in another place should inflict their views on people who want to continue to follow a perfectly proper recreation?
Lord Bassam of Brighton: My Lords, I respect and understand the noble Lord's view. The Government have no great desire to criminalise people who seek pleasure—
Noble Lords: Oh!
Lord Bassam of Brighton: My Lords, if I may conclude my point, we have no great desire to criminalise people. I understand entirely the strength of feeling held by Opposition Members. It is best to look dispassionately at the issue. The purpose of the report was to have more informed debate, which is an entirely sensible way to proceed.
As I said at the outset, the Government are neutral and it is a matter for Parliament to decide on a free vote. That is an entirely sensible and logical way through a complex issue on which there are many strongly held views.
Several noble Lords rose—
Noble Lords: Mallalieu.
The Attorney-General (Lord Williams of Mostyn): My Lords, I sense that your Lordships wish to hear from my noble friend Lady Mallalieu.
Baroness Mallalieu: My Lords, I speak with a keen interest on this matter because, if one of the Bill's proposed options were adopted, myself, my husband, children and neighbours, together with many of my best friends, would be imprisoned if they continued to behave as they do now—which we believe to be perfectly lawful.
1402
I ask my noble friend the Minister to convey to the Home Secretary the gratitude of many people for the establishment of the inquiry, which for the first time gave many the opportunity to have their say to someone they felt was listening. I pass on the thanks of all those on both sides of the argument to the noble Lord, Lord Burns, and his team. Nobody could have spent more time, taken more trouble or shown more patience in seeing for themselves and listening.
This issue has become incredibly divisive. It is not simply a matter of town against country, as it is sometimes billed. It is a case of people against people—sometimes in the same village or family. I suspect that the Government were elected by such a large majority in 1997 because people wanted to see a nation working together. It would be hard to find something more likely to destroy that feeling than a Bill of this type.
I hope that this matter will not drag on and on. If we spend the next Session on the Bill, the result is inconclusive and people stick to entrenched positions, the battle will be carried on after the next general election—possibly for some years beyond that.
I wonder why we were not allowed to see the report a little earlier today, so that we could have some idea of its content before the Statement. The report is incredibly detailed and complex and it is likely to take up a great deal of legislative time. I hope that within it are the seeds of solutions that all reasonable people on both sides of the debate can grasp and accept. If so, perhaps we can prevent a recurrence of today's sad spectacle of people having to come from all over England to appeal to Members of both Houses to defend their rights.
Lord Bassam of Brighton: My Lords, I commend my noble friend's general approach. She is absolutely right to say that we need sensible, rational and dispassionate debate. She is right also to congratulate the noble Lord, Lord Burns, on his careful, detailed and thoughtful report. She is correct in saying that the Government seek to heal divisions. That is why we were elected. There is no getting away from the fact that this is a vexed issue. The report tries to provide useful background, to enable us to find a sensible way through. The concept of options and debate carefully constructed around them will allow us to do that. I am grateful to my noble friend for her kind comments and I will be more than happy to convey her gratitude to my right honourable Friend the Home Secretary.
The Earl of Onslow: My Lords, the Minister says that the Government are neutral but the Prime Minister said on television that he wanted to abolish fox hunting. Is the Prime Minister neutral towards his own Government? He said also that he does not have any disagreement with shooting or fishing, so he accepts that it is quite satisfactory and morally correct

1403
to kill for fun. What is the difference between the morality of shooting a pheasant and the morality of chasing a fox?
Lord Bassam of Brighton: My Lords, perhaps the noble Earl is better at morals and the killing of animals than I am.
Earl of Onslow: My Lords, I want an answer.
Lord Bassam of Brighton: My Lords, the noble Earl is entitled to ask his question but he is in some danger of trivialising the report.
Noble Lords: Oh!
Lord Bassam of Brighton: Your Lordships are entitled to disagree but that is my view. The noble Earl asked about the Government's position. I made it plain earlier that we are neutral. The noble Earl asked also about the Prime Minister's view. My right honourable friend is a Member of Parliament and clearly expressed his view. We are all entitled to express our view. The noble Earl is entitled to express his view. The noble Lord, Lord Cope, expressed his view cogently at the outset. No doubt he will continue to do so.
Lord Gilbert: My Lords, could not the arguments of the noble Lord, Lord Waddington, equally be applied to the maintenance of cock fighting or bear baiting? It is perfectly obvious that I am not a countryman but am I correct in thinking that most countrymen regard foxes as vermin? Does my noble friend know of any other vermin that is deliberately kept alive?
Lord Brighton of Bassam: My Lords, I may have been brought up in the countryside but do not claim to be a countryman. As to foxes being vermin, we seek to control them in different ways. Fox hunting is undertaken by some for pleasure and by some for fun. I draw no conclusion although it is not something that I particularly see as fun. The report clearly and fairly states that banning fox hunting would not make much difference to the size of the fox population. We would undoubtedly apply instead means that are commonly in use.
Lord Renton: My Lords, is the Minister aware that foxes are the most destructive vermin in this country? They are very damaging to poultry, game and other wildlife. Hunting is the most certain and least cruel way of keeping the number of foxes down. The alternative of shooting often results in the fox getting gangrene. Poisoning and trapping are in any event illegal. Will the Government bear those points in mind before doing anything to stop fox hunting?
Lord Bassam of Brighton: My Lords, we have heard those views expressed before and will no doubt hear them again in the wide-ranging debate on the Bill. Some people see foxes as vermin and undoubtedly that is the case. The Burns report is helpful in some of its
1404
observations on that matter. The noble Lord asks the Government to consider his points. I have made it plain that this matter is for Parliament. All parties have openly and honestly said—and have repeated this afternoon—that the matter is one on which Parliament should decide, not Government, and that there should be a series of free votes on the options. That remains the case. From the tone of debate in your Lordships' House this afternoon, it seems that people are pleased that there will be free votes on all the options.
Several noble Lords rose—
Lord Kimball: My Lords—
Lord Bach: My Lords, I am sorry that the noble Lord, Lord Kimball—whom I greatly respect—has not had the opportunity to contribute but we have had our 20 minutes of Back-Bench Questions. The rules of the House dictate that we should move on.

Regulation of Investigatory Powers Bill
5 p.m.
Lord Bach: My Lords, on behalf of my noble friend, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Lord Bach.)
Lord Cope of Berkeley: My Lords, I apologise for interrupting the proceedings at this point, but I believe that I can address the House on an important matter before we move into the detail of the Committee stage. I should like to ask the Minister whether the Government have taken account of the strongly developing opinion against this Bill. When we debated the Second Reading a few weeks ago, it was generally true to say that the Bill was of serious concern only to the e-community, broadly speaking. However, opposition has grown much wider since that time, which means that the Bill has achieved the rare, if not unique, distinction of having The Times, the Financial Times and the Guardian all call for the Bill to be withdrawn and reconsidered.
A similar rare combination of allies against the Bill has developed among business and financial organisations. Today, the British Chamber of Commerce has published a detailed report by an impressive panel, edited by two gentlemen from the London School of Economics and one from University College London—neither institution is normally known as a force of conservatism—which concludes, among other things, that the costs to service providers of compliance would be £650 million over five years, and continuing thereafter. It has also concluded that the effects on the economy would be well over £35 billion over five years in the transfer of business to overseas jurisdictions. These are very serious figures.

1405
The report also says that the Bill as it stands is entirely inadequate as a mechanism to achieve efficient and reasonable interception and surveillance and that its effect is likely to be loss of confidence in e-commerce, unacceptable costs to businesses and to the UK economy, confusion and uncertainty at numerous levels of business activity and an onerous imposition on the rights of individuals. In those circumstances, can the Minister say whether the Government are treating these growing and much wider criticisms very seriously?
Lord Bassam of Brighton: My Lords, I am grateful to the noble Lord, Lord Cope, for intervening in this way. I should like to thank him for giving me notice of his intention to do so. Like the noble Lord, I have read the press coverage. We have received many representations. We wish to be as helpful as we can. However, the public debate has revealed some very serious misunderstandings about the Bill. We must, first, try to correct those misunderstandings because some of them are ill judged, while others are misconceived. They are also beginning to skew somewhat the debate.
We are more than happy at all times to consider serious and properly argued amendments. Perhaps it is worth pointing out to your Lordships this afternoon that we are very much in listening mode on this Bill. However, we shall not be deflected from our course; nor shall we withdraw the Bill, as suggested in some of the wilder public comments. None of our industry contacts asks us to withdraw the Bill. They ask for it to be amended in many and various respects. We shall see what we can do in that regard.
As regards some of the misunderstandings in the media, it may be useful if I quote from a letter that my right honourable friend Jack Straw, the Home Secretary, has written in response to The Times editorial today, in which he runs through some of the myths:
"The first myth is that the Bill requires all Internet service providers in the UK to install black boxes with a link to the Security Service to monitor traffic. This is completely untrue. The Bill introduces comprehensive statutory controls for the first time governing access to data, such as billing records. Access must be properly authorised for specified purposes only. This is subject to independent oversight … The second myth is that the Bill criminalises the innocent user of technology. Again, this is wholly wrong. It targets the serious criminal. There is a sanction for not complying with a decryption notice. But the burden is on the prosecution to prove beyond reasonable doubt that a person has, or has had, possession of a decryption key. Forgetting passwords or keys is a reasonable thing to do, so the Bill includes statutory defences for such cases".
The Home Secretary then goes on to look at a third myth; namely, that companies will be required to surrender private keys to their entire network and will be prevented from divulging this. He says:
"But we have made it clear that, where legitimate businesses are concerned, we fully expect that disclosing material in an intelligible form rather than a key will normally be sufficient. The Bill reflects this. It contains restrictions on when keys may be required and when the 'tipping off' provision may come into play".
1406
We do not want to see the burgeoning e-commerce market overrun with high-tech criminals against whom law enforcement finds itself powerless; neither does industry with which we have actively engaged in consultation. So we need to update our laws. But we also need to ensure that we protect citizens' legitimate rights and that we do not overburden business. It is all about balance. I believe that the Bill strikes the right one.
As I said at the outset, I am grateful to the noble Lord, Lord Cope. We are very much in a listening mode. We want to hear what Members of your Lordships' House have to say on the very important matters contained in the Bill. We continue to listen to points that are reasonably put to us from all sections of industry. The noble Lord made particular reference to the report of the British Chamber of Commerce, which we received today. A representative from the BCC recently visited our officials. We are more than happy to meet the authors of that report, and of other reports, in order to go through some of the serious issues raised. We are seeking to find solutions to the problems.
Much of the Bill is uncontroversial and much of it is already on the statute book in another form. However, we seek to update, modernise and make more effective those parts of the legislation that require such amendment, as well as dealing with the difficult issues surrounding encryption. That is the primary purpose of this piece of legislation.
Lord McNally: My Lords, I apologise for entering the Chamber a little late for what was obviously a well prepared response to the opening remarks of the noble Lord, Lord Cope. This Bill seemed to start off as something of a "sleeper" in terms of public concern in that it went through the Commons stages without a great deal of public debate, although it was thoroughly dealt with in Committee in the other place. However, judging by my postbag and—dare I say it?—my e-mails, as well as comments in the editorial columns of the newspapers, there has been a growing concern since our Second Reading debate not just from civil rights lobbies, but increasingly from industry that this Bill is not good enough.
The Minister said that the Bill was "uncontroversial". That is a very generous comment for a Bill about which there is growing doubt as to whether it covers the relevant areas of technology. As I said, there is also increasing concern on the part of both industry and civil rights lobbies. The noble Lord, Lord Cope, was courteous enough to tell me what he planned to do; indeed, judging by the thoroughness of the Minister's reply, I think that the noble Lord may even have given him a nod and a wink in that respect.
Rather than go through the toil and the turmoil of a Committee stage which, if the Government's complacency remains, I fear will result in some defeats for them, would it not be better to take away the Bill and perhaps hold some public hearings and obtain some more expert advice on it? I believe that the Government are heading for the rocks if they do not realise that the warnings that have been given from

1407
some responsible quarters are valid. These are warnings from people who want pornographers, drug smugglers and others to be apprehended but who do not believe that some of the provisions in the Bill address those problems and, where they do, that they give the authorities far too many powers. There are real problems with the Bill. The Government should listen carefully to the wise advice of the noble Lord, Lord Cope, before we become embroiled in a Committee stage where I do not believe that we shall make much progress.
Lord Bassam of Brighton: My Lords, as ever, I am grateful to the noble Lord, Lord McNally, for his careful reflections. He always speaks with great common sense. However, I thought I had made it plain in my response to the noble Lord, Lord Cope, that we are aware of the growing volume of concern. Two editorials on this matter appear today in the Guardian and The Times. I have read those and I understand the arguments that are put forward. As I said earlier, I am more than happy to listen to concerns. As always, I have invited noble Lords to discuss points of the Bill that trouble them. It is an important piece of legislation. We are certainly not complacent about it, far from it, but it is a necessary piece of legislation. It makes plain—I think perhaps for the first time—that we need to have a proper regulatory framework for the interception of communications. It tries to address—I believe that it succeeds in this—the serious issue of the way in which technology is changing and evolving. That is no easy exercise. I can well understand that people may be concerned, as the noble Lord suggests.
Committee stage gives noble Lords a full opportunity to discuss the detail of legislation with a view to improving it. I recognise the strength of opinion on certain issues. We shall try to be as helpful as we possibly can as we proceed through the Committee stage. However, as I say, this is essential and important legislation. Our security services, our police service and many of the agencies covered by the Bill would be seriously concerned if we were to be deflected from our intended course of action. We should try to concentrate on resolving the serious issues of concern as best we can in Committee to improve the Bill. As I say, we are ready to listen to all views on these matters.
On Question, Motion agreed to.
House in Committee accordingly.
[The DEPUTY CHAIRMAN OF COMMITTEES (Baroness Gardner of Parkes) in the Chair.]
Clause 1 [Unlawful interception]:
5.15 p.m.
Lord Lucasmoved Amendment No. 1:
Page 2, leave out lines 38 to 40.
The noble Lord said: I have tabled a large number of amendments to the Bill. I shall try to deal with them as expeditiously as possible. In this case I think that it would be best to start with a short exposition from the
1408
Minister as to what lines 38 to 40 of page 2 are intended to achieve and a couple of practical examples of how they will be used in practice. I beg to move.
Lord Bassam of Brighton: I certainly congratulate the noble Lord on his—
Viscount Colville of Culross: Order! The amendment should be put.
The Deputy Chairman of Committees: Amendment proposed:
"Page 2, leave out lines 38 to 40".
Lord Bassam of Brighton: Before I was quite rightly interrupted I endeavoured to congratulate die noble Lord on his desire to be expeditious. However, that is in the noble Lord's nature.
This, and subsequent debates today, will, quite properly, seek to scrutinise—as I suggested earlier—the provisions of the Bill, which is a complex piece of legislation. The Bill has already been improved by scrutiny in another place. I repeat that it is for this Chamber to seek further to improve it.
During our debate on each of the amendments it is worth reminding ourselves what the Bill is all about, and why it is crucial that we legislate on these matters. As we are debating Part I today I hope that no one will mind me trying to put the Bill into perspective. This legislation is all about countering the threats which are posed to our society by criminals and terrorists. I believe that that is commonly agreed. The threats exist now and, in our view, the current legislation is either out of date or the law enforcement, security and intelligence agencies have been working on a non-statutory basis which we must rectify before the Human Rights Act comes into force in October. We should bear that date strongly in mind this afternoon.
This is an important Bill. Rather than backing up that claim with generalities or poorly researched figures, I shall give the Committee some facts regarding the effectiveness of interception. Successive governments have shied away from giving too much detail about its effectiveness—for reasons which we shall debate later—but these figures give an indication of just how successful interception is.
During 1996 and 1997 lawful interception of communications played a part—often the crucial part—in operations by police and HM Customs which led to 1,200 arrests; the seizure of drugs with a street value of some £600 million; and the seizure of some 450 firearms. During a 12-month period during 1998–1999 Customs seized 1.25 tonnes of Class A drugs, and made 93 arrests in connection with those drugs, through interception. In fact, in 1998, 52 per cent of the total amount of heroin seized by Customs was a direct result of interception. The total value of drugs seized in 1998 as a result of interception was in excess of £185 million. This comes to over 10 per cent of the total sum spent on drugs per annum in the United Kingdom, an amount which could cost the country up to £500 million each year.

1409
Meanwhile, in work against alcohol and tobacco smuggling, recent Customs interception operations have been so successful that the number of staff working on interception against these targets has doubled. Just this morning I saw some updated figures on the results that interception continues to achieve. By their very nature, it is not possible to share these figures publicly and I shall not do so. However, I reassure the Committee that the results I have just mentioned continue to be highly relevant. These are important powers for law enforcement. We, the public and businesses alike, cannot afford to do without them.
The Committee will note that I have not given any figure or quantification of the success of interception against terrorism. However, I assure the Committee that it is an equally potent weapon and has contributed significantly to the prevention of terrorist atrocities, including some which would undoubtedly have caused loss of life and extensive damage to property. I have today seen the latest monthly results accruing from interception. They remain impressive and I have no doubt of the benefit which serious criminals and terrorists would derive if we were not to bring our interception legislation up to date. Therefore, while I do not wish to labour the point, we need to consider what the Bill is designed to achieve and work towards that.
As I said earlier, I have seen comment in the press today. There are some serious misconceptions around. We have tried, and will continue to try, to get our message across. But this debate must be rational and based on the facts. When all sides have considered all the facts, we can focus on specific suggestions for improvement of the Bill. I am happy to do that but before accepting any changes, I shall want those who propose them to have a full understanding of their impact.
I refer to specific points on the amendment. With regard to Amendment No. 1, Clause 1(1) of the Bill creates the offence of unlawful interception, and then goes on to provide defences to that offence in subsection (5). But through the act of interception, the interceptor may commit other offences or torts, in particular under the Human Rights Act. The final part of subsection (5) ensures that there is a defence to those liabilities.
I trust that the noble Lord understands where we are coming from in terms of this particular clause and that those few comments will assist him in considering whether he wishes to withdraw his amendment.
The Earl of Erroll: Presumably these three lines protect the prosecutor from the kind of case that happened recently, where judges decided that there had been an abuse of process and people who were probably criminals were released. Judges punishing
1410
the police—and, effectively, the public—by releasing people who are probably criminals because there has been a technical abuse of process, is not the way to deal with the problem. In general, we should punish the authorities for an abuse of process quite separately. That should not invalidate evidence which may well convict a clearly guilty criminal—and therefore protect the public—even if that evidence has not been garnered correctly. It should carry over from this Bill into other areas to ensure that cases cannot be thrown out on various technicalities. I know that it sounds complicated.
Viscount Astor: It may be helpful to the Minister if I intervene before he replies to the noble Earl. I apologise that I was not here at the Second Reading debate; unfortunately I was abroad. I declare an interest, which I hope will suffice for the remaining stages of the Bill. I am a non-executive chairman of a company called Streetnames Plc, listed on AIM, which is an address-related Internet domain names company. It will offer e-mail addresses to businesses and private users and, by subscription, access to an Internet-based e-mail service for sending and receiving messages and attachments, and will include automatic e-mail forwarding. Therefore it might be affected by parts of the Bill—although the Bill is so complicated that I have not yet worked out which parts. No doubt I shall find out as we go through it.
Having said that, perhaps I may make a general point. I do not think that anyone on this side of the Committee doubts that interception is successful and important to the Customs and to the police. I do not think that any noble Lords want to take away those interception powers. We are concerned with the additional powers proposed in the Bill, and it would be helpful if the Minister could focus on that element.
As to my noble friend's amendment, subsection (5) concerns conduct. The final part of that subsection, which my noble friend wishes to delete, states:
"shall also be taken to be lawful for all other purposes".
The words "other purposes" raise a question in my mind. To what "other purposes" does that refer?
Lord Lucas: Perhaps I may raise a point that the Minister does not seem to have covered which concerns the words,
"(whether or not prohibited by this section)".
Since these three lines refer only to conduct specifically authorised under paragraphs (a) or (b), what is that phrase in brackets doing there? Does it not have the effect of making any conduct authorised for other purposes, even if it is not authorised for the purposes of the Bill? It seems a very odd phrase. I do not understand what it means and I should like some examples.
Lord McNally: The noble Lord and the noble Viscount have put their fingers on issues which will come up time and again. It may be useful for the Minister to deal with them. There is no doubt that where phrases such as,
"(whether or not prohibited by this section)"; "lawful for all other purposes";
and, as I mentioned on Second Reading, lots of "anys", get into the clauses, it causes concern—and the kind of blanket permissiveness which runs through this Bill is causing concern.
Going back to the initial intervention of the noble Lord, Lord Cope, it would have been far better all round if we could have seen the code of conduct under which some of these powers will be used by the authorities. We should then have been able to make a judgment on whether or not it is wise. But at the moment we are being asked to take the code of practice on trust. I am not sure that we have had any assurance from Ministers that we will see it in this House during any stage of the Bill. It would be a step forward to at least get a timetable of when we will see the code of practice and some appreciation by Ministers that,
"lawful for all other purposes"; "(whether or not prohibited by this section)";
and all the "anys" that run through the Bill, is certainly not the kind of legislation that should be tolerated when Parliament is passing extensive powers to the executive and to the security and other services. Parliament has to be very careful.
It would probably save time as we go through the Bill if we acknowledge that we know—as the Minister emphasised—there are a lot of bad guys out there and that the authorities need powers to get after them. We want them to get after the drug smugglers and the paedophiles as much as anyone in any Whitehall department wants them to do so. But Ministers must not use the scale of the problem as a way of scaring and bouncing this House into passing slipshod or over-powerful legislation.
Viscount Goschen: I associate myself with the concerns and points raised by my noble friends Lord Lucas and Lord Astor. Almost for the first time I associate myself with concerns raised by the noble Lord, Lord McNally, from the Liberal Democrat Benches.
The issues that my noble friend Lord Lucas has highlighted within the subsection are a motif that runs throughout the Bill. Either this subsection gives very wide powers or it is badly drafted and a number of us have misunderstood it. Either way, we need a clear explanation from the Minister as to how exactly these powers are restricted when the subsection states,
"(whether or not prohibited by this section)".
I should also declare an interest at this stage—albeit a tangential one—in that I work for a financial institution that from time to time advises companies with e-commerce interests.
Lord Bassam of Brighton: Perhaps I may first respond to some of the comments made by the noble
1412
Lord, Lord McNally. He offered me good advice in his observations. It is not the Government's intention to try, as he put it, to bounce the Committee into accepting poorly drafted legislation because of security needs or the needs of the various law enforcement agencies. That is not our intention. Like the noble Lord, I, too, have trouble in reading and getting my mind fully round some of the legalese language in which much of our legislation is drafted. It is not an easy task. I share his frustration and the frustration of other noble Lords in doing so.
As to the noble Lord's point about the code of practice, that will be based on the existing public code which has been used and issued by ACPO. We intend to publish a draft and to provide a full opportunity for public consultation; I cannot be precise as to when. The noble Lord makes a useful point. Perhaps it is something that should be published during the course of our discussion and debates. If that is possible, we shall seek to do that. That seems to me to be reasoned and sensible.
But, to give the noble Lord a flavour, the code shall be based around the current one, which is very useful. As I said in my opening remarks, much of the legislation is not controversial in the sense that it has been incorporated into our statutory framework, but is littered across it in small pieces. What we are trying to do here is to bring all that legislation together in a coherent fashion, modernise it, update it and make it more intelligible. I apologise if it appears that we have not succeeded in achieving that, but of course that is what we are aiming to do here.
I shall turn to the comments made by other noble Lords. I am grateful to all those who have declared their particular interest as regards this issue. I believe that we all have a certain interest here. The intervention from the noble Earl, Lord Erroll, was well intentioned but perhaps wrong. There is a prohibition on the use of intercept material. Given that, the point that he made probably does not arise. It is worth reminding ourselves that the ECHR demands that any interference with the human rights set out in Article 8 is carried out,
"in accordance with the law".
It would not be enough to say merely that an interception warrant gives a defence to a narrow criminal offence. That is why we have set out the circumstances under which interception would be permissible. If those tests are met, the interception will generally be lawful.
I am not sure that I shall be able to provide a specific example of how that will work for the noble Lord, Lord Lucas. However, I shall give further thought to the point he made. A description of how something will work in practice is always helpful.
This kind of provision may become more common as human rights legislation begins to kick in substantially. It is no longer right to believe that an action is lawful unless it is prohibited. That is an important point to make clear. If something interferes with fundamental rights, it is generally unlawful unless it is positively allowed. I believe that we shall all come

1413
to understand the process better once the human rights legislation begins to have an impact on the way in which we legislate.
The amendment moved by the noble Lord would make the demands of the law unreasonable. The danger of the amendment is that it could make law enforcement staff engaged in carrying out interception liable under other legislation, even if they were operating under a properly authorised warrant. There lies the danger of this amendment and, in essence, that explains why we must object to it. I therefore suggest to the noble Lord that it might be better if the amendment was withdrawn.
5.30 p.m.
Viscount Astor: Before my noble friend decides what he wants to do with his amendment, perhaps I may say that we are grateful to the Minister for his remarks about the code of conduct, in particular when he said that a draft may be made available to noble Lords at the earliest opportunity. It would be of enormous benefit if that is the case. Indeed, I hope that it can be made available before we consider the Bill on Report. That will be advantageous to all noble Lords and, indeed, no less so to the Government, because we shall then be able to proceed through the Report stage with a much clearer understanding of the effects of the Bill.
Lord Bassam of Brighton: I hope that I can be even more helpful to the noble Viscount. I understand that we shall be able to publish a draft form of the code by the end of the month. When considering the timetable for this legislation, it is likely that the House will have an opportunity to look at the draft code before the beginning of the Report stage. Furthermore, public consultation is to follow.
Viscount Astor: I am even more grateful to the noble Lord. As I said, this will be to the advantage of the Government because it will mean that we shall be able to conduct a far speedier Report stage.
Lord Lucas: I am grateful to the Minister for answering at least one-half of my question. I am beginning to understand in general terms why we need these three lines. However, it seems an odd concept to include in legislation and I hope that the Minister will be able to write to me giving further information on why, having said that an action is lawful, we need to say that it is specifically lawful for all purposes and how we expect to see this put forward in further legislation, if only from the point of view of better understanding the Human Rights Act.
However, I do not believe that the noble Lord has addressed my question as regards the words,
"whether or not prohibited by this section".
I am still unclear as to their meaning or why it is necessary to include them here. Without those words, the clause would read:
"and conduct … which has lawful authority for the purposes of this section by virtue of paragraph (a) or (b) shall also be taken to be lawful for all other purposes".
1414
That now seems to me to be reasonably straightforward. However, any conduct "prohibited" by this section is still to be,
"lawful for all other purposes".
That implies that conduct prohibited by Clause 5 is lawful for all other purposes. In any event, I cannot see the point of the wording here. If it has a point, it seems to me that it could be extremely dangerous. I sure that there is an innocent explanation, but given that I gave the Minister's officials several days' notice of what I meant when I tabled the amendment, I had hoped to receive a clear answer today.
Lord Bassam of Brighton: I am always willing to try again. Clause 1(5) allows only conduct authorised by Clauses 3 or 4 or by an interception warrant. That conduct can be only interception, but it may be interception that is not prohibited, for example, the interception of a private postal system. I think that I understand that. If, on reflection, the noble Lord finds that he, too, understands it, I shall be delighted. However, if on reading Hansard he is still not certain, perhaps we shall need to address the finer detail of his point in correspondence or return to it at a later stage.
The wording may be a little opaque, but I think that it is in fact more transparent than perhaps we believe it to be. Perhaps we are being a little too suspicious of it.
Lord Lucas: I shall not detain the Committee for any longer than is necessary. I shall be grateful if the noble Lord could write to tell me what would happen if the words set out in brackets were deleted from this paragraph in the Bill. What harm would accrue to the Bill? I shall then be able to consider sensibly what provision to put down when we return to the Bill on Report. In the mean time, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord McNallymoved Amendment No. 2:
Page 2, line 48, at end insert—
("and the interception is in accordance with provisions of regulations made under section 4(2) with the object of ensuring that the senders and recipients of such communications are made aware of the purposes for which, and the circumstances in which, those communications may be intercepted").
The noble Lord said: With this amendment we move to one of the first areas in which concerns have been expressed about the treatment of individual rights in the Bill. We are trying to establish what might be described as the legitimate expectations of privacy for employees when they operate a private system. There is a danger that overly inquisitive employers could bug their own staff; indeed, in the past we have seen examples of that kind of behaviour, using older technologies. We need also to consider the circumstances of whistle-blowers and how they need to be protected.
The amendment seeks to ensure that the arrangements for the interception of communications in the course of transmission by means of a private telecommunications system are compliant with Article 8 of the European Convention on Human Rights.

1415
Again, I suspect that the compatibility with the human rights convention of some of the powers conferred by this Bill will be a recurring theme throughout our deliberations in Committee.
The European Court of Human Rights has decided that the definition of "private life" can extend to business activities and to the office. A case that comes to mind is that of Deputy Chief Constable Halford, who was bugged by her own police force. The European Convention on Human Rights requires that any interference with rights set out in Article 8 must be prescribed by law. In its current form, Clause 1(6) provides too wide an exemption when it refers to,
"The circumstances under which a person makes an interception … by means of a private telecommunications system".
However, if it were subject to the arrangements we propose under Clause 4(2), this difficulty would be removed.
This is a probing amendment to see whether Ministers have considered such an approach. However, I think that it covers a far more fundamental issue as we begin to embrace quite breathtakingly new technologies. I freely admit that the Minister and I are soul brothers in this area—when the parliamentary draftsmen meet the Internet geeks, simple souls like us need to look for protection. Nevertheless, this issue deserves clarification and I look forward to the Minister's reply. I beg to move.
Viscount Astor: If I happen to telephone the Minister in his office, he is in effect "bugged" in a rather old-fashioned way. The private secretary will listen to the telephone call on the extension to make sure that after the call I am unable immediately to telephone the press and say that the Minister agreed to something to which he did not agree. That practice exists for the Minister's protection.
More sophisticated techniques are used in modern offices. In my place of work—the "day job—the telephones are regularly taped on all the trading floors or in any part where business is done. That is a protection not only for clients, but for those who work in the building, so that what they say is not used by anyone else. Indeed, the e-mail system in my office—if it works properly, which it does not very often, because we keep being attacked by outside things—has a capacity for copies to be retained for certain purposes. It is perfectly reasonable for that to happen in a commercial environment.
But the noble Lord, Lord McNally, refers to a form of protection for the individual. The very least that the individual must know is that the interception is taking place. The second point relates to the uses to which the e-mail copies or taped conversations can be put by an employer or anyone else. It is a theme to which we shall return throughout the passage of the Bill. We do not need not to be frightened by the concept; however, we do need to pay careful attention to the safeguards that
1416
should be in place for the protection not only of employees but also of employers. This is an important issue. I shall be interested to hear the Minister's reply.
Lord Bassam of Brighton: This short exchange has been quite useful. It has set out the parameters of the debate and some of the awkwardnesses in terms of legislation with which we are attempting to deal.
The effect of the amendment would be to replace the civil liability for a person making an interception on a network that he has a right to control or use with a criminal offence unless that person had carried out the interception in accordance with regulations made under Clause 4(2). I believe that my interpretation of the amendment is correct. The noble Lord attempts to ensure that every person who may be monitored is made aware of the purposes and the circumstances in which that might happen.
The Government are as keen as anyone present to ensure that the privacy of the individual is protected—hence Clause 1(3), which enables a civil action to be brought against anyone who intercepts a communication on a private network. One of the key drivers for this legislation is that such interception should be in accordance with the law. It must be within the legal framework and for a lawful purpose—hence also the lawful business practice regulations, which will govern the actions of businesses in this context and of any public authorities which monitor calls to the switchboard or the communications of the staff. These will contain the stipulation that businesses have reasonable grounds to believe that all parties to any communication are aware that monitoring may take place.
However, applying these regulations to the general public at large is an entirely different matter. The amendment would place a legal obligation, for instance, on all parents to inform every person who called them on the telephone. The same would apply to the circumstances described by the noble Viscount, Lord Astor, where ministerial conversations are monitored. In such circumstances the child, the Minister's private secretary, or any individual present might conceivably pick up a second handset and listen in. We do not believe that the amendment is either reasonable or realistic. Such communications are already protected by the civil action provision in Clause 1(3). I trust that with that assurance the noble Lord will feel able to withdraw his amendment.
5.45 p.m.
Lord McNally: I shall readily withdraw the amendment. However, perhaps I may point out to the Minister's advisers as much as to the Minister himself that I hope that the response every time we put forward an amendment will not be one of reductio ad absurdum. We are not worried about 10 year-olds listening to their parents' conversations—although I am desperately trying to stop mine doing just that! We are moving into the use of awesome new technology. The amendment attempts to express concerns about the rights of the employee in the working environment

1417
The Minister referred to the civil redress that is contained in the Bill. I shall ponder on his reply. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 1 agreed to.
Clause 2 [Meaning and location of "interception" etc.]:
Lord Lucasmoved Amendment No. 3:
Page 3, line 17, leave out ("postal").
The noble Lord said: I am interested in the word "postal" which appears twice in the Bill, where my amendments seek to delete it. The reference is to "postal items". So far as I can see, the term is not defined in the Bill; nor does it appear in the Postal Services Bill—the closest that that Bill comes is in its use of the term "postal packets".
The general sense of the interception capability ought to be that the authorities, when suitably authorised, can look at any item in the course of transmission if that item contains a communication. My amendments would make sure that anything is considered "post"—it could be a piece of heavy plant, but if there is a communication with it, the provision in the clause would apply. If the restriction is to something "postal", I should like to know what the word means in this context and why there is no common definition with the Postal Services Bill. I beg to move.
Lord Cope of Berkeley: I, too, am interested in the definition, which does not seem satisfactory. What it really says is that a "postal service" means any service that consists in the collection and so on of postal items. So it does not define anything at all. It is fairly obvious that the service has to do with collection and I am not sure that the definition is necessary. I accept that lawyers may think it wise to include a definition, even if the Bill does not define "postal", which is the nub of the matter.
The matter becomes difficult in relation to considerations arising out of the speech of the noble and learned Lord, Lord Brightman, at Second Reading. The noble and learned Lord complained about the definitions in Clauses 2 and 72. The Minister was kind enough to send me a copy of a letter that he wrote to the noble and learned Lord. It is undated, but is recent—I saw it this morning, therefore it may have arrived after I left at the end of last week.
In the letter, the Minister explains that,
"Part I of the Bill introduces some difficult and complex concepts relating to interception and telecommunications".
and says that,
"These are fundamental to the subject matter of Chapter I of Part I".
The Minister goes on to say that that is why it has been thought right to put them at the start.
1418
Whatever it is, this definition is not a difficult and complex concept relating to interception. It is a much simpler definition than that. I should have thought that it could well have been left in Clause 72, where there is already a reference to it in any case.
Lord Bassam of Brighton: "Postal service" and "postal item" are found in two different parts of the clause. I am sure that noble Lords will have read them. On reading "postal service" I thought that it was pretty clear what it meant. For the purposes of the record, I point out that the clause says, in subsection (1),
"'postal service' means any service which—
(a) consists in the following…the collection, sorting, conveyance, distribution and delivery (whether in the United Kingdom or elsewhere) of postal items".
Subsection (10) says:
"'postal item' means any letter, postcard or other such thing in writing as may be used by the sender for imparting information to the recipient, or any packet or parcel".
If noble Lords can find more than that defining "postal item" or "postal service", I should be most grateful if they would tell me.
As I understand their effect, Amendments Nos. 3 and 4 would dramatically extend the offence of unlawful interception by applying it to any goods at all, rather than communications, as intended by the Bill. As I have said on a number of occasions, the Bill is designed to update legislation, primarily the Interception of Communications Act, in the light of new technology and legal and market developments, not to extend the powers, which would I think be harmful to the Bill. That would be the effect of the amendments.
I think that the phrases "postal item" and "postal service" cover everything that we would wish to catch within the legislation, without extending the criminal offence unnecessarily. If the noble Lord has some examples of things he thinks we have missed, I should be most grateful for further elucidation of his point, but perhaps in view of what I have said he will feel able to withdraw the amendment.
Lord Lucas: I had missed the fact that "postal item", rather than being in the alphabetical list in subsection (1), is stuck away in subsection (10). For the purposes of this Bill we have a different definition from that current in another Bill going through the House—the Postal Services Bill. I should be grateful if the noble Lord the Minister would consider whether those two definitions might not with advantage be brought into coincidence.
Lord Bassam of Brighton: I am grateful to the noble Lord for reminding me of that important point. I shall of course look at the two definitions and see whether they in any sense contradict each other in terms of effectiveness of the law. I am certain that they will not, but we shall make a further check on that.
Lord Lucas: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 4 not moved.]
Lord Phillips of SudburyMoved Amendment No. 5:
Page 3, leave out lines 23 to 33 and insert—
(""private telecommunication system" means any such parts of a telecommunication system which do not comprise a public telecommunication system;").
The noble Lord said: In moving the amendment, I should like to speak also to Amendments Nos. 9 and 11, which are grouped with it. The noble Earl, Lord Northesk, will speak to Amendment No. 14, which is in the same group.
I must declare an interest, to this extent: I might reasonably claim to be a highly experienced lawyer, but I am a remarkably inexperienced computer buff. Maybe that is an advantage, in that the world at large will have to grapple with this extraordinary legislation. While we all criticise it, and try to be constructive in our criticisms, I acknowledge as a lawyer that drafting this measure must have been one of the most complex and difficult jobs that the parliamentary draftsman has had to confront in many a long day.
The amendments to which I am speaking are both purposive and probing. After listening to me the Minister may say that they could be better dealt with in some other way, but the point revolves around the difference between Chapter I and Chapter II of Part I. The Committee will recognise that I am here referring to the fact that access to information under Chapter I can be gained only with a warrant and that access to communications data under Chapter II can be gained without warrant, on a self-authenticating authorisation procedure that obviously gives far less protection to the citizen.
The reason we propose these three amendments to the definition clause is that if the definitions are right a great deal of the nuts and bolts of the Bill that follow will be correct, although what the noble Lord, Lord Lucas, said reminded me of the point made on Second Reading about the unhappy fact that the definitions are spread around the Bill. Nevertheless, if we get the definitions right, the Bill is more likely to be right. If the definitions are inappropriate, everything else will collapse, particularly in a Bill of this nature, which is so complex and interlaced.
The points that we seek to rectify by the three amendments concern requests for information, or for what are sometimes called datagrams, which, as the Bill is drawn, will fall within Chapter II as being communications data and not within Chapter I, which covers the content. On the face of it a request for information using the huge search engines that are now a feature of this world would seem to concern what are classically communications data, rather than significant content. However, I am advised, and can readily understand, that in investigating all the requests for information from various web servers over a period of time, using one of the now commonplace analytical programmes that can draw salient points, salient trends and so on, out of a mass of detail, one has an extraordinary tool for obtaining a profile of those in respect of whom the searches are
1420
made that will build up to a highly sensitive intrusion into their lives. It will get at their life's concerns, contacts, political views, plans—all by building up patterns that emerge from analysing a thousand separate datagrams.
It should be made absolutely clear—and we believe that it is not—that that sort of inquiry, that sort of access, must be possible only by warrant, and not under Chapter II. I am told that the rate at which the technology is developing makes this point, which may seem arcane to some, one of immense importance, since most telephonic conversations will be carried by these means, by so-called datagrams, in the near future. We believe that changing the definitions in this clause, as would be done by Amendments Nos. 5, 9 and 11, would achieve our purpose.
Finally, we seek to establish that the end points of a transmission are not part of the telecommunication system—that is, that no interception warrant may require any interference with the origin or destination. I beg to move.
6 p.m.
The Deputy Chairman of Committees (Lord Brougham and Vaux): I have to advise the Committee that if Amendment No. 5 is agreed to, I cannot call Amendments Nos. 6 to 8 inclusive.
The Earl of Northesk: Amendment No. 14 is in this grouping. For the convenience of the Committee, and at the invitation of the noble Lord, Lord Phillips of Sudbury, I shall speak to it now.
I hope that the Minister will find it music to his ears if I tell him that it is very much a probing amendment. I am only too well aware that the phrase "general reception" in Clause 2(3) is intended to be very much wider than my substitute formulation of "reception by the general public". Nor, per se, do I quarrel with that. It merely strikes me that the phrase is woolly. It lacks clarity.
I am aware that the phrase has been used previously in drafting, I believe in recent legislation related to broadcasting. But its context in this Bill seems somewhat different. It is conceivable that messages transmitted to pagers within a closed network—let us say that of a political party—could be interpreted as falling within the terms of,
"any communication broadcast for general reception".
In the case of a properly registered and legitimately constituted political party it is difficult to imagine an occasion when interception of such communications could readily be justified, even on the grounds specified in Clause 21(2). That is all good and well.
Equally, it is possible to envisage instances—in particular in the context of organised crime—where such closed networks could be the preferred mode of communication even though they could be interpreted to fall within the ambit of "general reception". Either way it is important that the Government's intended parameters of the phrase should be more clear-cut.

1421
While I do not believe that the Bill would be improved by a copious list of the communications and broadcasts that the Government have in mind, none the less I should be grateful if the Minister can put some flesh on what are, as they stand, very bare bones.
Lord Bassam of Brighton: I am grateful to both noble Lords who have spoken and for the probing nature of the amendments.
Amendment No. 5 would include within the definition of a "private telecommunication system" all self-standing private systems in the United Kingdom, and all telecommunications systems abroad, whether public or private. I think that that is the correct understanding. The scope of the prohibition on interception would be widened to include all such systems. Amendments Nos. 6, 7 and 8 have this effect only for self-standing private systems. Under the Interception of Communications Act 1985, only the interception of communications in the course of their transmission by means of a public system is unlawful. The Bill extends this to make unlawful also interception on a private system attached to a public system: for example, an office or hotel network, or the telephones in a domestic household. This extension implements the requirements of Article 5 of the European Telecommunications Data Protection Directive. That is how we see it working. That is where it comes from. That is its root.
Our understanding is that Amendments Nos. 9 and 11 would change the definition of telecommunication system to exclude the origin and destination. The noble Lord made that clear in his explanation. But a primary purpose of this part of the Bill is to ensure that wherever along the path of a communication it is intercepted, the required level of authority, handling, safeguards and oversight remain the same. It would make no sense for interception of a telephone wire in the street to require a Secretary of State warrant, yet no warrant to be required if the interception was to occur at the telephone handset. Indeed, this was the deficiency identified by the European Court in the case of Halford v. UK which this Bill seeks to remedy. An important step is being taken with this legislation.
Amendment No. 14 seeks to clarify the meaning of the phrase "for general reception". Clause 2(3) is designed to ensure that listening to a publicly available communication—for example, a radio or television programme—is not treated as interception for the purposes of this Bill. It uses a phrase which is used and well understood in other legislation. The noble Lord acknowledged that point. For example, the Broadcasting Act 1996 uses it in its definition of a "digital programme service". In Section 1(4) it states that this means,
"a service consisting in the provision by any person of television programmes (together with any ancillary services, as defined by section 24(2)) with a view to their being broadcast in digital form for general reception".
In Section 1(7), we are told that "for general reception" means for general reception in, or in any area in, the United Kingdom. I hope that the noble
1422
Lord will be reassured that the phrase here has the same meaning. I trust that with those reassurances, the noble Lord will feel able to withdraw the amendment.
Lord Cope of Berkeley: On Amendment No. 14, police and ambulance broadcasts were, and sometimes still are, able to be picked up on short-wave radio. People sometimes listened to them out of interest and sometimes because they were criminals wishing to ensure that the police were not headed in their direction. It became a relatively common practice. I am not sure whether that counts as "general reception". It is no fault of the person that he or she receives the broadcast. But is it an offence not to retune immediately one's radio should one come across such a broadcast? I am not sure whether that would be a new offence. It would be of interest to know the position.
Lord Lucas: From the Minister's remarks and the definition he cited from the Broadcasting Act 1996, my noble friend Lord Northesk has hit the nail on the head. "General reception" means anything that is intended to be received generally. In the case of television, that includes signals intended to be used only by people who have paid the fee to unscramble them, or the pay-per-view fee. "General reception" clearly includes signals broadcast generally which are intended to be used only by those who have paid the fee or fulfilled specific requirements.
Under the Bill, even if I were to intercept and make use of a signal for Sky Sports 1, I would not be committing an offence under this Bill. However, if that technology is to be legitimate under this provision—under the definition given by the Minister it is—then, as my noble friend Lord Northesk said, interception of a signal to a pager or to a mobile phone, both of which are broadcast for general reception but are intended to be decrypted by an individual or group of individuals, falls within the definition and falls outside the prohibitions in the Bill. Therefore tapping mobile phones and pagers is not covered. It is an area that the Minister should consider. His own definition compounds the difficulties that my noble friend Lord Northesk outlined.
The Earl of Northesk: Perhaps the Minister will undertake to give the matter firm consideration. We seem to have unearthed a problem that we have not encountered previously.
Lord Bassam of Brighton: I think that we have. We can debate this issue further under Clauses 20 to 24.
Perhaps I may clarify the point on pagers. It is clear that to intercept pagers would need a warrant. The noble Lord seemed to think that one would not be needed; we take the view that it would.
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. Noble Lords will need to understand that precise point.

1423
The noble Earl, Lord Northesk, makes a useful contribution. We can have further debate on the issue on Clauses 20 to 24. On reflection, perhaps he will be satisfied with the definition as we have sought to explain it.
Viscount Astor: Perhaps I can ask the Minister a question relating to his reference to "general reception" and the fact that pagers are not included in this. Where does that leave subscription broadcasting, and indeed encrypted broadcasting? Where does that fit into the definition?
Lord Bassam of Brighton: I am grateful to the noble Viscount for his intervention. I shall need to take further advice on that point. I am sure that the noble Viscount will appreciate that it is rather more complex than is perhaps usual.
Lord Lucas: In case the noble Lord wishes to wind up, this is very much getting at the same point, a point which we should not leave alone now until we get a firm commitment from the Minister to deal with it very seriously. The size of a private group does not have any bearing on its status under this Bill. If I send out a signal which is receivable by two or 200 pagers, that is not something which is relevant under this Bill. If I send out a television signal which is intended only for the 200,000 people who have paid but is actually receivable by everybody, the definition that the noble Lord has just quoted refers to "general reception". Therefore, it is for general reception whether the group happens to be 200,000-strong or 200-strong. In other words, pagers—and I suspect mobile phones, even though they comprise only a singular group, which is none the less mathematically a group, as any mathematician will doubtless acknowledge—are by this clause as currently drafted (using definitions in other Bills, because there is no definition in this Bill) excluded from the effects of this Bill. The noble Lord has demonstrated that with his own words. None of us wishes that to be the case, but we must take this absolutely seriously.
Lord Bassam of Brighton: I agree that we need to take it seriously. However, the noble Lord is perhaps taking the reductio ad absurdum argument to its nth degree here. "Broadcast for general reception" has a fairly obvious meaning. It could not possibly refer to pager messages to a closed group. A pager network is a full part of a telecommunications network and, as I have made plain, pagers are clearly caught by Clause 2(2)(c). I therefore do not quite understand that particular difficulty about the definition. I believe that we are in the right territory here in terms of how this should work. I simply invite the noble Lord to reflect on some of the observations that I have made. If there are further questions or points to be raised in relation to this matter, we can, of course, deal with them at a later stage.
Lord Lucas: I should prefer it if the noble Lord did the reflecting. General reception is exactly what pagers are about. The pager system has no knowledge whatsoever of where an individual pager is. It sends out a signal over the whole of the United Kingdom and it is just picked up by my pager. Mobile phones know, within a cell, where somebody is within a few hundred yards or a few miles, but within that area of the country the signal is again sent out for general reception. "Reception" merely means that I am all owed to receive it, that I do receive it. My pager is at this moment receiving every single message sent out on that system. My pager is not operating on a unique frequency. All sorts of messages are being received by my pager at the moment. It does not happen to be buzzing, because they are not for me, but the signals are sent out for general reception and they are received generally; they are just not acted on by my pager. There is no difference between the technology employed in television and the technology employed in pagers so far as transmission and reception are concerned. The two clearly must fall within the same box.
Lord Phillips of Sudbury: Before I make a few short observations, I want to add to the comments of those who have already spoken on Amendment No. 14; that the dubiety expressed on the issues debated this afternoon gives the lie to the Minister's confidence that this is a clearly defined phrase.
I thank the Minister for his comments on Amendments Nos. 5, 9 and 11. He dealt with the origin and destination point. However, he did not touch at all on my main concern relating to how datagrams or search requests will fall in this Bill. Will they, as I think the drafting now intends, be treated as communications data, or will they be treated as communications having content entitling them to warrant prior to search and access? I should be grateful if the Minister would think about that. I believe that it has a very wide and deep significance for the Bill as a whole.
Lord Bassam of Brighton: I am not sure how wide and deep that significance might be. However, I acknowledge the noble Lord's point that perhaps my comments have not covered his observation that one cannot look at each communication, each piece of data, separately. The noble Lord made the point that one needs to look at it cumulatively, that one can detect patterns and that although there may be an analysis that applies to patterns, one can in fact detect something else. I entirely understand that point, and I undertake to reflect further on it. However, I do not believe that it poses to us a general problem that we have not already thought through in terms of the way in which the legislation is intended to work. I undertake to give further thought to that issue and to how this piece of the drafting affects that point.
Lord Phillips of Sudbury: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
6.15 p.m.
Lord Lucasmoved Amendment No. 6:
Page 3, line 25, leave out from ("which") to ("there") in line 30.
The noble Lord said: This amendment picks up a general question on the drafting of this part of the Bill. As it is expressed here, I am concerned that it fails to catch particular kinds of communications systems. First, if I choose to connect my private telecommunications system through a dish on my roof to a satellite, that appears to fall outside the Bill because under subsection (a), which I seek to delete, it is no longer attached directly or indirectly to a public telecommunications system, because public telecommunications systems are only those systems which have equipment in the UK.
My second point is that we appear to be in danger of having a definition of what falls within a private telecommunications system which will not mesh with similar definitions if they are employed in other countries, and thus leave loopholes where there is not total coverage of what can and cannot fall within similar legislation in other countries. From the point of view of the prevention of international malfeasance, that is a bad idea. It seems to me that our jurisdiction should depend on whether there is apparatus in the United Kingdom. If there is no apparatus in the United Kingdom, we clearly have something which is entirely outside our jurisdiction; but if there is apparatus in the United Kingdom, it ought to fall within our jurisdiction. I therefore propose that simplification. I beg to move.
Lord Cope of Berkeley: Some businesses have an internal telephone system which is free-standing and is solely the internal system, whereas in other businesses the more modern practice is to have an internal telephone system which is also connected to the external system. I cannot understand why there should be a separate regime, with regard to interceptions, for these two different types of internal telephone system. But if the words which my noble friend seeks to leave out remain in the Bill, a totally free-standing internal telephone system would be treated differently from one which happens to be connected to the public system as well. I cannot see the reason for wanting to treat them differently.
Lord Bassam of Brighton: I understand that Amendments Nos. 6, 7 and 8 would widen the scope of prohibition on interception to include interception of entirely self-standing private systems. I hope that that is a correct understanding of the amendments.
Under the Interception of Communications Act 1985, only the interception of communications in the course of their transmission by means of a public system is unlawful. The Bill extends this to make unlawful also interception on a private system attached to a public system; for example, an office or hotel network, or the telephones in a domestic household. This extension seeks to implement the requirement of Article 5 of the European Telecommunications Data Protection Directive.
1426
Framing the terms of the extension has not been without difficulty and we have done so cautiously in order to avoid inadvertently making any legitimate activity unlawful; for example, criminalising a teenager for picking up a second handset in his or her own home. I know that one might consider that to be somewhat fatuous, but it could happen and we could have the ludicrous position of criminalising that activity. We do not seek to do that. There is no legal requirement for the scope of unlawful interception to be further extended; while to do so in a way proposed by the amendment would include the interception of walkie-talkies, garage door and video player remote control systems and a whole host of other freestanding systems which we do not believe it would be right to make unlawful in this context. I am sure that the noble Lord, in moving the amendment, did not seek to make it unlawful in that context.
I hope that that explanation helps the noble Lord to withdraw his amendment and I look forward to hearing his reflections on those points.
Lord Lucas: I suspect that that convinces me. I shall certainly read Hansard, but in the meantime I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 7 to 9 not moved.]
Lord Lucasmoved Amendment No. 10:
Page 4, line 3, leave out ("for the purpose of ") and insert ("one of the purposes of which is").
The noble Lord said: I want to pick up the singularity of purpose in the Bill that telecommunication must have,
"for the purpose of facilitating the transmission of communications".
At times in my house I have used electrical cable for doing that because baby alarms are commonly sold on that basis. Indeed, wider networks are based on it, as are other means of communication. For instance, if it were not broadcast for general reception, the teletext system would be just such a communication system. There is the possibility of putting communications down other conduits and I suggest that one of the purposes should be telecommunication but not the sole purpose. I beg to move.
Lord Bach: We see where the noble Lord is coming from. The Bill does not state "sole purpose"; it states "for the purpose of". We would say that that probably implies the major purpose; not necessarily the only one, but the major purpose.
Amendment No. 10 seeks to widen the scope of the definition of a telecommunication system, to be found at Clause 2(1), to include systems only one of whose purposes is to facilitate the transmission of communications. We believe that the existing wording already provides for this. Perhaps by example I may put to the noble Lord the proposition that were technology in the future to be developed which permitted the National Grid to be used as a means of transmitting telecommunications, various adaptations

1427
to the grid would need to be made, such as the addition of routers and so on. The grid would become part of a system which had as one of its purposes facilitating the transmission of communications. As such, it would then fall within the definition in subsection (1).
Viscount Goschen: Will the Minister therefore confirm that he is confident that, for example, an e-mail system based in interactive TV and using TV signals would be counted as a telecommunication system rather than anything else?
Lord Bach: I should be far from confident in agreeing that, as the noble Viscount knew well when he posed the question. However, it is such an interesting question that I should like some time to consider it and will let him know whether I have the confidence that he requires me to have.
Viscount Goschen: Perhaps I may suggest that if the Minister is not confident he should accept my noble friend's amendment.
Lord Lucas: I hope that we shall persuade the Government to do that in due course. It will not have escaped the Minister's notice that interactive TV also involves signals broadcast for general reception, but intended to be received by only one person.
In this area, I accept what the noble Lord says is the Government's opinion, but I draw his attention to the many pieces of legislation in which the opposite view has been taken. I hope that he will give that some consideration. We have heard of "general purposes", "principal purpose" and many similar phrases in many pieces of legislation. If they have been unnecessary, I do not know why we have passed them. Therefore, I urge the noble Lord to take further advice, but in the mean time beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 11 not moved.]
The Deputy Chairman of Committees: If Amendment No. 12 is agreed to, I cannot call Amendment No. 13.
Lord Lucasmoved Amendment No. 12:
Page 4, line 8, leave out from first ("if") to end of line 12 and insert ("he does anything so").
The noble Lord said: In moving Amendment No. 12, I shall speak also to Amendment No. 13. The amendment is intended to make the set of definitions in the Bill general, rather than the complicated triplicate. If that turns out to be wrong, Amendment No. 13 is intended to leave out the third paragraph because it appears to me already encompassed by the first two paragraphs.
What I am really after is an explanation of why this particular set of definitions has been chosen. It looks as though the Government are trying to close a loophole, to paper over a crack, in the basic definition in which my Amendment No. 12 would result. As I cannot see what the crack is, I am disturbed that the
1428
Government should be able to see such a lacuna in the Bill and I want to ensure that what they are doing by way of this rather odd and complicated definition cures the problem that they see. I beg to move.
Lord Bassam of Brighton: I suspect that the noble Lord is seeking riddles within riddles, but I shall try to help him. Amendment No. 12 would extend the definition of "interception" to include any action which made a communication available to a third party in the course of its transmission, rather than simply the narrower list of actions contained in paragraphs (a), (b) and (c). I can understand that this more concise approach is at first sight attractive and has the advantage of simplicity. However, as with our extension of the tort of unlawful interception in Clause 1, the current wording reflects the care we have tried to take to avoid making innocent activity unlawful. Subsection (3) is another example of this. It ensures that the ordinary use of a radio receiver or television in a home is not made unlawful.
We are concerned that by extending the definition in the way the amendment proposes would catch a great deal of innocent activity. We do not want to do that. For example, I am advised that passing on any files sent to a computer to a third party would be made unlawful by virtue of subsection (7). In short, we are concerned that the offence of unlawful interception bites only where it should and we believe that the current wording achieves that aim and objective.
I suspect that Amendment No. 13 would have the reverse effect by trying to narrow the definition of interception to exclude the monitoring of transmissions made by wireless telegraphy. This limb of the definition is necessary to ensure that interception of mobile communications between two microwave dishes and of point-to-point radio communications is caught. We are obliged by the European Telecommunications Data Protection Directive to prohibit that.
I hope that that explanation enables the noble Lord to withdraw his amendment.
6.30 p.m.
Lord Cope of Berkeley: It seemed to me that the Minister said that if a file were received by me, for example, and I forwarded it to someone else, in being forwarded, the file would not be covered by the definition that he outlined. Having read the definition, I am not sure that I agree with that, but it is extremely complicated and I should not want to be cross-examined too closely on whether or not such cover is included.
I believe that if a file is forwarded by the communications system, it should be covered by the provision as much as one that is received. After all, it is a perfectly normal occurrence and is, in any case, just as much a transmission through the telecommunications system. If forwarded files were not covered by this

1429
legislation, that would be a loophole because one would have only to use that method in order to escape interception.
Lord Lucas: I very much agree with what my noble friend has said. I find myself in the position of not having understood to any degree the answer given by the Minister. I do not want to go on at length about the amendment in front of the whole Committee. However, I should be grateful if the Minister would ensure that I receive a written example of what harm would accrue if Amendment No. 12 were passed; in other words, what undesirable effects would be caused by the passing of that amendment?
I should also be grateful for some justification in writing as to why paragraph (b) of Clause 2(2)—
"so monitors transmissions made by … the system"—
does not cover the items in paragraph (c). Paragraph (b) seems to me a perfectly straightforward and sensible general clause which covers paragraph (c) in every respect. What is it about the items in paragraph (c) that means that they are not covered by paragraph (b)? Surely that raises the question as to what else is not covered by paragraph (b).
If the Minister is unable to provide it now, I believe that both those points deserve elucidation at length in writing. I hope that the Minister will confirm that he can provide that clarification.
Viscount Astor: Before my noble friend sits down, is he aware—I am sure that he is—that, as I understand it, coverage is needed on e-mail because an e-mail system which uses, for example, a terrestrial digital system sends only a general signal that says, "You have an e-mail". However, collection of that e-mail by the recipient is carried out through a dial-up process within a box. Therefore, subsection (2)(b) must cover not only the transmission of that broadcast to the individual, but presumably it must cover also, either via a cable or a telephone, the link to collect it. Therefore, my noble friend must consider how that fits in with the point that he makes.
Lord Bassam of Brighton: I am not sure how much more helpful I can be in relation to this matter. There are many clever pieces of elucidation bouncing around the Chamber. I shall pick up the point made by the noble Lord, Lord Lucas, although I believe that I had made it fairly plain. In phrasing the legislation, we must be terribly careful that we do not catch everything when, in fact, we want to catch something more precise. I believe that that is what we are trying to achieve in the drafting of this particular part of the Bill. I take the point that has been made by the noble Lord. If we are able to provide further information which will be of help and will perhaps persuade him that he does not need to return to this particular group of amendments, then, of course, we shall try, as ever, to be helpful.
Lord Lucas: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 13 and 14 not moved.]
Lord Lucasmoved Amendment No. 15:
Page 4, line 20, leave out from first ("if") to second ("the") in line 21.
The noble Lord said: In moving Amendment No. 15, I shall speak also to Amendments Nos. 16 to 18. I am concerned about the scope and reach of the Bill. To my understanding, my amendments would make a more seamless and watertight join with the likely regimes of other countries. I believe that it would be more simple if I were to listen to the Minister's reply first, rather than trouble the Committee with a lengthy explanation as to why I believe that the amendment provides an improvement. I beg to move.
Lord Bassam of Brighton: The noble Lord, Lord Lucas, adopts a novel approach to the moving of amendments. I shall try to live within the spirit of that.
As we understand it, Amendment No. 15 would, crucially, remove the words "and only if" from line 20. The words are used to make it clear to the reader that he should look only to subsection (4) of Clause 2 in order to understand the meaning of the phrase "in the United Kingdom" in the context of the interception of a communication. Without that restriction, there is a danger that the reader may look elsewhere in addition to this subsection in order to understand the phrase. For example, the words "in the United Kingdom" appear alongside the words "whether wholly or partly" in the definition of a telecommunications system in line 2 of page 4. I believe that the draftsman has used a similar device at line 9 of page 16, where the reader is directed to Clause 14(4) alone for a definition of the phrase "the authorised purposes".
Amendment No. 16 would criminalise interception carried out in another country which had effect in the UK. The criminal law must be precise, and this test is imprecise. An important question is: where does the interception of a wireless communication have effect? It is almost impossible to answer that question, and interception currently is not prohibited by the Interception of Communications Act 1985; to do so would make a criminal of anyone anywhere in the world who undertook the interception of a communication in the United Kingdom. We have no evidence that it is necessary to extend the scope of the offence world-wide. Generally, criminal law is limited to the jurisdiction of this country.
Amendments Nos. 17 and 18 would extend the definition of interception "within the United Kingdom" to include any interception of any communication anywhere, provided that the interception was carried out in the United Kingdom. As drafted, the Bill follows the precedent set by the current interception Act, which outlaws only interception of communications within the United Kingdom. As I mentioned previously, in the context of private telecommunications systems, we are cautious

1431
about extending further the scope of the offence, especially when there is no evidence that the existing scope is problematic.
I have explained our view of the noble Lord's amendments. I hope that in putting our response, he will now feel able to withdraw Amendment No. 15.
Viscount Goschen: I listened carefully to the Minister's explanation. In respect of my noble friend's Amendment No. 16, can the Minister clarify the point further? With the globalisation of telecommunications equipment, it is possible to envisage that someone may sit behind a desk in Singapore and intercept an e-mail sent from Milton Keynes to Portsmouth. Conceivably, they will have injected a virus into the ISP. However, I defy the Minister to tell me that that cannot be done. If it cannot he done now, I am sure that such an act will be possible next year.
Therefore, it is important to test how far the Bill can be taken with regard to the interception of communications. Clearly, we do not want to create a loophole where illegal activity could take place in havens. We want to ensure that the Bill tackles areas where criminal activity takes place and that proper sanctions can be taken against such criminals.
Lord Lucas: I would have asked the same question but would have phrased it less well.
Lord Bassam of Brighton: I am not a technocrat nor a technophobe, but I am sure what the noble Viscount says is right. If the technology to do precisely as he wishes does not exist this year, it will exist next year. I am sure we are all familiar with the Internet and the systems that are accessible.
The problem with Amendment No. 16 is that, if it were accepted, it would criminalise interceptions carried out in another country which had an effect here in the United Kingdom. The Government are trying to ensure that the criminal law is as precise as it can possibly be, notwithstanding the important point that both the noble Viscount and the noble Lord, I suspect, are making; namely, that, obviously, communications systems are global.
As I said earlier, the Government have no evidence that extending the scope of the offence world-wide is necessary. Our criminal law must surely be limited to the conduct of our own jurisdiction. That seems to be sensible, right and proper on the basis on which we conduct our business.
Viscount Goschen: I suspect that technology moves faster than the draftsman's pen on this issue. This legislation has to be made as future-proof as it possibly can be. Is the Minister seeking to ignore that such a problem could occur?
Lord Bassam of Brighton: I am not saying that the problem could not or would not occur. The problem is very real. I am saying that the Government are trying to act within the limit of our own legal system, understanding that only those matters occurring within our own jurisdiction may be criminalised.
1432
I appreciate the noble Viscount's point. I myself have had access to a K-World system which sends e-mails all around the world. I can quite see the problem that the noble Viscount described. The Government think that in terms of their own legislation that this is the best that can be done and that at this stage there is no need to seek to criminalise interceptions carried out in another country that might have an effect here.
Viscount Goshen: I accept the purpose of what the Minister is seeking to achieve here, but I do not accept his degree of confidence that this might not create a substantial legal loophole.
I understand that we are limited within the jurisdiction of the United Kingdom. But perhaps further thought could be given to the definition of the conduct; that is, where the interception actually takes place. If one could not phrase it in terms of intercepting a transmission domestically, I would urge the Minister to look at that issue quite seriously.
Viscount Astor: Before the Minister rises, perhaps I may ask one simple question. If somebody was in France and using a system there that intercepted an e-mail which had derived from this country, had been sent within this country and had been received by someone in this country—therefore, the interception was carried out abroad—would that be an offence under this Bill in this country? Would it be an offence in France? Is there an EL aspect to this? Have we consulted our European neighbours? One can dial up by telephone anywhere in the world and then plug into a computer. Therefore, it is where the person sits who is using the keyboard which is important. I realise that the Minister may not be able to answer this question immediately, so perhaps when he writes to my noble friend he will include an answer to my question also.
Lord Bassam of Brighton: I thought that the noble Viscount was going to ask me a simple question. It is believed that it would not be an offence because the conduct would have to be committed here. I understand that to be a general principle in criminal law. I am not a lawyer (although I live with one) but I believe that to be the case.
I am interested in what the noble Viscount, Lord Goschen, said on this. If what he said highlights something we have missed, I shall be very interested to know the noble Viscount's remedy. Perhaps there is some scope for further discussion on that point. But the Government must look at the criminal law in the light of our own jurisdiction where conduct is undertaken.
Of course, the noble Viscount is right and this legislation has to be made as future-proof as it can be. That is why the Bill is as complex as it is: the Government have tried to create a framework within which it can operate for a long period. As noble Lords will appreciate, the Interception of Communications Act 1985, though only 15 years old, has rapidly been overtaken by advances in communications. That is the problem we are attempting to tackle.
6.45 p.m.
Lord McNally: I regard future-proofing as very important. But does the Minister regard international compatibility as an aim of this Bill? That is a concern. We may be inventing crimes that are purely national for a system that is obviously global.
Lord Bassam of Brighton: The noble Lord makes a very important point. Of course we have to operate in an international environment. We live in a global telecommunications/communications system. The noble Lord will have detected that I have referred to various articles relating to the European directives. We are advised by them and by the internationality of the nature of the beast with which we are dealing. Those things have been reflected on in drafting the legislation. I do entirely accept the point the noble Lord makes.
Lord Lucas: There is a point here that requires further consideration. To take the obvious parallel to that, an alleged action by two Libyan gentlemen in putting a bomb on board an aeroplane in North Africa is a crime in Scotland because that is where the consequences occurred. The fact that those gentlemen were not extracted for a long time from Libya to stand trial is surely beside the point. If an action is a criminal action, and the important part of the action takes place in this country, it should be something which is subject to prosecution in this country. The fact that people are difficult to get at is a matter for other aspects of international law.
I give an example of something that might occur under this clause. Someone in France, and without leaving France, through his own clever devices, plants a bug in the communications system of a merchant bank in London. He is thereby able to follow the course of takeover transactions and to extract valuable information which is then made use of. Under this Bill as it now stands, I believe that he is not committing an offence, but surely that should be the case. If we are faced with difficulties in getting hold of and extraditing him, that is a different question.
Lord Bassam of Brighton: I am not sure that the noble Lord has added anything new to the debate. I am not sure that the Lockerbie example is necessarily the right one. I shall think more about that, but ultimately the offence was conducted in the air space over Scotland. Although it has taken us a long time to get to the position we are presently in, I think that it was right that we followed the approach we did in seeking to try that particular case. I shall reflect further on the noble Lord's words, but I cannot promise to go any further than that.
Lord Grabiner: On that point, the conduct that we are concerned with is the interception of a communication. The concept of interception is defined in subsection (2). If the modification or interference with the system took place in the United Kingdom, which, on the noble Lord's example, it would have done because the bug would have been placed in a
1434
merchant bank in London, I believe that that is conduct which would plainly be caught. It would have happened in the United Kingdom. Another part of the exercise is to tap in, and in the example given that is done in France. Such an example would be caught fairly and squarely by the terms of the Bill as now drafted.
Viscount Goschen: I suspect that that may be so, but deliberate online interference would not be caught. That is not physical interference—that is, planting a bug—but rather someone sitting at a desk in Singapore sending a virus over the line to the RSB which, in turn, sends information on.
A clearer and more probable example is that provided by mobile telecommunications. For example, a man may travel from South Africa to England with a South African mobile phone. We could be standing two streets away. I could call his mobile phone and that call may be routed via South Africa although we are both in the United Kingdom. However, that transmission could be monitored in South Africa.
There is a problem here to which we should certainly return at the next stage of the Bill.
Lord Lucas: I am grateful for all the efforts by Members on the Benches opposite to clarify this question. I shall read Hansard with great interest. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 16 to 18 not moved.]
Lord Lucasmoved Amendment No. 19:
Page 4, line 28, leave out from ("communication") to ("do") in line 30.
The noble Lord said: Here I seek a short explanation from the Government as to why they want to use the concept "in the course of its transmission" rather than just "interception of a communication" full stop. I beg to move.
Lord Bassam of Brighton: Amendment No. 19 would extend the applicability of the communications data exemption in subsection (5) to all references in the Bill to "the interception of a communication". For example, the conduct authorised by Clause 3(1) (interception with the consent of both parties) and by Clause 3(3) (interception by a telecoms company for service provision purposes) would include interception of the content of the communication, but not of its address. Those subsections would no longer be effective for authorising interception in order to acquire communications data.
Such a change would be disastrous for public telecommunications operators seeking to trace the originator of abusive phone calls by examining the communications data associated with such calls. Their behaviour would be rendered unlawful. The acquisition of communications data would be

1435
unlawful under Clause 3(1) too, even if both parties to the communication had agreed that this should take place.
The phrase,
"in the course of its transmission by means of a postal service or telecommunication system"
has been carefully chosen by parliamentary counsel to cover a particular set of circumstances. The course of transmission begins where a postal service or telecommunication system first begins to transmit a communication. In a telephone, the sound waves from the human voice first begin to be in the course of their transmission by means of a telecommunication when they are received by the microphone in the handset. They continue to be in the course of their transmission until they are emitted by the speaker.
Such phraseology ensures that one is not technically intercepting a communication if one is in the same room as someone using a telephone, and one happens to overhear what is being said. In the same way, listening to a voice from a speakerphone is not interception: the sound waves have left the telecommunication system on which they were transmitted, and are hence no longer technically in the course of their transmission. That is what we have in mind and why we have used that phraseology. I hope that that helps the noble Lord.
Lord Lucas: I thank the Minister for that extremely helpful explanation. I shall be able to look at the Bill in that context. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Lucasmoved Amendment No. 20:
Page 4, line 41, at end insert ("and where no use whatever is made of any other information which a person may need to have access to in order to obtain addresses and other data so comprised or attached").
The noble Lord said: This is one of the great nubs of the Bill as it is presently drafted; namely, the danger posed to all our civil liberties by giving government unfettered access to what they have smilingly called "communications data".
With so much of our life becoming electronic and with so much of that life consisting of movement from one address to another to obtain predetermined information, the picture of a person's life which can be built up with access to communications data goes way beyond anything which we have traditionally allowed people to obtain without a warrant. The point of the exemption here is to allow communications data to be obtained without a warrant.
The particular point which I am addressing in this amendment is that in order to obtain communications data, one very often has to obtain a great deal of other data too, particularly if one is trying to intercept a package-switch system. I am concerned that the freedom from the restrictions from this part of the Bill should not apply if there are not proper safeguards in place to make sure that that part of the information which is not communications data—that part of the information data which should properly fall within
1436
Part I—is safely handled by whoever is seeking to escape from the necessity for a warrant under this subsection of the Bill.
We shall doubtless return to many aspects of communications data. This is merely the opening shot in that war. But I hope that the Minister recognises the problem; namely, that if information is transmitted in "clear", we are allowing people to look at a great deal of information just in the course of gathering communications data which should be visible only with a warrant. If we are to allow such a process, proper safeguards must be in place. I beg to move.
Lord Cope of Berkeley: I rise only to agree with my noble friend. I emphasise the fact that one of the difficulties with the Bill is that it collects an enormous amount of information and is not targeted on the precise information which is required for the purpose of the police, the security service, the Customs and so on.
I accept entirely that that is in part because of the nature of the Internet and the way it works, particularly as regards such matters as package-switching and so on and the way that that works. It may be impossible to design a system which does not collect a lot of additional information. But that means that we should be even more careful about what happens to that additional information, what use is made of it and that it is properly protected. It is not information which is necessary for the main purpose of the Bill; that is, for catching criminals, terrorists and so on.
Lord Phillips of Sudbury: From these Benches, we associate ourselves with the general purport of the remarks made by the noble Lord, Lord Lucas, as I tried to indicate in relation to the earlier amendments which I moved.
We agree that this matter goes to the heart of one of the most worrying aspects of the Bill. My only concern about the amendment is whether it is back to front. We should prevent information reaching people who do not need it at all. But it will be interesting to hear the Minister's response.
Lord Bassam of Brighton: I suspect that we are fishing in the same pool and that we are not a million miles apart in terms of our intent. It requires us to think more generally across the legislation.
Amendment No. 20 would expressly prohibit the use of any information incidentally obtained in the course of identifying addresses and other data under subsection (5). In practice we believe that the current wording of the Bill already achieves that objective. I draw the attention of the Committee to subsection (5)(a) which states expressly that the conduct described must provide a person with only,
"so much access to a communication as is necessary for the purpose of identifying addresses and other data so comprised or attached".
Let us say that a person is obliged, in the course of his duties, to programme his computer to scan through the content of a series of e-mail packets in order to

1437
isolate those which contain addressing information. In scanning through other packets, he has access parts of the communication other than those which contain addressing information. So far so good. This is clearly permitted by paragraph (b). However, let us imagine that he now decides to retain those other packets which he has scanned through, or worse, to read them. In doing so, he has taken more access—I think we would all agree—to the communication than the Bill entitled him, and subsection (5) does not provide a defence for his conduct.
Certainly we recognise and understand the issue. It has been raised by the noble Lord, Lord Phillips of Sudbury, in an earlier debate. But we think that the way in which the legislation is drafted captures the issue that noble Lords have, quite rightly, attempted to address in this amendment, and the comments made thereto. Therefore, we do not think that it provides for unfettered access. It certainly closes off any line of defence. I hope that the noble Lord is reassured by that. I look forward to listening to his comments.
Lord Lucas: It seems to me that we are getting into a technical and legal definition of "access" here, which is not something to which I pretend to have immediate access, or to the arguments for or against. If the status is, as the noble Lord has expressed it—that making use of data to which you have access is actually further access rather than something separate—the Minister's argument stands and I am satisfied. Between now and Report stage I shall consider whether I really believe that to be the case. Meanwhile I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
7 p.m.
Lord Lucasmoved Amendment No. 21:
Page 4, line 41, at end insert ("or
( ) any conduct in relation to anything which has been delivered, without any deliberate intent by any person, to a final destination other than a final destination intended by the sender").
The noble Lord said: It is unclear to me whether under the exceptions we are allowing the innocent third party, or someone to whom a communication has been delivered in error, to deal with the matter in a way which is convenient and sensible to them without incurring the risk of liability. If a letter or fax ends up in the wrong place, one may well wish to read it to discover to whom it should be sent back. I should like to be assured that that sort of conduct in relation to a communication is not caught by the Bill. I beg to move.
Lord Bassam of Brighton: I think that my explanation will make it plain that we do not seek to create a problem here where really there should not be a problem at all. We are confident that the Bill as drafted has the effect of providing the exemption from the interception offence where the communication is delivered to a wrong address. The definition of "interception" is limited to interception of a
1438
communication in the course of its transmission by certain means. To take one example, a letter which has been delivered through a letterbox and is lying on a doormat is no longer in the course of its transmission—it has, after all, arrived—because it is no longer being delivered by the public postal service into whose care it was entrusted. Should it have been misdelivered, readdressing it and sending it on could not possibly constitute an interception under the Bill.
Lord Lucas: I am grateful for that comfort. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Bassam of Brightonmoved Amendment No. 22:
Page 4, line 41, at end insert—
("( ) In subsection (5) the reference to data comprised in or attached to a communication for the purposes of a telecommunication system by means of which it is being or may be transmitted includes a reference to any communication or part of a communication consisting of signals for the actuation of apparatus comprised in a telecommunication system by which they will be or may be received.").
The noble Lord said: Amendments Nos. 22 and 83 are designed to address a deficiency in the law highlighted by the recent House of Lords case of Morgans. They will ensure that there is legislative provision to allow the investigation and prosecution of dial-through fraud on telecommunications networks.
Dial-through fraud is the illegal accessing of outgoing telephone lines by using switch facilities to place calls at reduced or no cost to the caller. The primary motivation is to obtain telephone calls without having to pay. But there are further reasons: to avoid detection by call tracing; to facilitate computer hacking, which would otherwise cost a great deal in telephone charges; to exchange information with other protagonists by abusing voice mail; and to perpetrate other fraud-related action such as call-selling or premium rate service fraud.
The prosecution of dial-through fraud requires the evidence of dialled digits from a protagonist's telephone line. We think that monitoring those digits, both under the Interception of Communications Act and Part I of this Bill as currently drafted, amounts to interception. It follows therefore that the activity needed to monitor these digits should be warranted and will not be capable of evidential use by virtue of Clause 16. Clearly, it is in everyone's interests that such prosecutions can take place. The intention of these amendments is to ensure that they can.
It has also been brought to my attention that these amendments have caused some concern in relation to the Internet, with one interpretation being that they would allow the content of e-mail communications to be treated as communications data and therefore allow interception of e-mail communications to take place without the need for a warrant authorised by the Secretary of State. Although I do not agree that this is a valid interpretation of the wording, I want to place on the record that this is not the intention—I repeat the word "not"—of these amendments and that the Bill

1439
will require Secretary of State warranting for the interception of e-mail communications. I offer my assurance that the code of practice will clearly spell that out so that there can be no misunderstanding on that issue.
There is also the question of the point at which a visit to a website becomes a communication with the website. That is an interesting issue. Although I think that few would argue that the fact that I visited an airline website is the equivalent of me dialling the airline booking service and that the data should be treated in the same way, what I do when I am on the airline website is clearly more private and equates perhaps more closely to the content of the communication when I am through to the airline booking service. We think that this distinction is reflected in the amendment. It is clearly a difficult distinction in practice, and my officials are already in dialogue with industry representatives on that point to find a technical solution. This specific point will be addressed in the code of practice. I can offer that assurance to the Committee.
On Amendment No. 74, removing subsections (2) and (3) would leave both the investigating agency and the provider of communications data open to criminal or civil liability in respect of any actions they carried out under an authorisation or notice. The most obvious area in which actions may be taken would be under the Human Rights Act. But it is possible that, for instance, a customer could sue his communications service provider for breach of contract or breach of confidence if there was no cover provided by the Bill.
Regarding Amendment No. 75, I do not believe that adding the word "expressly" makes any material difference to this subsection. A person either is authorised or he is not. If he is not, any actions carried out by him under this section are not lawful, and it leaves him potentially liable under civil and criminal law, including actions under the Human Rights Act.
Although Amendment: No. 77 would apply the definition of "communications data" to Part I in its entirety, rather than just this chapter, the term "communications data" is not used in Chapter I, so this amendment would have no effect.
I believe that the intention behind Amendments No. 78 and 80 is to restrict the types of data which may be collected under this chapter. I think that there are two important points to make here: first, the whole point of this chapter is to place on a clear statutory basis that which already occurs. The Data Protection Act already allows holders of communications data not restricted by any definition to supply it for certain purposes. Secondly, this Bill is not about making communication service providers start to collect data which they do not already have the capability of collecting. This is what Clause 21(7) is designed to achieve, and it was drafted in response primarily to industry concerns.
Amendment No. 79, as I understand it, would tighten the definition of communications data so that it could not indicate any of the content of the communication. But if a person phones an airline
1440
booking service, does that not indicate that in all likelihood the communication will be related to airline bookings? This amendment would mean that the telephone number of the airline booking service could not be treated as communications data and restrict the use of the data so tightly as to be effectively unworkable, which I am sure was not the intention of the amendment.
Amendment No. 82 seeks to restrict the third category of communications data (i.e. not addressing information or usage information) to data which serve to identify persons to whom the communication service is being provided. While this category of data may not in itself identify anyone, it may well provide an invaluable lead which would enable the person to be identified. This is necessary, in our view, because it is so easy for those who seek to evade the law to purchase communications services without giving a name, address or other contact details.
I trust that what I have said will help noble Lords who are moving other amendments and that, having heard my responses, they will feel able to withdraw their amendments and accept the Government amendments. I beg to move.
Lord Cope of Berkeley: First of all with regard to dial-through fraud, the noble Lord the Minister may recall that I mentioned this at Second Reading. It is important for this issue to be tackled, but at the same time I am not absolutely sure that it has been fully tackled in a satisfactory way by the Government amendments. The noble Lord himself said that the amendments in themselves have not proved enough to reassure some people who are concerned about this matter, but that the code of practice would go further. That may be so. We are not at the moment in a position to judge that because we have not seen the code of practice, but the Minister almost promised that we would see the code of practice before Report stage. I think that would be most helpful. The Minister nods "yes" from a seated position, and I take that as confirmation that we shall see the code of practice later and be able to return to the matter if we wish to.
There are two amendments in this group standing in my name. The first one, Amendment No, 77, concerns an extremely small point and is no way comparable to the government amendment. It attempts to extend, as the noble Lord said, the definition of communications data to make it apply to Chapter I as well as to Chapter II. The Minister seemed to be under the impression that the phrase "communications data" did not occur in Chapter I and therefore did not need to be defined. I did have a number of instances of it, but I have lost all but one of them for the moment! However, if the noble Lord will look on page 8 at line 30, he will see communications data referred to there. There are other examples, but I do not think the expression is defined elsewhere.
This whole definitions business is difficult, as has already been mentioned. With regard to Amendment No. 79, the Minister is entirely correct in suggesting that I would not wish to cause the difficult effects that he has mentioned. I shall therefore not press that

1441
amendment, and I am grateful to him for the explanation he has given. It will be necessary to make sure that the wording is satisfactory.
Lord Phillips of Sudbury: If I may, I should like to address a few comments to Amendments Nos. 22 and 83, which have been dealt with by the noble Lord, Lord Bassam of Brighton. They really come back to what I was seeking to impress upon the Minister in talking earlier about Amendments Nos. 5, 9 and 11. It seems from these two amendments—I should be grateful if he would correct me if I am wrong—that it is the Government's intention that HTTP requests, which I understand are hypertext transfer protocol requests for individual pages from a web server or interrogation of search engines, along the lines I was referring to in connection with earlier amendments, are now to be considered as communications data matters and not as issues relating to content, which would bring into play Chapter I of Part I of this Bill.
I am sorry that this matter has to be put in such technical terms, but, if that is so, we would say that is a really massive breach of the privacy entitlement of citizens of this country, while well understanding that the ills—dialled-through frauds and the like—towards which these amendments are addressed are very serious matters which do indeed need to be contained by effective legislation.
I do not for a moment pretend that it is at all easy to strike the balance between, on the one hand, cutting out those sorts of ingenious fraud, and, on the other, not engaging in the sort of discretionary intervention in the facts pertaining to individual citizens in the way apparently permitted by these amendments, but I would be grateful if the Minister would confirm that these amendments would confine the two matters of the HTTP requests for individual pages from the web server and the interrogation of search engines to the lesser category of communications data.
7.15 p.m.
Viscount Goschen: Picking up on the points made by the noble Lord, Lord Phillips of Sudbury, and referring to the distinction which the Minister sought to draw between visiting a website and having address information and actually communicating with that website, could the Minister offer the Committee his views on whether the exchange of so-called cookies or pre-packaged information between a visitor to a website and the website itself would fall into the first or second category? There would seem to be something of a middle ground.
Lord Bassam of Brighton: I will try to find the answer to that one for the noble Viscount. His question is a very good one. I must say that this debate is very helpful because we are getting more and yet more pieces of technological verbiage. They grow by the hour. "Cookies" is one of them and HTTP is another one.
1442
To pick up the point made by the noble Lord, Lord Cope, regarding my explanation that there were no mentions of "communications data" in Chapter I, I think he will find that it is only in the reference to "related communications data". That is to be found in Clause 19.
Referring to the point made by the noble Lord, Lord Phillips of Sudbury, as we understand it, the term "interrogation of search engines" is a communication, and HTTP requests are also included in the term "communications data". I hope that clarifies the point. I would say to the noble Viscount, Lord Goschen, that I will write to him on the subject of cookies. We will try to sort out that very interesting point.
Lord Lucas: I apologise for prolonging the debate, but it seems to me that we must bear in mind that we are not seeking in any of our discussions to deny the Government access to this information. All we are discussing is under what conditions this information—to which, as I understand it, Uncle Tom Cobbley and all seem to be able to have access—requires a warrant. It appears that under Amendment No. 22, which is drafted to deal with a real and specific ill, it is quite likely that this Government have opened up to inspection by all sorts of people a whole wealth of information which was not otherwise intended to be open in this Bill. That seems a wrong-headed approach to the individual's rights and civil liberties. If such information is required, the Government can obtain it through a warrant. That may a little tiresome but can be done. The Government should suffer a little inconvenience in obtaining warrants to safeguard the civil liberties of the vast majority of people going about their ordinary business and messing about on the Web. They should not have their private affairs pried into by all sorts of government officials on their own recognizance.
The Government are getting the balance wrong. There is an ill to be dealt with but the Government do not seem to recognise that the consequences they are inviting far outweigh the benefits of not having to be troubled with obtaining warrants. One has always thought of the Labour party as having liberty somewhere at its heart. Surely there is a spark of that left in the Government and they recognise the damage they are doing adopting a cavalier disregard for individual liberty in order to pick off a small number of pestilential malefactors. That attitude should not be part of any government—let alone one made up of the Labour party.
Lord McNally: We are asked not to move Amendments Nos. 74 and 75. The Bill introduces more draconian concepts than any of the existing legislation that it is supposed to consolidate. I speak as a layman. I am sure that the parliamentary draftsmen are operating from the best of technical grounds but I worry when I read, at Clause 20(2):
"Conduct to which this Chapter applies shall be lawful for all purposes if—
(a) it is conduct in which any person is authorised or required to engage by an authorisation".

1443
Our amendments, which we will not press at this stage, are an attempt at some tightening. The Minister seems strangely impervious to the criticisms uttered by the noble Lord, Lord Lucas, in a rather robust way but felt in all parts of the Committee. The Government seem to be taking some very large sledgehammers to the nuts they want to crack—and we are not sure that in every case, those nuts require such a draconian approach.
Lord Bassam of Brighton: I take to heart the comments made by the noble Lords, Lord Lucas and McNally, but it is a question of balance. I cannot agree that the nuts we seek to crack are worthless. They are real problems. Looking at the history of the interception of communications, perhaps it has not been sufficiently regulated in the past. We are trying to achieve balanced regulation that protects the civil rights and liberties of the individual. I come from that stream of philosophy within the Labour party and have argued that course throughout my political life.
There is another side. We have to deal with evil and nuisance. The interception of communications that the Bill seeks to permit addresses precisely those matters. We need those powers to be effective. The narrowing sought by some amendments would undermine the important and powerful needs not just of the Intelligence Service but of the police and a range of other agencies. None of your Lordships would seek to render that activity beyond use or of little value. After considering the case for these powers and the controls and checks on them that the Bill contains, I am entirely convinced that we are getting into the right territory.
Throughout, we are informed by the Human Rights Act and its impact. That framework will serve us well and protect the individual's rights, freedoms and liberties. Sometimes one can see more conspiracies than exist—but we are right of think of them because they are the worst-case example. I invite noble Lords not to move the linked amendments. The spirit of getting the balance right is one we all share.
Lord Lucas: Before the amendment is put to the Committee, I want to point out that the Government already have the power they want in Amendment No. 22. It just requires a warrant.
On how many occasions in the past year—or whatever period for which the Minister has data—did the Government use, or might they have used, the powers in the amendment? If there were 1,000 or 10,000 occasions, it might be reasonable not to plague the Home Secretary with that number of warrants in future. But if such a warrant was issued only 20 or 30 times a year, a few extra interception warrants under Part I would be a small price to pay for not endangering the liberty of the citizens to look where they have wandered in their travels through the Web.
Given that a large part of the Web is composed of unsavoury if not illegal material, a substantial proportion of our citizens must visit such sites from time to time. I am sure that the Minister has never done such a thing. To place such data on public files and make them available to all sorts of people—as if every visit one made to a X-movie or an Ann Summers shop
1444
were recorded—would be entirely inappropriate. One might consider doing so in the case of a major evil but if such occurrences are relatively minor, the Committee should not think of passing Amendment No. 22.
Lord Bassam of Brighton: I respect the integrity with which the noble Lord posed his question but I do not have those data in my back pocket. I will see whether I can provide some useful information further to elucidate the matter. The noble Lord's request is not unreasonable on the face of it, so I shall reflect on his point.
As to whether I would wander into a website other than where I might want to be, I am not sure that I have the competence—but perhaps that is an admission too far. I will ascertain what information we have and whether we can reasonably disclose it.
The Deputy Chairman of Committees: The Question is, That Amendment No. 22 be agreed to. As many who are of that opinion will say, Content.
Noble Lords: Content.
The Deputy Chairman of Committees: To the contrary, Not Content. The Contents have it.
Lord Lucas: Not content. I am not content that the amendment should be moved. The Governmmt have provided no proper justification for it.
The Deputy Chairman of Committees: The Question is, That Amendment No. 22 be agreed to. As many who are of that opinion will say, Content.
Noble Lords: Content.
The Deputy Chairman of Committees: To the contrary, Not Content. The Contents have it.
Amendment agreed to.
Lord Bach: My Lords, I beg to move that the House do now resume. In moving this Motion, I suggest that the Committee stage should begin again not before 8.30 p.m.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

National Health Service
7.30 p.m.
Lord Harris of Haringeyrose to ask Her Majesty's Government what response they have to the issues raised and recommendations made by the Commission on the National Health Service, chaired by Mr Will Hutton, and published as New Life for Health in April 2000.

1445
The noble Lord said: My Lords, perhaps I may, first, say how nice it is to see what I assume to be a select team of noble Lords in your Lordships' House this evening, given the rival attraction of the England versus Portugal match. I am particularly pleased to see that this evening's short debate has attracted two maiden speakers. The noble Lord, Lord Shutt of Greetland, adds to the list of distinguished noble Lords from a local government background, as leader of the Liberal Democrat group on Calderdale Council. I am sure that the noble Baroness, Lady Northover, would have had a much more distinguished local government career had she not had the misfortune to stand against me in the Hornsey Central ward of the London Borough of Haringey some years ago. I am sure that both of tonight's maiden speakers will make many more speeches in this House and, perhaps on future occasions, to rather more listeners.
I shall start by declaring an interest. New Life for Health is the report of an independent commission set up by the Association of Community Health Councils for England and Wales. The decision to set up the commission was taken while I was still employed as director of the association, although that decision was not in fact actioned until after I had left.
It is, of course, an appropriate time to examine the issues of the public interest in the NHS and how best to achieve a full and effective system of accountability. The NHS remains enormously popular. A poll reported in the commission's report found that 63 per cent of people regard the NHS as the most valuable institution in the country, compared with a mere 12 per cent who feel the same about Parliament.
Nevertheless, the NHS is in need of modernisation. As other public services respond to changing expectations of their users, so must the NHS. That is why the Government are so keen to promote new initiatives like NHS Direct and walk-in medical centres. It is crucial also to change the balance between the professional and the patient. Patients should not only be empowered, but should also be full partners in the decision-taking concerning their own care. Yet at present, although the vast majority of patients believe that they should have a lot of power over the treatment that they receive, only one-fifth of them believes that they do so in practice.
No doubt greater flexibility in services to meet patients' needs will be part of the Government's new national plan for the NHS. To ensure this, the Government announced their intention to fund the largest sustained real increases in resources to the NHS ever—at the end of the five-year period, we will have seen a one-third increase in the funding of the service in real terms after allowing for inflation. No one should underestimate the impact that this will have, particularly if it is accompanied by a greater emphasis on clinical outcomes, disease prevention and a reduction in inequalities in health status.
However, I rather suspect that the NHS may still remain a rather paternalistic structure, doing what is deemed to be best for people rather than listening to what they want and responding accordingly. A
1446
national plan does not suggest that we shall be moving towards a decentralised locally-accountable model of health provisions. Indeed, the centralist versus the localist debate has been present throughout the history of the NHS, but centralism has always won in the past. So much so that Nye Bevan promised that the sound of a dropped bedpan would echo all the way to the Secretary of State and that, in practice, Ministers would be accountable for all within the service.
New Life for Health identifies a series of weaknesses in the accountability structure of the present NHS, most of which will be familiar to your Lordships; for example, the commission's report talks of the limited powers of the health service ombudsman, the weakness of community health councils as the local patients' watchdogs and the failings of the NHS complaints procedure—long-winded, confusing and, apparently, biased against the interests of those with legitimate grievances. It also mentions the issues surrounding appointed boards at local level answerable to the region or to Quarry House, not to the local community, and so on.
New Life for Health also makes a series of proposals to remedy this democratic deficit. These are, inter alia: that the NHS should have a written constitution (a sort of mission statement dressed up as a Bill of rights), including clear commitments to openness and to equal opportunities and incorporating the central elements of a patients' charter; that the NHS itself should become a public corporation, operating at arm's length from Ministers with an independent board—a sort of super-quango, and even then perhaps not a quasi-autonomous non-governmental organisation but a totally autonomous non-government organisation; in fact, a "tango".
The report also proposes that there should be a new system of democratic accountability at local and regional levels, perhaps involving direct elections to the relevant bodies; that CHCs should be strengthened; that complaints should be dealt with by independent review panels; that parliamentary scrutiny should be strengthened, as should the powers of the NHS ombudsman; and that there should be greater lay representation on the Care Standards Commission, the General Medical Council and other bodies.
While I broadly welcome and support these proposals, I believe that there is some logical inconsistency here. It is difficult to reconcile a public corporation structure with greater democracy and accountability. Parliamentary scrutiny of Ministers may not be as rigorous and as searching as it might be, but it is better than nothing. An autonomous public corporation would, in practice, be subject to only the most limited accountability. Unless its boards were directly elected—a New Life for Health does not suggest such a step—it is difficult to see how the structure would be more accountable than the present arrangement. Moreover, the locally and regionally elected structure that the report proposes would have to operate within a framework laid down by an unelected and unaccountable public corporation. That does not seem like a happy arrangement to me.

1447
Nevertheless, this inconsistency is not a reason for the Government to dismiss New Life for Health and its recommendations. However, I fear that I can guess the response that we shall hear from my noble friend the Minister at the end of the debate. I can almost hear him now: "This is an interesting report. A welcome contribution to the national debate about the future of one of our great institutions", and so on. "It raises big issues, important issues and even fundamental issues", et cetera. "It is, however, unreasonable to prejudge the outcome of the consultation; specific responses will have to await the publication of the National Plan. The Government are grateful to the commission for its work", and so on—and everything would perhaps be lodged neatly in the long grass. It is possible that I misjudge my noble friend and his officials. I certainly hope so.
If this debate is to be considered as an early part of the consultation on the national plan, perhaps I may conclude by making some practical suggestions for inclusion in that plan. I am assuming that the plan's main burden will be to make the NHS more responsive to the needs of individual service users; and that will be welcome. However, the issues raised in New Life for Health about the democratic deficit within the NHS must also be addressed. Accordingly, the national plan should set out a very clear statement of what the citizen should be able to expect from the NHS and what redress there will be if those expectations are not met. In essence, this will be the constitution for the NHS called for by New Life for Health. If the redress arrangements are sturdy enough, they will remove some of the trend towards litigation that we currently see.
There should also be a commitment to strengthen the patient voice—stronger and better resourced CHCs, acting as effective advocates for the interests of individual patients and for the needs of their local communities. There should be a dominant lay presence in all the key institutions of the health service, including—if not especially—those historically dominated by the professions. There should also be a new seamless one-door complaints system, which has as its core an adjudication system for disputes that is independent of the service providers and of the professionals.
As noble Lords will have gathered, I am not convinced of the case for an arm's length public corporation. However, there should be a board overseeing the NHS, one which involves not only Ministers and senior managers but also some independent members appointed on proper Nolan principles. This board should be answerable to Parliament via a strengthened Select Committee of another place and a parallel Select Committee of your Lordships' House.
There should also be a commitment to integrate the NHS regional structures with the nascent regional bodies being set up around the country. In London I believe that the Mayor should be able to appoint a chairman and board for the greater London region of the NHS. For those who think this is a frightening proposal I point out that the Mayor already appoints
1448
the London Development Agency, whereas elsewhere in the country RDAs are appointed by my right honourable friend the Deputy Prime Minister. Therefore, it is possible to have separate institutions directly accountable to a regionally elected structure.
Finally, at local level, those responsible for the NHS should be directly elected. There is provision in the Local Government Bill, currently in another place, for a variety of forms of local governance. One that has so far excited little comment would involve a directly elected mayor and two or three other directly elected executive officials—perhaps the local commissioner for education and for social care services. Why could we not have a locally elected commissioner for health services, directly accountable and directly answerable? Such an arrangement would strengthen the NHS, reinforce links with the public it serves and would at a stroke eliminate that democratic deficit so eloquently identified in New Life for Health. Hook forward to my noble friend's reply.
7.40 p.m.
Baroness Northover: My Lords, I cannot say that I have exactly been looking forward to making my maiden speech. But the kindness that has been shown to me from all quarters of this House has reassured me that perhaps I shall survive.
I have been struck by the extraordinary courtesy shown in the debates in your Lordships' House. The staff, too, have been outstanding. I have no idea how they do it, but they seemed to know me before I even reached the door. They gently lead me back from some corridor's dead end; they steer me where I should be going. Your Lordships may soon see me sneaking in my three young children because I live in hope that if at least a little of such courtesy and kindness rubs off on them, life at home would be quite transformed.
I used to teach 20th century history of medicine at University College London. I am therefore especially grateful for the chance to speak in this debate today. I should like to thank the noble Lord, Lord Harris of Haringey, for this opportunity. As he knows, I have followed his career with great interest for many years, for I am a resident of Haringey, where he was leader of the council.
It is also a privilege to speak in the same debate as the Minister, the noble Lord, Lord Hunt of Kings Heath. Many years ago I was appointed as a member of Camden and Islington Family Practitioner Committee. I attended a training weekend at which the noble Lord, in his role as chair of the National Association of Health Authorities, took a leading part. I admit that I was most impressed by him. I thought that he was someone who should go far. Little did I realise how far that would be!
The noble Lord, Lord Harris, was, of course, the chair of the Association of Community Health Councils. We must congratulate the association for commissioning this study, itself chaired by another formidable Haringey resident, Will Hutton. The report begins:
"The NHS is Britain's greatest and most prized national institution".

1449
I could not agree more. But for the chance of history, the NHS would not have come into being at all. Those at home in the Second World War looked to a brighter future which included freedom from the fear of destitution when ill. Then morale boosting propaganda encouraged similar expectations among the troops. But, just as importantly, the voluntary hospitals, so often in financial difficulties prior to the war, came during it to rely upon the state. Many young and ambitious doctors began to climb the medical tree not through appointments at home but in the state-rewarded army medical service. These unique circumstances brought about the NHS. If we allow it to crumble, we shall not reinvent it.
So I welcome the report's assumption that there can and should be a comprehensive healthcare system. It is not a matter of how best to take a scalpel to it. The report points out that the NHS is cost effective by continental or American standards. And yet, as we all know, the NHS has serious problems. The NHS took on all the patterns of pre-war years—over provision here, no provision there. It has never been universally comprehensive. Throughout its 50-year history a major task has been simply to try to even out these problems. Change has been difficult, especially because it has not been lubricated by sufficient funds. Decisions are made in secret; patients often feel excluded, ill informed, powerless. The staff know only too well how debilitating constant, ill directed change and vague threats can be.
Will Hutton and his team argue for a written constitution for the NHS to make more explicit what the NHS stands for and what each citizen is entitled to. They also recommend that the NHS should be at arm's length from governments, incorporated perhaps like the BBC.
Neither of these proposals by themselves will solve the long-term problems of an underfunded service. Who will make best use of that constitution? Probably not those receiving the poorest care. The BBC may have greater freedom than the NHS to develop its own strategy, but it has scarcely been protected against the vagaries of under-resourcing.
Assessment, audit and evidence-based medicine are some of the tools for the future improvement of the service. But that too means adequate resourcing. The establishment of the National Institute for Clinical Excellence is welcome, but it will not make a difference if there is not sufficient investment in it. As yet it has reported only on one drug, Relenza.
If the National Health Service is to remain a much loved public service, it must tackle the problems of indifferent standards, lack of transparency and inequalities of access. It must see rising expectations as a positive not a negative challenge. I welcome the commission and its report, with its imaginative proposals for the future of the NHS. But in the end such changes would be to no avail unless the NHS is adequately funded.
1450
I thank noble Lords for their kindness and patience in listening to me today. I look forward very much to participating in other debates on health and the NHS in the weeks and months to come. I am sure that there will be a great deal that we shall wish to discuss.
7.47 p.m.
Baroness Massey of Darwen: My Lords, first, I congratulate the noble Baroness, Lady Northover, on her maiden speech. It is not long since I delivered my maiden speech. I assure the noble Baroness that it seems like a long time ago, such is the rapid assimilation into your Lordships' House. I realise that the noble Baroness will have much to offer from her wealth of experience and that her stimulating speech was just a taste of things to come.
The noble Baroness has had a distinguished career, having been a researcher, academic, negotiator, politician, parliamentary candidate and a member of a myriad of organisations. She is currently chair of the Women's Liberal Democrats. She has also found the time to have three children. I am told by a reliable source on the Liberal Democrat Benches that she once presided over a conference debate when she was eight and a half months pregnant. The topic was population explosion! She must also have a keen sense of irony!
I thank my noble friend Lord Harris of Haringey for tabling and introducing this debate in his customary vigorous fashion. I admit some surprise that this report has not been so widely publicised as I would have expected. It certainly deserves, in the words of the report itself, a "healthy public debate" of longer duration than our allotted time this evening.
I read New Life for Health on a plane returning from work in a central Asian country, part of the former Soviet Union. In comparison with the problems of that country, with its health and other services crumbling, the problems of the NHS seem light indeed. However, as the report points out, we have high expectations of the NHS and a growing tendency to complain and speak up if we feel that we are not being well served.
The report states:
"A gap has opened up both between what the NHS is able to deliver and the expectations and needs of its users, and between its original principles and current practice".
This is strong criticism. The report rightly focuses on accountability and on developing structures appropriate to individuals and to communities. My noble friend Lord Harris discussed that issue.
There is much to say, and much has been said. I want to confine my remarks and questions today to the issue of inequalities in health, an issue to which the report referred at several points. The earlier report Saving Lives: Our Healthier Nation also emphasised the inequalities following the Acheson inquiry of 1998.
Inequality in health exists due to several factors: standards, policy, priorities and so on. All this is well known and fairly obvious. Florence Nightingale's Notes on Nursing recognised that,
"the same names may be seen constantly recurring on workhouse books for generations…death and disease are like the workhouse: they take from the same family, the same house or the same conditions".

1451
Things have improved, but we can still predict morbidity and mortality to a certain extent. They relate to inequality.
It is clear that no single agency such as health can improve people's lives without collaboration with a whole range of other agencies, both statutory and voluntary. Individual lifestyle also counts, and the greater emphasis in recent years on prevention of illness is to be welcomed.
I want to highlight some of my concerns about the inequalities mentioned in the report. In doing so I shall refer to the health improvement programmes set up in consequence of the White Paper The New NHS: Modern and Dependable. Following a Royal Society of Medicine symposium held in 1998 to consider the implementation of these programmes, a report was produced. One chapter considers learning from experience in the NHS, termed "the good, the bad and the ugly". The "good" includes a free and comprehensive service; the "bad" includes the NHS as an illness service rather than as a service working in partnership to tackle wider health determinants; the "ugly"—this is where I return to my theme of inequalities —relates to the wide variations in health, healthcare and clinical standards.
It seems to me that the eradication of inequality in health requires stated government commitment and determination, which we have. The previous internal market, with its lack of consideration for equity, has been dismantled, but there are still problems with allocation of resources and budgets within the NHS. There are problems with assessing needs and performance; national data need to be supplemented by local data. I understand, for example, that information according to ethnic group on waiting lists is not available nationally. This seems to me to be inverse racism. We need to know about issues specific to particular groups in order to plan and monitor interventions. We need to involve these groups in planning.
Delivering equity in health demands good relationships between partners at a local level. Accountability is all very well, but local government has problems with getting people to stand for election, getting representative samples of candidates and getting people to vote. Changing structures is not enough; this is about changing mindsets—and that can take a long time. It is essential that primary care groups and trusts have good representation from a variety of ethnic backgrounds and from diversity in society. It is essential that the voluntary sector, with its expertise on specific groups and issues, is involved.
An improved Patient's Charter is suggested in the report, together with an effective complaints procedure and greater participation in decision making. I suggest that for some individuals and groups, support and advocacy from community health councils or civil society organisations will be essential for this to work. Community health councils are key institutions; they have a wealth of experience in research and advocacy for vulnerable groups such as the elderly, those with disability, children, and ethnic minorities. They are well linked to local communities.
1452
In conclusion, I feel that the report raises many issues of importance for one of our publicly recognised great institutions. I look forward to the Minister's comments on the following issues: needs assessment; structures and policy; training; advocacy; support; and in particular on how all this relates to equity in health, so that, in the words of the report, equity does not remain,
"subordinate to the desire to promote a narrow concept of efficiency".
7.54 p.m.
Lord Shutt of Greetland: My Lords, it seems that at the start of a maiden speech the traditions of this House are such that one has to do certain things—that is, to give some idea of first impressions and to give a little insight into the speaker.
As to first impressions, a series of hurdles from a visit to Garter, to the introduction, to today. It then gets more and more serious. The warm welcome from all sides of your Lordships' House—as was mentioned by the noble Baroness, Lady Northover—is quite incredible; the clear possibility that there can be fundamental disagreements in a spirit of personal friendship; the kindness and support given by the talented, interested and enthusiastic staff of the House is something which comes so clearly to the new Member. The insights in regard to me will no doubt evolve over the next few minutes, not least in the matter of declaration of interests.
Before proceeding I must also pay tribute to my family, who have been such a source of strength to me over the years: to my 95 year-old mother, Ruth, who is keenly interested in what is going on from afar; to Margaret, my wife of 35 years standing this very day; and to my children, Christine, Richard and Andrew.
Moving to the document before us, New Life for Health was commissioned by the Association of Community Health Councils in England and Wales. But the commission itself saw fit to commission an opinion poll and sought funding from the Joseph Rowntree Reform Trust Limited. I now declare an interest as a director of that non-charitable grant-making trust. In so doing I should say that that association over the past 25 years—and membership of its sister trust, the Joseph Rowntree Charitable Trust—has given me a tremendous personal interest and insight into many constitutional and democratic issues. Joseph Rowntree's generosity in 1904 has been good for democracy.
Like many other maiden speakers I feel a certain trepidation about today—even more so when the subject is health. It is not a subject that I have made my own; it is one that I have rather shied away from. But I do not shy away from democracy.
The report contains the words, "This popular institution". Within its 132 pages the book refers to the whole panoply of the National Health Service—the trusts, the committees, the groups and so on; there is barely a wasted page. It suggests several substantial reforms that one might call "root and branch". In principle, it contains ideas to which I am naturally

1453
attracted—such as issues of greater accountability, the regional dimension and, indeed, proportional representation.
But three issues stand out. In line with the noble Lord, Lord Harris of Haringey, I query the creation of the NHS as a public corporation. I query, for example, the very important decisions that the Government have made to increase resources by 6.1 per cent per year over four years. Would this have happened had it been an independent public corporation? Would there have been the clout for that to happen? I am not certain about that. Indeed, when the Human Rights Act comes into effect and when eventually the Freedom of Information Bill becomes law, they will have a fundamental effect.
The second issue relates to the consumer, normally referred to as the patient. On page 28 of the book it states:
"No longer can doctors, clinicians, health managers and politicians decide what they consider to be the public interest in health behind closed doors with only nominal consultation, and expect their decisions to remain unchallenged".
That is true. But the representatives who are the challengers will face an increasingly difficult task ahead. There is a suggestion about holding specific health authority elections. Are there sufficient people who would be prepared to stand for public election to these posts? Not only do we have problems with turnout in, for example, local government elections, but we also have problems in persuading people to stand for election. It seems to me that a greater awareness of citizenship and a sense of civic duty will be needed if those ideas are to come to pass. I declare a further interest as the treasurer for the Institute for Citizenship.
Thirdly, we come to elected bodies. My final declaration of interest is that I am still an elected member of the Calderdale Metropolitan Borough Council representing the ward of Greetland and Stainland. I have fought 15 elections. It would be interesting to know, in this unelected House, how many elections the 700 or so Members have contested.
Can we sustain local government elections and local health authority elections? Can we stand that specific tier? In my view, local government has been debilitated year on year over very many years. Powers have been in decline, whether through Acts of Parliament or transfer of resources such as SRBs—single regeneration budgets. Even over the past few years we have seen the plethora of partnerships that are now taking away resources from local authorities and the accountability of the members.
As far as the new local government is concerned, the jury is still out. However, one feature which I believe may do well in that new local government is the formation of the new scrutiny committees. The community health councils could well be strengthened on that model.
In conclusion, structures in a complex undertaking must be understandable and accessible to the people; namely, consumers who are patients, and their relatives, at their most vulnerable time.
1454
New Life for Health is a valuable contribution to this debate in your Lordships' House. I trust that the Minister, the noble Lord, Lord Hunt of Kings Heath, will say, in his final remarks, that "This work is not in vain".
8.2 p.m.
The Lord Bishop of Birmingham: My Lords, I know that I speak for your Lordships' House as a whole in congratulating the noble Lord, Lord Shutt of Greetland, both on his 35th wedding anniversary and on his notable and most interesting maiden speech. The noble Lord comes to this House with a wealth of experience in local democracy, in local government and in public service in Yorkshire.
He also brings the particular perspectives which come from his membership of the Society of Friends, a body which makes a contribution to the good health of our society out of all proportion to the size of its membership. We look forward to hearing from the noble Lord again, not least on issues of democracy and accountability, about which he has spoken today.
At the centre of Will Hutton's report are the issues of accountability and ownership. At the local as well as at the national level, how are communities to be enabled to feel a sense of ownership and therefore of responsibility for the services they use? In speaking about one episode in the history of the health service in Birmingham, I must declare an interest; indeed, an interest in more than one sense of the word. I am a non-executive director of the University Hospital Birmingham NHS Trust.
For at least 20 years, health planning in Birmingham was deadlocked. Everyone knew that radical changes were needed, but no one could agree on what ought to be done and all the structures for consultation were dysfunctional. Sectional interests were pitted against one another. In the city there were no fewer than five district health authorities. The regional health authority had lost the confidence of local government. The local press whipped up campaigns to save this or that institution, to which people were understandably, if often short-sightedly, attached. The result was gridlock with decaying buildings, wasted resources, mounting deficits with increasing dangers of clinical risk and all going nowhere.
Change came at last two years ago. The Birmingham Health Authority, after yet again setting out its stall for change in a consultative document, set up an independent commission to take evidence and to make recommendations in response to its proposals. That commission was admirably chaired by the noble Lord, Lord Hunt of Kings Heath, before he held his ministerial responsibilities with the Department of Health. The membership was drawn from the three main political parties, from the various religious and ethnic communities in the city, from academia and from the media.
Under the noble Lord's leadership, the positions of the various interest groups were publicly and vigorously scrutinised, as were the proposals of the

1455
health authority. The outcome was a report which took an independent and comprehensive view of the health needs of the city as a whole. It was a constructive and sanitary change from the usual kind of consultation exercise in which each interest group responds in isolation from all the others. The thing then never adds up.
The commission's report, entitled Simply the Best, was published in the summer of 1998. By using its methods, it succeeded in breaking the log-jam. Furthermore, it helped the community as a whole to take responsibility both for the inherited problems and for finding solutions to which all would be publicly committed. The health authority, the various hospital trusts, the university medical school, the medical profession, the city, the media and the politicians are now working together in a way in which even a few years ago seemed quite impossible.
I have already mentioned the part played by the chairman of that independent commission. However, the other person to mention is the former chairman of the Birmingham Health Authority, Mr Bryan Stoten, who had the political wit to see that the only way to make progress was by way of putting consultation into the hands of a manifestly independent and truly representative commission which was free to form its own judgments and make its own recommendations. I commend that exercise as a model of what can be done if people in charge will sometimes have the courage to let go.
8.7 p.m.
Lord Clement-Jones: My Lords, perhaps I may begin by congratulating the noble Lord, Lord Harris of Haringey, on initiating this debate on New Life for Health and, indeed, on being originally responsible for commissioning the report itself. Tonight he has introduced the subject very lucidly to the House.
It is a great privilege to be taking part in a debate which includes not just one, but two maiden speeches from the Liberal Democrat Benches. That certainly demonstrates our continuing interest in matters that affect not only health, but also democracy, accountability and transparency. I very much look forward to future contributions in this House from my two noble friends.
The polling undertaken for the report clearly demonstrates that the NHS is still immensely important to the British public. Some 63 per cent of those polled considered the NHS to be the UK's most valuable institution, a percentage far ahead of that for the police service, the BBC or indeed the Royal Family. However, 56 per cent of those polled considered the NHS to be remote and hard to influence. Their diagnosis of the body that constitutes the NHS was very eloquently set out by the commission. Over the years there has been a steady erosion of local discretion. There is massive patronage by the Secretary of State. Today we have a highly centralised NHS. After the 1990 reforms, NHS regional executives are only an arm of the centre. The Health Select Committee argued in autumn last year
1456
that the NHS needs to transform an ethos that is too defensive, inward-looking and locked in a blame culture.
Indeed, there is little accountability in the system, and even less transparency. The existing systems for accountability and complaints are too weak. The current accountability watchdogs, such as community health councils, do not have observer rights to all NHS bodies; they are often poorly trained and their members are on occasion de-motivated; and they have no systematic access to legal advice. The former Secretary of State for Health, Mr Dobson, acknowledged that the current NHS complaints procedures were inadequate. He stated:
"The present system is really a bit of a shambles … and at the end of it none of the people concerned is satisfied".
That very much echoes what the noble Lord, Lord Harris, had to say on the matter. The health ombudsman, for instance, can only make recommendations based on individual cases and cannot enforce any course of action. All in all, the commission rightly concludes that there is no framework of accountability within which complaints can be dealt with.
Generally, the conclusion of the commission and its chairman is that the NHS is the,
"least accountable of Britain's major institutions,
and that as a result,
"we fear that there is a trust gap opening up between the public and the NHS".
That is not surprising, since all power is now increasingly held at the centre of the NHS, whether this is over budgets, including the modernisation fund, or the priorities to be followed by the NHS.
Yet by its very nature, despite the growth of external audit bodies, the centre has not been able to avoid cases such as those of Shipman and Rodney Ledward, or the Bristol case. It is clear that the NHS cannot be effectively controlled from the centre.
The report's central proposal is to improve openness and accountability through a constitution for the NHS, creating operational independence and moving away from day-to-day ministerial control. Under the model proposed by the commission, the NHS would become an independent institution and would be charged with carrying out government policies within the resources allocated. The report rightly cites the huge advantage of being able to debate with government in a "process of open negotiation", with wide consultation and informed public debate. It responds to the fact that we now have a much more questioning culture.
It is debatable whether the new body should take the form of an executive agency—such agencies have not hitherto been noticeably independent—or a body such as the BBC or the Bank of England, with its own accountable boards. The second principal recommendation is that health authorities should be made more democratic and that direct elections to them should be held. However, like my noble friend Lord Shutt of Greetland, I query whether that would be the best way of giving local government

1457
responsibility. I believe that a better model would be to give local government responsibility for a combined health and social services remit. Whatever the precise model—and we clearly need to debate these models—more local democracy will be popular. In a poll carried out by the commission, 75 per cent of those questioned were in favour of elected or partially elected local boards.
Precedents for the constitutional reform of major institutions have already been set by this Government. Both the Bank of England and the Competition Commission have been given more constitutional independence. The advantages are clear: greater transparency around resourced allocation, making it easier to determine where the true problems lie. The Government would be forced to make difficult and potentially unpopular policy decisions about the future direction of the NHS without resorting to "behind closed doors" management. By re-establishing trust and increasing the transparency with which new funds are used, the constitution could well serve to legitimise increased taxation as a means to fund the NHS.
Other reforms are suggested by the commission. All need debate, and many are extremely valuable suggestions. As regards regional government, what a missed opportunity the setting up of the GLA was. I entirely agree with the noble Lord, Lord Harris. Regional government on an elected basis should be responsible for strategic development of the health services in the regions. We need also, as suggested by the commission, to consider getting rid of the contracting approach. That would obviously have major consequences for structures.
The one downside is the question of timing. How much more change can the NHS stand in the short term? Could we really get rid of PCGs at this stage, for instance? Above all, as the noble Lord, Lord Harris, underlined, we need to redress the balance of power in the NHS between patients and managers and professionals. The Government are clearly going the wrong way in combining the job of the NHS chief executive with the role of Permanent Secretary at the Department of Health.
It is not all gloom and doom. We very much welcome devolution to Scotland, Wales and Northern Ireland. There is also the requirement that health authority members should be locally resident. I very much hope, therefore, that the Minister will reassure us that the Government will consider the report seriously and not plunge into further centralisation without being absolutely sure that that is right for the NHS. Indeed, I hope that they will now start to take on board some of the principles and policies advocated by this excellent report and include them in their national plan, which is due to be published in July.
8.15 p.m.
Earl Howe: My Lords, following the excellent introduction by the noble Lord, Lord Harris, and after two distinguished maiden speeches, we can say with
1458
more than our usual degree of warmth how grateful we are to the noble Lord for having tabled this Unstarred Question. It is a fascinating and important subject, and one that deserves more time than the cramped confines of the dinner hour to be considered properly. However, whenever I read that a spokesman for the Department of Health has welcomed something or other as a "useful contribution to the debate", I know that an icy blast is likely to follow from the same quarter. It would be surprising if the challenge from Mr Hutton's commission is one that the Government wish to seize with both hands and run with enthusiastically. But I hope at least that the Minister's criticisms, if criticisms he has, will be constructive in character.
This is a report with a great deal of substance. Its starting-point is to seek ways of putting the patient at the heart of the NHS. It sets about this by posing the question of how well the NHS pursues the public interest, not in terms of its clinical outcomes but rather in terms of its responsiveness and accountability to the public. On those counts, the conclusion it reaches is that the NHS falls badly short of the ideal. The governance of the health service is becoming increasingly centralist; and that is watering down and weakening the ability of the patient to obtain redress for a grievance or even to understand the basis for managerial decisions. The system is opaque and seemingly impenetrable. Worse still, it is sometimes obstructive to the interests of natural justice. The central theme of the commission, in other words, is greater empowerment of the patient.
That is a theme that should resonate with all of us. If you were to tell the most experienced graduate of Harvard Business School that his next job was to be the manager of an organisation consisting of 1 million employees, I suspect that he would tell you straight away that it was beyond him. Yet this task is exactly what is currently demanded of the NHS Executive. The difficulty is compounded by the way in which Ministers choose to involve themselves in the minutiae of health service planning. Nye Bevan's prediction of Ministers being answerable for every dropped bedpan is not far from being a reality. The consequence of this centralisation is a weekly avalanche of paper descending on hospital trusts and health authorities in the form of directions, guidance, targets and new requirements.
One hopes that even Ministers are capable of stepping back slightly and acknowledging that somewhere the plot has been lost. That is not to say, any more than does Will Hutton, that the Secretary of State's answerability to Parliament should be done away with or seen as irrelevant. That would be equally absurd. In fact, contrary to Will Hutton, I believe that the Secretary of State should remain answerable to Parliament on the large political issues such as public health policy, standards and quality of care and the budgetary settlement for the health service. But it is

1459
ridiculous to expect government Ministers to micro-manage the NHS. The aim of government should be to devolve decision-making about the allocation of resources to a point as close to patient care as possible and thereby ensure that the data underpinning those decisions are sensitive to local needs.
Of course, there is also a need for strategic co-ordination; and there is a legitimate debate to be had about how that strategic dimension is achieved and about the balance to be struck between local autonomy and direction from above. It is the policy of the Conservative Party to redefine the relationship between politicians and the management of the health service. The risk of imposing too many political priorities on the NHS from Whitehall is that patients are treated as averages rather than individuals. Our view is that clinical priorities, not political interference, should govern the way in which the health service is managed.
The way forward suggested by Will Hutton's commission is that the NHS should become an independent public corporation with its own constitution, fulfilling government policies within its budget, but essentially free from the shackles of the Department of Health. In a week when the Government have announced that the successor to Alan Langlands as NHS Chief Executive is to be the Permanent Secretary of the Department of Health, I cannot imagine that the idea of independence for the NHS has found any favour whatever with Ministers. Indeed, we witness in that decision a still greater politicisation of the NHS than we have been used to, even by the standards of this Government. But the need for greater transparency in the NHS, which Will Hutton rightly identifies, is no less powerful.
The commission's view is that a written constitution for the NHS will solve the accountability deficit at a stroke. I am open-minded about this idea, but I have yet to be convinced by it. It seems to me that a codification of the principles by which the NHS should function may be a useful tool, but it will not of itself deliver the benefits that the commission identifies. I agree with the noble Lord, Lord Harris, that it also appears to remove too much accountability from the Secretary of State.
There is another deeper problem for me, which is that the sort of patient empowerment to which these proposals are meant to lead is a negative kind of empowerment: redress of grievance, more effective processing of complaints, guarantees of rights and so on. Those, in my view, are secondary to the kind of empowerment that really matters for most people, which is the ability to receive the best and most appropriate treatment when they are ill.
The one obvious word missing from the commission's report is "choice". The rigidities introduced into the NHS by the Government's recent reforms have reduced patient choice. This in turn has reduced the incentives for poorly performing hospital trusts to do better. But that is a debate for another occasion. I look forward with more than the usual interest to hearing what the Minister has to say.
8.22 p.m.
Lord Hunt of Kings Heath: My Lords, this has been an extremely interesting debate. I start by thanking my noble friend Lord Harris of Haringey for instituting it. He was a very distinguished leader of the Association of Community Health Councils for England and Wales. I applaud the courage that he and the organisation showed in commissioning Will Hutton and his commission to undertake this import ant work.
I also pay tribute to both our maiden speakers, the noble Baroness, Lady Northover, and the noble Lord, Lord Shutt of Greetland, both of whom made extremely effective maiden speeches, drawing on wide experience in the public service. I very much hope that we shall see them again in future debates on the National Health Service.
The report produced by Mr. Hutton and his colleagues is extremely interesting and stimulating, and indeed a good read. My noble friend Lord Harris tried to anticipate what I would say. Only the leader of a local authority could come out with town hall "bureaucratese" like that. We are far more enlightened in the Department of Health. This will not be kicked into the long grass. It is a very important report. The national plan is due to be published within the next four to six weeks. That cannot be described as being kicked into the long grass. Indeed, we have been criticised by many for the speed with which we shall produce the plan.
We recognise the key importance of many of the issues discussed in the report and debated today by noble Lords. Improving patient and public empowerment within the NHS in its broadest sense is at the very heart of what we are seeking to do with the NHS and the national plan. I assure noble Lords that we shall look very seriously at the issues in the report and in our debate tonight—and not simply in relation to the future role of community health councils. The wider issues of patient involvement and accountability are also being considered.
Tonight's debate goes back to the origins of the National Health Service in 1948. My noble friend Lord Harris and the noble Baroness, Lady Northover, made that point clearly. It was in the post-war Labour Government that Morrison argued for the health service to be run by local authorities. Bevan argued that that would produce a patchy, second-rate service, and Bevan won the argument. In a sense, that tension is still at the heart of our debate. I believe it would also be true to say that for much of its 52 years, at least until May 1997, the NHS found that tension a considerable challenge. Certainly, the Government in 2000, as in 1948, believe passionately in equal opportunity for all. That is why we created, and continue to support, a national NHS, where accountability runs upward to the relevant Secretary of State and thence to Parliament.
I believe that such a central line of accountability provides a clear national focus for the service. As a Minister, I certainly feel accountable to this House for the activities of the NHS. Alongside that, when we look at the impact of the Public Accounts Committee

1461
and the role of the National Audit Office, the Audit Commission and the ombudsman, we see that there are endless mechanisms under which that accountability is discharged.
One of the ironies is that, while the 1948 settlement put hundreds of hospitals and other services under one banner, the NHS has never operated according to clear national standards. I agree with the noble Baroness that variations have dogged the NHS since 1948. They were considerably exacerbated by the introduction of the internal market. There is no doubt that there are many unacceptable variations in NHS performance across the country. A recent interim report that the Government published alongside our work on the NHS national plan shows that average waiting times for elective admissions vary between health authorities from two months to over four months; that day case rates for cataract extractions range from under 40 per cent to over 90 per cent; and that emergency hospital readmission rates vary more than tenfold. One of the most striking facts about the health service is that the care and services one receives still depend too much on where one lives.
We have done much to address that matter. The creation of the Commission for Health Improvement and the establishment of the National Institute for Clinical Excellence are designed to remove the situation that we inherited of the "postcode lottery" of wide variations in services. Clearly, there is much more that we have to do. When it is published in July, the national plan will include a commitment to work with doctors, nurses, therapists and managers, and of course with the public, to develop clear national standards so that patients everywhere receive a first-class, consistent service.
It is very much worth making the point that the NHS transcends many of the traditional local barriers and agencies, because the whole point about the NHS is that we are developing, and wish to develop, a seamless approach to services which cuts across primary, secondary, tertiary and highly specialist care. In that context, national accountability is perfectly appropriate.
Both the noble Lord, Lord Clement-Jones, and the noble Earl, Lord Howe, argued against what they described as over-centralisation. The noble Earl talked about increased centralisation and the noble Lord argued for more local democracy. However, in two years, both as a Minister and a Whip, I have had the pleasure of listening to the many contributions of both the noble Earl and the noble Lord. Local decentralisation has not particularly been a theme of what they have put before the House. How many amendments have they put forward in relation to the powers of health authorities and local authorities where the Bill states "may" and they have wanted "shall"?
Lord Clement-Jones: My Lords, perhaps I may intervene, having been provoked by the Minister. The noble Lord will remember an amendment we put
1462
forward for merging responsibility for health and social services in the Health Bill. That is a commitment to local democracy.
Lord Hunt of Kings Heath: My Lords, as regards the arguments put forward on such Bills, if we were to amend in that way it would so constrain the role of local authorities that they would hardly consider the position democratic. How many times has the noble Lord argued that "guidance" should be statutory guidance? I do not seek to make a political point. I simply seek to show that most of the pressures on Government in relation to the National Health Service are to ensure national consistency and high standards of services. That is what we wish to achieve: national consistency, national standards and a National Health Service. However, within that—I agree with many of the contributions made—we have to allow space at local level for people to innovate and lead change.
While I do not think that we should alter the fundamental principle of central accountability, we understand that as well as modernising the health service we must modernise the decision-making process. We have to open up that decision-making process at national and local level. We have to involve the public in decisions not just about their own care but also about health policy at local level generally. The creation of modernisation action teams as part of the national plan allows us to look specifically at how we can better involve patients and the public.
I agree with my noble friend Lord Harris about the need to avoid paternalism and to listen seriously. The right reverend Prelate the Bishop of Birmingham explained one of the new innovative techniques which can be used in trying to reach consensus at local level about a major change in services. Clearly, we have to do more.
The noble Baroness, Lady Northover, mentioned complaints. We have commissioned an independent evaluation of the complaints procedure. That is now over half way through. It would be premature to begin implementing any changes in advance of the final report of the evaluation team, which we shall consider carefully.
The question of openness was raised. We are committed to openness in the National Health Service. That is why one of the first actions of the Government was an instruction to trust boards to ensure that their meetings were in public. I applaud the activities of CHCs, which have also encouraged a greater degree of openness in the dialogue between themselves and the NHS.
My noble friend Lady Massey raised important points in relation to inequalities in health issues. I believe that Our Healthier Nation, the health improvement programmes, health action zones and the new flexibilities in terms of partnerships between the health service and local government will allow us to address many of these troubling issues.
A study by Ziggi Alexander identified the issue of statistics in relation to the Department of Health. It is a matter we are considering carefully.

1463
The appointment of an NHS chief executive is to ensure that at the centre we have a co-ordinated approach to the way in which we discharge our accountability and manage the National Health Service. Far from creating the centralist impetus that noble Lords fear, it will enable us to get the right leadership at national level which then allows more space for people at the local level to lead change and innovation.
The clock is against me. In relation to community health councils I recognise the extremely important role they have played over 25 years. But there is a widely held belief, not least among the CHCs themselves, that they need to change to bring them up to date with the new, modern NHS. The patient empowerment modernisation action team which is working in relation to the national plan will consider patient empowerment, public involvement and the future role that CHCs might play.
In conclusion, I believe that Will Hutton's report is extremely interesting and stimulating. I can assure the House that it will not be kicked into the long grass. It will he part of the important discussions we are having in relation to empowering the patient and the public. At the end of the day, the Government need to ensure true, equal access to consistent services. I and the Government will continue to argue for the principle of equality and the pursuit of national standards just as passionately as Nye Bevan himself did in 1948.

Regulation of Investigatory Powers Bill
8.35 p.m.
House again in Committee on Clause 2.
[Amendments Nos. 23 and 24 not moved.]
On Question, Whether Clause 2 shall stand part of the Bill?
Lord Cope of Berkeley: I indicated that I wished to speak to this Motion, and to Amendments Nos. 212, 214 and 218. The effect of the three amendments, taken with the proposal that Clause 2 shall not stand part, would be to move all the subsections in Clause 2 into Clause 72.
Noble Lords who were present at Second Reading, or have read the debate in Hansard will know that it was marked by a most interesting and unusual speech by the noble and learned Lord, Lord Brightman. From his great legal background, he criticised the fact that there are two general definition clauses: Clauses 2 and 72. He said, rightly, that in most Bills there is a general definitional clause at the end of the Bill, and that other phrases and words are defined in the clauses in the parts of the Bill to which they relate so that they can be seen in the context of the Bill. However, the general definitions are given usually in a definitional clause at the end for the convenience of those who use Acts of Parliament.
I agree with that. It was a powerful speech. It moved the Minister to express sympathy with what the noble and learned Lord said. He undertook to consider the
1464
matter. Since then there has been an exchange of correspondence of which I have seen part; I may not have seen all of it. The Minister did his best to justify the inclusion of these definitions in Clause 2 on the grounds that they were important to the understanding of Clause 1 and the basic approach to the Bill; that they were fundamental and of great importance. I accept that some of the definitions in Clause 2 could be regarded in that category although others seem somewhat basic. As we discussed earlier, the definition of "postal service" means the transmission of postal items.
I see very little reason why the large part of the definitions in Clause 2 should not be more conveniently put into Clause 72. I will not go into the detail that the noble and learned Lord did at Second Reading, except to draw attention to the fact that quite a lot of the words and phrases are again redefined in Clause 72 as having the meanings given to them by Clause 2. That is perhaps a useful indexing, but it also demonstrates a certain duplication of effort.
In the years when I was a Minister in another place, and since I have been here, I have many times admired the work of parliamentary counsel, and I entirely agree with the comment made by the noble Lord, Lord Phillips, who said what a huge challenge it must have been for parliamentary counsel to face a Bill of this character, with such a complex technical background, such as the Internet, and reduce it to workable legal prose. But at the same time I have also had occasion over many years to become frustrated with the complexities of the legal drafting that we see in these Bills. It sometimes seems to me to be totally unnecessary.
We had a brief exchange earlier on, which I did not press, because I did not want to take up the time of the Committee, over the definition of "communications data". It is defined in Clause 20 as:
"In this chapter 'communications data' means any of the following—"
I suggested that it might be preferable to say, "In this part". In Chapter I "related communications data" is defined as:
"so much of any communications data (within the meaning of Chapter II of this Part)"—
so one finds oneself going backwards and forwards from one part and one chapter to another in order to find the definitions that one needs.
My noble friend Lord Renton many years ago wrote an excellent report on the drafting of Bills which made a whole series of recommendations, very few of which have been consistently followed since then. One of them was about where to find definitions and how it was easier to have definitions in a place where they could be found. I do not believe that it matters very much whether that place is habitually at the beginning of Bills or habitually at the end of Bills. It would not matter. If the habit was to have them at the beginning of Bills, that would be fine. We could define all the words and then say what the Bill means.

1465
Our habit has been—and it is an alternative approach to the system—to have all the definitions at the end of the Bill and to approach it in that way. That has been our habit, and it is one to which we should broadly stick. It is inevitable in a Bill of this complexity that some definitions and some important items shall be incorporated in the body of the Bill in order to be able to follow it and explain it. However, if parliamentary counsel with much more experience of the drafting of Bills could go through these Bills and look at the definitions, they could be improved no end.
To give another example which came up earlier, why is "postal service" defined by reference to "postal items" in Clause 2(1) of the Bill and "postal item" is not defined until Clause 2(10)? It means that one has to look for it and almost read the whole of the Bill in order to locate the bits which define other matters. They are not in a neat place, where one can put one's finger on them without difficulty.
I accept all the difficulties that are involved in the drafting of a Bill like this. However, I also believe that if the parliamentary counsel paid more attention to the users of Bills and trying to get a uniform system of placing the definitions, in this case, in a convenient place, it would be to the benefit of us all.
Before I sit down, I have to confess to your Lordships that when I was a Minister handling Bills in Parliament, I found myself on a number of occasions in a situation of arguing with parliamentary counsel in an effort to make the wording a little more straight forward. There were a number of occasions on which I had some discussion on the matter with the relevant lawyers—usually the departmental solicitor, because it is quite difficult to get through to the parliamentary counsel themselves—and I almost invariably lost. It may be that the Minister has lost on this occasion. Nevertheless, the noble and learned Lord, Lord Brightman, had a very good point.
8.45 p.m.
Lord McNally: The noble Lord, Lord Cope, has obviously come back from dinner in a mellow mood. He has had a few kind words to say about parliamentary counsel; he is sympathetic to the problems of the Minister; he has made a few confessions from his own days as a Minister. I suspect that it all bodes well for the next four or five hours. I had hoped that he would have come back in a slightly more robust mood, which would perhaps indicate that we were not going to send this clause back because of the issues raised by the noble and learned Lord, Lord Brightman. Although they are valid reasons, I believe that the definitions could be put together in a clearer way.
What this definitions clause has revealed is the true nature of this Bill. The real problem—and I suspect that it will recur for the Minister—is that this is a pantomime horse of a Bill. The front end is consolidation, as he has referred to it a number of times, and that is why we get constant references to telecommunications and postal systems which all hark
1466
back to legislation that is 15, 20, 30, 40 or 50 years old. At the back end of the horse is an attempt to deal with new technology. I suspect that one of the problems that we will continually encounter is the fact that the definitions, the scopes, the powers are either carryovers from old technology or attempts to address the new ones. I must say that, even at this early stage, the joining is beginning to show. It might have been better for this clause to be taken back so that the definitions which are already shown to be inadequate could be better defined.
The approach, which is not technology neutral but technology inadequate, could be better shaped up, so that we would get a better sense of what was termed before the dinner hour as "future proofing". It is a concern of many of those who have advised us that we are agonising over powers and the contents of this Bill which may not last more than a few months in terms of the development of the technologies of the industries that we are trying to control.
I would therefore have been keen to look at these definitions and this whole section as covered by Clause 2 with a much greater view to the future, to make sure that, even as we speak, technology is not bypassing the legislation, and to ensure that, in allowing it to bypass us, we are not at the same time adding cost to industry and putting our faith in obsolete ways of trying to deal with these problems. Law enforcement perhaps has to come to terms with a new regime of transmitting information which is not susceptible to the old interventionist ways of controlling it, and I believe that future proofing may need a different approach.
In case that provokes the noble Lord, Lord Cope, to call a Division at this stage, I must say that I believe that we should do better to keep our powder dry for a time in the future when we may look at the clause again to see whether it is worthy of staying in the Bill.
Lord Lucas: These are old technology and obsolete practices indeed! We should be looking at a Bill written in hypertext, as it would be and should be on the Web—it is not—so that one can click straight to the definition. No one will then care one fig where the definitions are; they could be peppered in every other clause but the whole thing would have the same meaning.
The Government have promised to be entirely Web-based by 2005, but their progress so far has been distinctly unimpressive, particularly as regards this House. I hope that the Government can assure us that we are looking at publishing Bills on the Web in hypertext—and the Home Office should be at the forefront of that—so that definitions can be found exactly where they should be, which is next to the word that is defined.
Viscount Goschen: Perhaps I may ask the Minister a general question in respect of Clause 2, but it could probably be asked about every other clause. In terms of the definitions, the specific offences, exemptions and so forth, can he give the Committee a further explanation of the efforts that have been made to try to develop a multi-national approach to such

1467
legislation? A number of Members who have spoken tonight have remarked on the importance of not going off on our own in an industry which must be the most multi-national.
I believe that in order to make the legislation credible we must have an integrated approach with colleagues in other governments. The party opposite has been keen on integrated government, on an integrated transport policy and on integrating everything under the sun. I should be grateful if the Minister could explain how his approach to this legislation will fit in with our colleagues in the EU, the US and beyond.
Lord Bassam of Brighton: I shall begin by commenting on the remarks made by the noble Viscount, Lord Goschen. I am loathed to enter into a lengthy discourse on the Question that Clause 2 shall stand part of the Bill, but I believe that the noble Viscount has made a good point. Perhaps we should try to contextualise the discussion around this legislation. We have been working closely with our European partners and are looking at ways in which we can do so with the Cyber Crime Convention, the Telecommunication Data Protection Directive and the Mutual Legal Assistance Convention.
Perhaps I am not as familiar as I should be with all of those, but, together with our commitments in this legislation and on e-commerce generally, they give an indication of our concern to ensure that we get right the legislation and the quality of regulation and provide the right kind of framework for business and enterprise. Therefore, it is proportionate and part of the debate around this legislation. I take the noble Viscount's point. I am not sure that I want to enter into a debate, but perhaps the House should have such a debate because I am sure that it would be useful and wide-ranging.
Tonight, it is my intention to recommend that Clause 2 shall stand part of the Bill and to set out some of the background relating to it. In doing so, I shall attempt to address the points made in this short debate. The clause sets out the definitions of telecommunications and postal services and systems relevant to the Bill. The purpose of the clause is to interpret the meaning of "interception" and related items.
The Interception of Communications Act 1985 contained no definition of "interception", an omission which the Bill rightly seeks to rectify. These definitions seek to reflect both current and future technology. These are not easy matters to set down in legislation, but this set of interlocking definitions certainly takes us forward from the position which we inherited with the 1985 Act.
Part I of the Bill introduces some difficult and complex concepts relating to interception and telecommunications. These are fundamental to the subject matter of Chapter I of Part I. As these are matters of great importance, they appear at the beginning of the Bill in Clause 2. This clause has been positioned with the substance of the matters to which they relate.
1468
It is quite usual to define the basic concepts for a legislative proposition in the main part of a Bill and in this instance the Bill has a signal point of reference at Clause 72 for expressions that are defined for all the provisions of the Bill. Therefore, we have two clauses for that purpose. Clause 2 relates particularly to the important issues which are dealt with in Chapter I of Part I and Clause 72 has a definition which relates to the generality of the Bill. That is why we have two definitional clauses.
I know that that creates complexities, but it means that in Clause 72 we have an index to the expressions to be found in Clause 2. This Bill, and Part I in particular, contains a great deal of complex and interlocking concepts and definitions are contained in Clause 2 to assist the reader who wishes to demystify, to understand more precisely, Clause 1. That is why we have the juxtapositioning of those two clauses. That is the main reason for the way in which the Bill is set out.
Perhaps I may take an example raised by the noble and learned Lord, Lord Brightman, on Second Reading. The word "modification" receives two treatments, in Clause 2 and in Clause 72. However, subsection (6) of Clause 2 simply amplifies the phrase as it is used in a very specialist sense in subsection (2). It does not contradict or undermine the definition which is found in Clause 72.
I have tried to answer the valid points raised by the noble and learned Lord, Lord Brightman, on Second Reading. There are good reasons for the definitions included in Clause 2. While I retain some sympathy for his point, I believe that on balance it is more helpful to see the definitions there than to see all of them at the end. I think it makes for a better understanding and demystification of Clause 1. The reader of the Bill will find that Clause 2 definitions are carefully cross-referenced in Clause 72.
Today I received further correspondence from the noble and learned Lord, Lord Brightman. I am extremely grateful to him for writing because he does so from his hospital bed. He has suggested some small changes which I am happy to take away and consider. In the mean time and with that explanation, which I think is clear, I commend Clause 2 to the Committee.
9 p.m.
Lord Cope of Berkeley: I am, as it were, formally grateful and, in part, genuinely grateful to the Minister for what he said, although I am not entirely convinced. So far as concerns the points raised by the noble and learned Lord, Lord Brightman, obviously we shall have to wait to see how the later stages of the Bill turn out.
However, the noble Lord, Lord McNally, believes that Clause 2 contained wider issues, and I agree with him. He referred to the Bill as being rather a "pantomime horse" because it adds technological aspects to the traditional controls over interception. Of course, the problem with that is that it makes the Bill extremely difficult to amend. It seems to me and to many commentators outside, as we have already discussed, that the provision deals only with the

1469
difficulties of the over-exaggeration of some of the technological clauses littered throughout the Bill. Whether the difficulty in amending the Bill is deliberate or accidental, I am not quite sure. However, it is the fact of the matter and it leads some people to say that the Bill should be taken away and reconsidered.
My noble friend Lord Goschen raised an important point with regard to the international dimension. That produced the interesting comment from the Minister that the Government are working closely with European partners. In the circumstances, that seemed to me to be a rather provocative remark. Our nearest EU neighbour, Ireland, is in the middle of proposing a Bill which, in some respects, is flatly the opposite of this legislation and provides protection for some issues which we are attempting to open up. However, that will be considered at a later stage.
A general criticism of the Bill was made by the Government's own adviser, Professor Turner, who is also connected with the Institute of Directors. He said that the Bill was an attempt to deal nationally with a problem which should be dealt with internationally. I have a great deal of sympathy with that approach, and it was reflected in what was said by my noble friend Lord Goschen.
We, and our Government, are not alone in wanting to catch criminals. However, for the moment among similar countries we are almost alone in trying to advance this particular set of propositions regarding how one deals with the Internet in this respect. But at this juncture I shall not press the Committee to oppose Clause 2.
Clause 2 agreed to.
Clause 3 [Lawful interception without an interception warrant]:
Lord Lucasmoved Amendment No. 25:
Page 5, line 33, after ("place") insert ("only").
The noble Lord said: This amendment requires only the approval of the Minister. I beg to move.
Lord Bassam of Brighton: Amendment No. 25 seeks to ensure that under this subsection postal and telecommunications service providers are not at liberty to carry out interception for purposes other than those connected with the issues described in paragraph (b). The few words in question here are copied directly from Section 1(3)(a) of the Interception of Communications Act 1985, a provision which we believe, as I consider noble Lords opposite believe, has worked really rather well over the years and is well understood by the industry.
A provider may intercept a communication if it takes place for purposes connected with the issues listed. The question arises as to what effect the Bill might have where a provider intercepts for a number of purposes, some within the scope of subsection (3) and others not. Do the legitimate purposes provide an excuse for others? That is certainly not how the equivalent provision in the current interception Act
1470
has ever been understood; nor, for that matter, do we believe that that view would carry weight in court. If someone carries out interception for purposes other than those listed, this subsection does not authorise that conduct.
That is our understanding of the amendment. I believe that I have described fairly its effect. We are relying on something that has worked well in the past, and I trust that with that explanation the noble Lord, Lord Lucas, will feel more than able to withdraw his amendment.
Lord Lucas: I am grateful for that explanation and am content to beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Lucasmoved Amendment No. 26:
Page 6, line 3, leave out from ("enactment") to ("that") in line 4.
The noble Lord said: This amendment removes some words and seems to me to leave the clause saying exactly what it said before. Therefore, the words should be removed. I beg to move.
Lord Bassam of Brighton: I believe that the noble Lord has moved an amendment which is helpful, although I may be wrong. It seems that Amendment No. 26 seeks to tidy the wording of Clause 3(5)(c). However, the wording as it stands maintains a distinction between enactments contained in the Wireless Telegraphy Act 1949 and any other enactment. First, all the enactments contained in the Wireless Telegraphy Act are to be deemed relevant. Secondly, only those enactments which relate to wireless telegraphy are relevant. The wording as it stands preserves that distinction.
We believe that it is important that all enactments in the Wireless Telegraphy Act are included in this subsection and not simply those which relate to interference. From time to time, the Radio Communications Agency is required to carry out interception in the course of investigating unlicensed use of wireless telegraphy apparatus (that is rather old language; nevertheless, I am sure that it will serve), including use outside the terms and conditions of a licence. That is an offence under Section 1(1) of that Act and its detection and prevention would not fall within the terms of Clause 3(5)(a) of the Bill. Furthermore, Section 5(a) of that Act prohibits the use of radio equipment to send messages, such as a hoax 999 call. We do not believe that the Radio Communications Agency should be left without the legal capability to prevent that kind of activity.
I am sure that the noble Lord will understand the points that I have made and I trust that he will feel able to withdraw his amendment.
Lord Lucas: Now that I understand, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 3 agreed to.
Clause 4 [Power to provide for lawful interception]:
Lord McNallymoved Amendment No. 27:
Page 6, line 26, at end insert—
("( ) The conditions to be prescribed by paragraph (1)(d) above shall require the Secretary of State to be satisfied that the rights in that country or territory provided by the domestic law of that country or territory for a person who has had his communication intercepted shall he no less than those set out in the European Convention of Human Rights and Fundamental Freedoms.").
The noble Lord said: As we said earlier, this Bill is international in its consequences. It may affect legislation in areas where individual human rights are not so well respected as in the United Kingdom. Amendment No. 27 is simply a probing amendment to find out how the Government view such areas. It ensures that safeguards for individual privacy rights in other jurisdictions are taken into account when activating the powers in the Bill. I beg to move.
Viscount Astor: I was rather intrigued by this amendment from the noble Lord, Lord McNally, because, as I understood from reading it, it seemed to be stating that, whatever we do in this country, we should not break the law in another country if to do so would be in contravention of the European Convention on Human Rights and Fundamental Freedoms. I am not quite sure if that is what the amendment said. The noble Lord, Lord Phillips, is shaking his head so perhaps that is not what it says. The amendment perhaps raises a more general issue. We have talked about the international effects of this Bill. Do the Government believe that the effect of this clause will mean that we shall end up breaking the law in other countries—for example, other European countries—or not? I believe that, if we are to have an international solution to what is after all a world-wide problem, we should take care on this matter.
I may have got the thrust of the noble Lord's amendment slightly wrong, but in any event I should like the Minister to explain his view is on a slightly wider point. I refer to how this provision fits in with our EU obligations.
Lord McNally: Perhaps I may clarify this point. It is not to give licence to break the law but, where we may be co-operating with jurisdictions that do not respect law and human rights in the way that we do, the Secretary of State must satisfy himself that he is not meeting requests from jurisdictions and regimes that do not respect the convention.
Lord Bach: On behalf of the Government, I wonder whether the noble Viscount, Lord Astor, is going to speak to Amendment No. 40 which is grouped with Amendment No. 27 which stands in the name of the noble Lord, Lord McNally. I do not want to encourage the noble Viscount if he is not planning to do so.
Viscount Astor: If it will help the noble Lord, I shall speak to it. Looking at the groupings, I realise it is connected but perhaps only vaguely connected.
1472
Amendment No. 4 is a probing amendment. Page 9, line 5, paragraph (j) refers to the interception of warrants and then goes on to state a person who,
"for the purposes of … an international mutual assistance agreement by the competent authorities of a country or territory outside the United Kingdom".
It may be helpful to the Committee if the Minister would say what type of person is referred to and in which countries. What is an "international mutual assistance agreement"? Is it an Act of Parliament agreement with other countries? Is it an EU convention? Are there any other conventions or Acts that the phrase encompasses? The amendment has been tabled to raise a general question relating to how this provision fits in with our international obligations. I should be grateful if the Minister would throw some light on the Government's thinking as regards Clause 6.
Lord Bach: The United Kingdom has recently signed up to a mutual legal assistance convention on criminal matters. One of its provisions will allow one member state to ask another to intercept someone's communications. This may be because that person, while committing a crime in the member state, is actually communicating from the requested state; or because the requested state is the best place to intercept the communications.
Amendment No. 27 raises the concern that the United Kingdom could be asked to intercept communications on behalf of a country with a poor human rights record. Obviously, everyone will appreciate the motives behind the amendment. No one could disagree with them.
The Minister of State in another place said that the amendment would represent an unnecessary addition to the statute book and went on to explain the reasons further in a letter to Committee Members and offered to consider a government amendment to ensure that the regulations referred to in paragraph (d) are a precondition for bringing Clause 4(1) in to force. That amendment was then introduced on Report and can be found in the Bill before us at Clause 4(1)(d).
Since that provision cannot come into force until the regulations have been made and since Section 6 of the Human Rights Act makes it unlawful for the Secretary of State to act in a way which is incompatible with the convention right, the regulations will have to be ECHR compliant.
In the letter to which I referred, the Minister of State gave the following assurances. First, in the first instance, we shall apply Clause 4(1) only to member states of the European Union for the purpose of implementing Article 17 of the EU Convention on Mutual Assistance in Criminal Matters. Secondly, we shall bring Clause 4(1) into force only in parallel with regulations which limit its effect to member states of the European Union.
Thirdly, in the event that the Government may wish to extend the regulations under Clause 4(1) in the future to cover non-EU countries, I can give an assurance to the Committee that we shall look very

1473
closely at their interception regimes to ensure that those regimes are consistent with ECHR principles before introducing any regulations.
I hope that that may go some way towards persuading the noble Lord, Lord McNally, that we are as concerned as he is about those matters and we have already taken some steps to make sure that the provisions cannot be abused.
Amendment No. 40, spoken to by the noble Viscount, Lord Astor, would remove the ability of a competent authority to make an application for an interception warrant under an international mutual assistance agreement. But our country has now signed up to the Mutual Legal Assistance Convention and I shall say a few words about that in a moment. So there must be a mechanism by which interception warrants are sought.
Routing the application through one of the persons already included on the list—Clause 6(2)—would not add any value to the process since the offence would not be occurring in the United Kingdom and it would make the process unnecessarily bureaucratic.
The draft convention on mutual assistance and criminal matters is currently being negotiated. The draft convention is intended to improve co-operation against serious and organised crime by improving the procedures for mutual legal assistance.
The convention provides that, in general, assistance should be given in accordance with the procedural requirements of the requesting member state, whereas the current presumption is that the law of the requested member state shall prevail. The convention will also provide a basis for co-operation in the use of modern methods of investigation; for example, controlled deliveries and use of modern technology—hearing by live video link and interception of telecommunications.
The mutual legal assistance regime operates in the following way. The convention makes clear that the requesting member state must always satisfy its domestic law before making a request. In practice, that means that requests from the UK would be based on a warrant issued by the Secretary of State in accordance with the same criteria which apply to applications from UK law enforcement agencies for serious crime warrants.
When requests are made under the convention, the target of the interception will be protected by the domestic laws of both the member state making the request and the member state in which the target is present. That is the double-lock system, as it is called, of safeguards endorsed by the European Communities Select Committee in its report on the draft convention in 1998.
9.15 p.m.
Lord Phillips of Sudbury: By the sound of it, that double-lock system is based on the theory of law in each country. Does it have any regard to the practical implementation of laws in both countries? In particular, I am thinking of a state whose legal
1474
protections may nominally be as good as ours but which, as a matter of fact, has a corrupted system which has been penetrated by criminal elements.
Viscount Astor: The Minister referred to the mutual legal convention and regimes in member states. Is he referring only to the EU or outside?
The Earl of Northesk: I am not sure that I have the correct place in the Bill, but I note that the Bill applies itself to the British Islands. Part of the explanation from the Minister thus far on the amendment is that the UK is obliged in this area because it has signed up to a mutual assistance agreement. As I understand the matter, the Isle of Man is not actually a signatory to the EU treaties, so can the Minister confirm that both the Isle of Man and the Channel Islands have been appropriately consulted about the content of the Bill? That is to say, is the constitutional position sound and secure? In asking this question, I should perhaps declare my interest as possessing a number of interests on the Isle of Man.
Lord Bach: There were a number of interventions then. All of them were equally helpful, if not all equally easy to answer. Regarding the double-lock point, as I understand it, the target of the interception, the alleged wrong-doer, will be protected by the practical domestic laws of both the member state—be it the United Kingdom making a request— and the member state in which the target is present. If one of those systems of law—and of course it is not the one in the United Kingdom, and, I venture to suggest, it is unlikely to be the one in the EU—was corrupted in the sense the noble Lord refers to, the double-lock would come into play and the rights of the target would be protected by our law. I do not know if that answers the question the noble Lord posed.
Lord Phillips of Sudbury: I hesitate to interrupt again. However, I am grateful for the invitation to do so. I was trying to get beneath the skin of the law as to how it was implemented in practice. How, for example, if the foreign country was making a request here for an intercept, would we have regard to the practical expression of that requesting country's laws, which might, as I say, be far less than we would wish in terms of compliance with their own legal system, let alone ours?
Lord Bach: I am sure we would have regard to it. I think that this issue may come up later on in our discussions and perhaps I may return to it then. The answer regarding the convention is that it is an EU convention. So far as the Isle of Man and the Channel Islands are concerned, the Bill does not extend to them, although they have been consulted regarding its contents.
Perhaps I may finish off what I was saying about the draft convention. The convention itself will only actually enter into force when eight member states have ratified it. That may take another two or three years. We have signed up to the draft convention.

1475
The Parliamentary scrutiny committees have been sent all formal texts of the draft convention and have recently cleared the latest text of the interception provisions from scrutiny. I have given quite a long answer to the noble Viscount, Lord Astor, because he wanted, quite rightly, to know more about the draft convention that we are signed up to.
Viscount Astor: I am extremely grateful for the explanation of the Minister. It poses a number of questions. The first point is that he said this is purely an EU matter and it is dependent upon eight countries signing up. If anyone reads Clause 6(j) it is not clear that this is just an EU matter. It merely talks about "any international mutual assistance agreement". I find that misleading, which of course was the reason why I asked the question. Perhaps the Minister, between now and Report stage, may like to consider whether there might be some wording which might make it more explicit that this is not something that relates to the EU but something wider. It then begs the question whether under the existing legislation the Government can add other countries that are not in the EU. For example, one would think that the USA is a natural home for some form of international agreement, because after all the USA is at the leading edge, the cutting edge, of technology, and whatever is invented in this form of technology is usually invented there.
Therefore it would be very helpful if the Minister could say whether, if the United States is not included under the present wording, there is any intention to carry out any form of negotiation with the USA on this, so that there could be some sort of mutual assistance agreement, to use the Minister's words?
It seems to me it would be very helpful if the Minister could put it in the context of "we have heard how this relates to the EU, but how is it going to relate to other non-EU countries? Can they be covered by the wording in Clause 6(j) as it is now worded?" Is it, on the other hand, merely intended to refer to EU countries? If so, perhaps we could improve on the drafting. If it is intended that this could be expanded to non-EU countries, it would be very helpful if the Government could say how they would propose to deal with it. After all, the United States of America is just one example. I think it would be enormously helpful to the Committee if the Minister were able to give some answers to those questions.
Viscount Goschen: Before the noble Lord, Lord McNally, or the noble Lord, Lord Phillips, tell the Committee how they intend to proceed with their amendments, I should like to ask the Minister one very straightforward question for elucidation. I am sure there is an equally straightforward answer, probably involving precedents or other legislation. Referring to Amendment No. 40, in Clause 6(2) there is a list of people who are permitted to provide the application. Could I just ask why the Commissioner of Police of the Metropolis, the Chief Constable of the Royal Ulster Constabulary or the chief constable of any police force maintained under or by virtue of Section 1 of the Police
1476
(Scotland) Act 1967 are shown there, but not other chief constables within the United Kingdom? It would be helpful to know the answer.
Lord Lucas: Might I ask the reverse question? What is the position going the other way? What rights have we, as a country, to extract this kind of information from other countries? As I understand it, we have a reciprocal arrangement with the European Union and in that case is it always on this Part I warrant-to-warrant basis, or could we find people who are after communications data under Chapter II, having a right to communications data that, say, I may have generated while on holiday in France? Is that something they could ask for and, if so, would they get it on a similar basis as applies in the United Kingdom or would they have to apply for a French ministerial warrant to get it?
The Earl of Northesk: I hope the noble Lord the Minister will permit me to come back on die Isle of Man and Channel Islands point. Clause 5(5) states categorically that,
"A warrant shall not be considered necessary on the ground falling within subsection (3)(c) unless the information which it is thought necessary to obtain is information relating to the acts or intentions of persons outside the British islands".
I am happy with that drafting, but my understanding is that the Interpretation Act defines the British Islands as Crown dependencies. To a very major extent the Bill does impact upon the Crown dependencies, i.e. the Isle of Man and the Channel Islands.
Lord Bach: Before the noble Lord, Lord McNally, speaks, perhaps I could deal with several issues that have arisen. The noble Viscount, Lord Astor, asked about the European context. The Bill says,
"for the purpose of any international mutual assistance agreement".
So it obviously does not include just the convention that we have signed up to. Your Lordships will remember my earlier reply that in the event of the Government wishing to extend the regulations under this clause in future to cover non-EU countries, we would look very carefully at their interception regimes to ensure that they are consistent with ECHR principles, before introducing any regulations.
In answer to the noble Viscount, Lord Goschen, the chief constables of other forces in England and Wales are not mentioned because all England and Wales interceptions, apart from those of the Metropolitan Police, are through the National Criminal Intelligence Service—a national body covered by the clause. Special Branch is covered through the Metropolitan Police and the Scottish police through the Scottish Office.
9.30 p.m.
Lord Cope of Berkeley: I apologise for interrupting the noble Lord, but it is not the Scottish Office that

1477
covers Scottish police but the chief constables of Scottish constabularies, who differ from the chief constables of England and Wales.
Lord Bach: I will return to the noble Lord's point.
As to the concern expressed by the noble Earl, Lord Northesk, the Bill does impact on the Crown dependencies, in the sense that it gives them special protection and treats them like the UK in that respect—but it does not apply as a matter of Manx law. That is the best I can do for the noble Earl tonight.
I referred earlier to the Scottish Office but the reference should have been to Scottish Ministers in the devolved government. No doubt it is through Scottish Ministers that the matter reaches the chief constables to which the clause refers—not the Scottish Office in London but Scottish Ministers in Edinburgh.
Lord Cope of Berkeley: I apologise for interrupting the noble Lord again but Clause 5 states that the Secretary of State may issue a warrant. That might be the Secretary of State, Home Department or the Secretary of State for Scotland but the Secretary of State may issue warrants—not Scottish Ministers.
Lord Bach: It is not a question of who issues the warrant but who should apply for one.
Lord Cope of Berkeley: Yes. As far as concerns an application, that may be done in Scotland by the chief constable of any police force. An application cannot be made by the chief constables of an English or Welsh police force. They can only apply through NCIS. That is not quite what the noble Lord said.
Viscount Astor: To give the noble Lord the opportunity to receive further advice, I thank him for his helpful explanation about Clause 6(2)(j). He clearly said that it includes the European Union and any international mutual assistance agreement—and could be added to by regulation. I will not press the point now but it would be helpful to the Committee if the noble Lord would send me a written explanation of the regulations required to add new countries and how that mechanism will work.
Lord Bach: I have not quite finished my response because I have to tell the noble Lord, Lord Lucas, that I shall be writing to him in answer to his question.
Perhaps I may return—it is to be hoped, for the last time of asking—to the Scottish police; not the Leith police, but the Scottish police. The Scottish police forces apply to the Scottish Ministers by way of a devolution order made under the Scotland Act. The Secretary of State's powers go to Scottish Ministers. Therefore, the noble Lord, Lord Cope, is right: it is the
1478
Scottish police chiefs who make the application, but the decision is reached by Scottish Ministers in Edinburgh.
Lord Archer of Sandwell: Can my noble friend confirm that the reason for this is that there is no National Criminal Intelligence Service in Scotland?
Lord McNally: I wanted to intervene earlier in the debate because I wished to withdraw my amendment. I did not wish to do so for the spurious reason that I intended to bring it back later. It may be just the Minister's presentational skills, but what he said about the area that is at the centre of my amendment sounded to me to be rather reassuring.
We have heard much about the horrors of the Internet, but we should all welcome the fact that this will make it much more difficult for totalitarian states to keep their people in ignorance. It will also make it much more difficult for those concerned to run totalitarian regimes. But, alas, not all totalitarian regimes are unfriendly states. Therefore, the intention of my amendment was to ensure that we did not get into the habit of helping out friendly but, nevertheless, unacceptable regimes (in human rights terms) in controlling their legitimate dissidents.
I heard the Minister spell out the assurances made in the other place and the comments that he made tonight. That seems to me to be the Government's intention. I shall, of course, read the Hansard report carefully, but if what the Minister said was such a tightening assurance, I very gladly beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Deputy Chairman of Committees (Lord Dean of Harptree): I should point out to the Committee that if Amendment No. 28 is agreed to, I cannot call Amendments Nos. 29 or 30.
Lord Cope of Berkeleymoved Amendment No. 28:
Page 6, line 27, leave out subsections (2) and (3).
The noble Lord said: It has been suggested that we should discuss Amendments Nos. 29, 30 and 31 with this amendment. Perhaps I may deal, first, with Amendment No. 31, which is extremely small. Again, this is another amateur effort of mine at parliamentary drafting. However, if Members of the Committee will refer to line 15 on page 7 of the Bill, they will see that it says that prison,
"has the meaning given by subsection (8) of this section".
It promptly goes on in the next line to establish what prison means. It seems to me that line 15 is entirely unnecessary; indeed, it just clutters up the page. This is a small point but one which I thought was worth mentioning.
By comparison, Amendments Nos. 28 and 29 deal with a much more important point of principle. The former seeks to leave out subsections (2) and (3) of Clause 4 which provide for the Secretary of State to make regulations authorising legitimate business practice as far as concerns interception, and so on.

1479
It is extremely important that businesses should be able to do a certain amount of interception during the course of their normal and perfectly respectable business, as is suggested in paragraphs (a) and (b).
However, I am much less happy about the fact that this should be achieved by way of regulations, subject only to the negative procedure, which will be produced at some future date. I hope that the undertaking given by the Minister earlier—namely, to produce information on the codes of practice before the Report stage—might apply also to these regulations.
As I said, this Bill is quite damaging to business. These regulations are potentially extremely restrictive in terms of carrying on normal business. However, I feel sure that eventually the Secretary of State will provide some satisfactory regulations—at least, I hope that he will. We in this Chamber, and Parliament generally, will not have the opportunity to do much about that if they take the form only of negative resolutions. We can, of course, debate them, but we cannot amend them or do much to them. In practice, it is extremely difficult to tinker with any regulations which may be produced on that basis.
Amendment No. 28, which seeks to delete subsections (2) and (3) of Clause 4, is an attempt to persuade the Government to tell us what the regulations will contain and to produce them before we reach Report stage.
Amendment No. 29 seeks to delete "may" and insert "shall" to place a duty on the Secretary of State to produce regulations of the character we are describing. If he does not do so, businesses will not be able to indulge in the perfectly acceptable practice of keeping a record of transactions that employees and others are undertaking on their behalf and of other communications relating to their business. This is frequently done and is a perfectly legitimate and correct practice essential to business. The idea that the Secretary of State may, or may not, introduce regulations is quite wrong. He should introduce such regulations and, what is more, he should produce them before Report stage so that we can consider them. I shall not discuss Amendment No. 30 which stands in the names of Liberal Democrat Peers. I beg to move.
Lord Phillips of Sudbury: It may be appropriate for me to say now that Amendment No. 30, which stands in the names of the noble Lord, Lord McNally, the noble Baroness, Lady Harris, and myself, should be withdrawn. We wholly approve of what the noble Lord, Lord Cope of Berkeley, has said with regard to his amendments. I add only that the Delegated Powers Committee had some stringent things to say about the Bill, quite a bit of which concerned the extensive power retained to the Secretary of State under its measures to bring forward regulations. I shall confine my comments to that.
Lord Bassam of Brighton: Amendment No. 28 deals with the monitoring of corporate and government networks for business practice reasons. Without the
1480
regulations for which subsections (2) and (3) provide, such monitoring would become unlawful by virtue of Clause 1.
We can give an undertaking that a full draft of the regulations will be available before Report. I hope that that will help noble Lords' deliberations. As I have said before, over the next few months we shall wish to consult fully with all those who are likely to be affected by the Bill. I give an undertaking here and now that we shall carefully consider any responses to that consultation.
I understand entirely the concerns of the noble Lord, Lord Cope. The intention of his amendment is, quite rightly, to avoid any excessive regulation on business—we have no desire to impose excessive regulation on business—and that is an aim with which I entirely concur. However, I am not convinced at this stage that providing a blanket permission on the face of the Bill is the right way forward.
As we have already discussed at length today, interception is an intrusive tool. I think that we well understand that. We do not believe that it should be undertaken lightly in any circumstances. Article 8 of the European Convention on Human Rights lays down clear requirements that any interference with privacy must be in accordance with the law and be necessary in a democratic society. In other words, the law must set out the circumstances in which interception may take place with a reasonable degree of specificity. The regulations which the Bill permits the Secretary of State to make will achieve that.
We intend to consult widely with all parties with a view to making regulations which establish the general circumstances in which interception may legitimately take place for business practice reasons, but which do not contain so much detail that they tie up businesses with red tape. We have already received positive reactions to this initiative from industry, from Oftel and the DTI.
Turning to Amendment No. 29, if this amendment were agreed to, it would oblige the Secretary of State to make regulations under Clause 4. I am pleased to say that my colleague, the Minister of State at the Home Office, made a clear commitment during the Committee stage of this Bill in another place. He said:
"Later this year, we shall consult widely with all parties likely to be affected, with a view to making regulations that establish the circumstances in which interception may legitimately lake place for business practice reasons".
The Government are committed to ensuring that regulations are in place before Part I of the Bill commences. The Department of Trade and Industry will begin the consultation process on their content shortly. We do not believe that it would be acceptable to put businesses or the Government in a position whereby they will be completely prevented by law from monitoring their own communication networks in the way described in Clause 4. I hope that the noble Lord will understand that and feel able to withdraw his amendment.
I shall turn now to Amendment No. 30 and then make a brief reference to Amendment No. 31. As I understand it, Amendment No. 30 is consequential

1481
upon Amendment No. 2, which would have made a change to Clause 1(6) to require any person described by that subsection to carry out an interception in accordance with Clause 4 regulations. As I explained during our debate on that amendment, we do not believe that the requirements these amendments would impose upon the public at large would be either reasonable or realistic. I trust that on that basis the noble Lord will withdraw Amendment No. 30.
We can gratefully accept Amendment No. 31. No doubt the noble Lord has helped us to improve the quality of the legislation. I am very happy to say that we can accept Amendment No. 31. Progress has been made and we have come to something that we can all agree.
I hope that with those explanations, the noble Lord will feel able to withdraw his amendments.
9.45 p.m.
Lord Cope of Berkeley: First, may I express my deep gratitude to the Minister for accepting the most inconsequential amendment that I have moved or spoken to. It is extremely minor, but I am glad to have made a small contribution to the clarity of the drafting.
So far as concerns the more important Amendments Nos. 28 and 29, of course I am in favour of consultation about the detail of what the regulations should contain. I do not object to this being in regulations as opposed to being in the Bill. The Government made the point in their memorandum to the Select Committee on Deregulation that business practices change and it may be necessary to modify the regulations in this respect in the future.
The Minister said that the Government would begin consultation shortly; he also undertook that a draft would be ready for Report stage. It will help us to forecast the business of the House if the consultations are just beginning and will be completed in time for Report stage. I should perhaps emphasise that I was talking about seeing a draft of the regulations—not necessarily the absolutely final form—so that we know what we are talking about when we come to consider this clause again at Report stage.
The Minister also spoke of excessive regulation of business and his wish to avoid that. That would of course apply only if the regulations were unduly onerous in prescribing the business practices that would be permissible under the clause. I hope that they will not be too onerous. However, we shall be able to make a judgment on that when we see the draft regulations.
If I noted it correctly, the Minister also stated that, if amended, the clause would "commit" the Secretary of State to making regulations. It would not. It would only "permit" the Secretary of State to make regulations, which was the point behind Amendment No. 29. However, when he used that phrase, he did, in effect, accept Amendment No. 29, even if he did not say that he will do so in actuality, as he did with
1482
Amendment No. 31. Bearing in mind the progress that we have made, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 29 and 30 not moved.]
Lord Cope of Berkeleymoved Amendment No. 31:
Page 7, leave out lines 14 and 15.
On Question, amendment agreed to.
Clause 4 agreed to.
Clause 5 [Interception with a warrant]:
Lord Phillips of Sudburymoved Amendment No. 32:
Page 7, line 28, leave out ("the Secretary of State") and insert ("a judge").
The noble Lord said: I am not sure whether I still have the spirit to move this amendment, having heard about England's defeat by Portugal by three goals to two.
Lord Bassam of Brighton: A nation mourns.
Lord Phillips of Sudbury: However, the show must go on and the Bill must be scrutinised.
The nine amendments in this group all address a single, simple point; namely, whether the issue of a warrant under this clause, as specified in Clause 7, should be undertaken at the behest of the Secretary of State or at that of a judge.
We are all aware of the status quo contained in the Interception of Communications Act—if one may call that a status quo. That legislation provides for the Secretary of State to undertake this onerous task. I believe that I am right in saying that on average he has to deal with something in excess of seven warrants on each working day.
It is not my proposition, nor that of these Benches, that the Secretary of State is "unfit" in the normal sense of the word to undertake the task. However, it is our belief that times have moved on and that a considerable body of informed opinion in the country now believes that this task would be better undertaken by a judge, in particular in the context of a Bill containing the most wide-ranging and extensive powers of intervention in the private lives of citizens and organisations of the state. Again, I emphasise that there is no wish or intent on our part to suggest any bias or intentional abuse, shall we say, of the rights and duties which the issue of warrants would bestow on the Secretary of State under the provisions of the Bill.
However, the world that this Bill will control is one which comes ever closer to the private citizen in more and more dimensions of his or her life. As I have said, we are of the view that, whereas in the past it may have been satisfactory to continue with a system in which the Secretary of State had a monopoly of power in this regard, now the time has come to recognise that a separation between the Secretary of State and the powers to issue such warrants is desirable.

1483
I say that particularly in light of the fact that we are dealing here with issues of human rights that are of considerable import. We are dealing with them in a context where the Secretary of State will be exercising these powers in secret, without the citizen concerned ever knowing that those powers have been exercised. The burden on the Secretary of State will inevitably be greatly enlarged by the Bill. This may indeed be one matter which he or she would be happy to hand over to a judge.
As to accountability, it may be said that nothing is better than the present circumstance. I venture to doubt that proposition, given the covert nature of the exercise of the power, and given that. I do not believe that a busy Secretary of State can reasonably be expected to give case by case consideration to warrants when they are pouring on to his or her desk even at the current rate, let alone the rate that is to come.
Other states with which we have close relations, such as Germany, give this power to a judge—except, in the case of Germany, where national security is involved. We all ought to consider this matter carefully. There is a great deal of public concern about the nature of the Bill, particularly its human rights dimensions. For those reasons, I commend the several amendments in the names of myself and colleagues. I beg to move.
The Chairman of Committees (Lord Boston of Faversham): As Amendments Nos. 41 and 42 are also being spoken to, I must point out to the Committee that, if Amendment No. 41 is agreed to, I cannot call Amendment No. 42. For the sake of completeness and accuracy, perhaps I should also offer an apology to the noble Lord, Lord Phillips of Sudbury, because his name is spelt wrongly. It should of course be "Lord Phillips of Sudbury", not "Lord Phillips of Subdury"!
Viscount Astor: I am sure that the mistake is entirely unintentional.
My Amendment No. 47 is grouped with this one. Before speaking to it, however, perhaps I may add a comment on the amendment moved by the noble Lord, Lord Phillips. We agree with the Government on this amendment. We believe that the Secretary of State should have this power. The Secretary of State is able to have a wider view and take more points into consideration. It is important that the Secretary of State is burdened by these decisions—that is why he is there.
The noble Lord, Lord Phillips, spoke of the covert nature of some of the decisions. That provides an even greater reason why the Secretary of State should be required to take these decisions. Frankly, I am nervous of giving this power to judges. The Secretary of State is answerable to Parliament. I am happy with that: Ministers are answerable to Parliament; judges are not.
In recent times, under governments of both parties, legislation passed by Parliament has been interpreted by judges in a way that no one ever expected. That is further reason why the power should rest with the Secretary of State. That is the correct place. I am
1484
against extending such power to judges. That would be wrong. The Secretary of State should be answerable to Parliament on such issues.
My Amendment No. 47 relates to Clause 9(1)(b), which states that a warrant may be renewed by the Secretary of State,
"or, in a case falling within section 7(2)(b), under the hand of a senior official".
As I have said, Ministers should be answerable to Parliament. I am therefore nervous also about the idea of this power being transferred to a "senior official". I regard it as a retrograde step. I do not know whether it should be the Secretary of State or, indeed, any other Minister in the department. I do not know the real definition of a senior official. Is it purely someone within the Home Office, for example? It does not say so. Officials are not accountable to Parliament.
There is a definition in Clause 72, on page 78:
"'senior official' means, subject to subsection (6), a member of the Senior Civil Service".
I am sure that there is a definition somewhere, lurking in a Sir Humphrey-type way, of who is a member of the Senior Civil Service. It would be useful to know how many members of the Senior Civil Service there are in the Home Office. Are there two or are there 222? I have no idea what those definitions are. It would be useful if the Minister explained.
What really concerns me is that the definition says "subject to subsection (6)", because subsection (6) states:
"If it appears to the Secretary of State that it is necessary to do so in consequence of any changes to the structure or grading of the Civil Service, he may by order make such amendments of [he definition of 'senior official' in subsection (1) as appear to him appropriate to preserve, so far as practicable, the effect of that definition".
The nice way of looking at that is to say that someone changes the grades and there is an extra grade—grade six or seven or whatever it happens to be, and that is it. But the worry is that a Secretary of State can say, "We wish to lower this decision-making to a much wider group within the department" and may add a vast number of people. That is why I am fundamentally against the principle.
Ministers should be answerable to Parliament. It is an unfair burden to put on senior officials. I am extremely concerned about the idea that the Secretary of State can change the definition at almost any time he wants, for whatever reason. I am sure that he would consider doing it only for the right reasons, but the fact is that the power is there; he can do it whenever he wants and for whatever reason.
The power should rest with Ministers. It follows the logic of the Government's case that the Secretary of State, not judges, should have the power. That follows naturally, and therefore I would hope that the Minister will consider my amendment very carefully. I regard it as being of enormous importance, because it affects the Government's answerability to Parliament. We regard that as being extremely important, particularly in the House of Lords.
10 p.m.
Lord Archer of Sandwell: I did not participate in the Second Reading debate. That was not primarily because I had to be elsewhere; it simply reflected my abysmal ignorance of the subject matter of the Bill. I was born into the age of the carrier pigeon. But some of the principles that the Committee has been debating today are matters that can be understood even by those of us who do not follow all the technology involved.
I intervene at this stage for a particular reason. I am privileged to serve on the Intelligence and Security Committee, chaired with great distinction by Mr. Tom King. There are members of that committee who have a great deal more expertise in this field than I shall ever claim to have. In fact, almost every other member of the committee would be in that position. But they were precluded from participating in the debates in another place because the authorities, in their infinite and unfathomable wisdom, scheduled the Report and Third Reading debates in a week when the committee was 4,000 miles from the Chamber. Therefore, some at least of the comments that the committee had wanted to make fall to me to make at this stage.
I believe, first, that the Government have responded handsomely to some of the representations that the committee made. The committee was anxious that that should be placed on the record. Secondly, the committee has an interest in this debate because, among other things, it believes that the Government have the balance about right.
It has been stated repeatedly today, I believe without contradiction, that the powers which are being regulated by the Bill are necessary if the public is to be protected from a whole spectrum of serious crime but that they can be used obtrusively, and can be oppressive, and it is important that they are properly regulated.
That being so, the Government have addressed the issue by the following scheme. The application has to be made by someone who is listed in Clause 6. I understand that the Committee will debate that clause a little later. It has to be someone responsible in both senses of that word. That is the first stage.
The second stage at present is that it is to be considered by the Secretary of State or, in certain narrowly defined circumstances, by the senior official. I believe that that is right. I believe that it should be considered by someone who is a member of the executive, answerable for the execution of law enforcement and who is close—I say only close; I do not attempt to define it more than that—to the agencies which have the responsibility for operation. I can say from my own knowledge that Ministers who have that kind of responsibility take it very seriously. In a somewhat different context, I had to sign warrants at one period. They were manageable in number. I made all necessary enquiries before I signed them. I have spoken to many colleagues who have held high office, in particular as Secretary of State for Home Affairs. They have assured me that the same has been
1486
true of them. I think that the Secretary of State is the best person at that stage in the balance which the Government have arranged.
The third stage is that the Secretary of State's decision can be reviewed by a commissioner. I understand that the commissioners will be selected from the senior judiciary. It is at that stage that one has a judicial scrutiny. That is the way in which, constitutionally, we have normally arranged our affairs. It is at the stage when it reviews what the executive has done that the judiciary intervene.
Perhaps the Committee will permit me to say in parenthesis that there is a fourth stage. There is a tribunal to ensure that the proper procedures have been carried out. If I may wear a hat which I discarded last year, it is in accordance with the normal advice of the Council on Tribunals that there should not be a proliferation of tribunals. The Government are to be congratulated on bringing all the relevant tribunals under one umbrella. I believe that the Government have the right series of stages to ensure that the powers which are being regulated in the Bill are not in danger of being abused.
In agreeing with the noble Viscount, Lord Astor, perhaps I may make one further remark. As I understand it—no doubt my noble friend on the Front Bench will confirm it if true—the intention of having an official considering the application is narrowly defined, I suspect, for a situation where it will not be easy to find a Secretary of State, or even a middle-ranking Minister. There may be occasions—I believe that they would be rare—where that situation may arise. It would be a great pity if a major crime were not prevented because there was no one in a position to consider and grant the application. I shall be interested to hear what my noble friend says about that.
Lord Phillips of Sudbury: Before the noble and learned Lord sits down, perhaps I may mention this. He referred to the power of review. Does he accept that it is a general power of review and not a case by case review?
Lord Archer of Sandwell: I understand from the commissioners who operate at present that they consider individual cases. If they think that a problem is arising in relation to individual cases, they report accordingly.
Viscount Astor: I am grateful for the noble and learned Lord's support. There was never a case, so far as I am aware, where a Minister was not on duty at or very close to the Home Office. I accept the point that it would be wrong for a document not to be signed because no one was available. But in practice there is always someone present in the Home Office.
Lord Archer of Sandwell: The noble Viscount's experience of the Home Office is probably greater than mine. It would be a pity if I fouled up my noble friend's

1487
reply to this debate by saying something with which he may not agree. It may be better, therefore, if I subside at this stage.
Lord Lucas: Can the Minister take the opportunity to explain Clause 7(2)(b)? It appears that there is an exemption from the Secretary of State having to sign a warrant in a case where we are likely to know as little as possible and have the least reason to trust the person who has asked for the warrant, that is when it comes from overseas rather than from someone with whom we are generally used to working. There is a very odd provision in Clause 7(2)(b)(ii), which says,
"the interception to which the warrant relates is to take place in relation only to premises outside the United Kingdom".
If it relates to premises outside the United Kingdom, why is it within our jurisdiction?
Lord Bach: The intention of Amendments Nos. 32, 33, 37, 38 and 41 is to remove the power of the Secretary of State to issue interception warrants. Instead, this power would be handed to the judiciary, specifically a circuit judge in England and Wales, a sheriff in Scotland and a county court judge in Northern Ireland.
This serious debate has, of course, a long history and was certainly discussed at some length at both Committee and Report stages in the other place. We accept, of course, what was said by the noble Lord, Lord Phillips of Sudbury, that this is not an attack, veiled or otherwise, on the Secretary of State. The motive behind these amendments is absolutely clear.
The arguments put forward by those who advocate judicial involvement do not at the end of the day persuade the Government that that is the right course to take. We maintain the view that authorising interception involves particularly sensitive decisions that are properly a matter for the executive. This involvement by the executive has historically reflected the very high level of scrutiny which this particularly intrusive means of surveillance has attracted. The warrant-issuing process is a key part of the line of accountability from the law enforcement and intelligence agencies to the Secretary of State. Any alternative means of authorising interception would need to show that it will be an improvement upon a system which has proved to be remarkably effective over many years.
I can reassure noble Lords, however, that all interception warrants have to pass through highly experienced staff in the warrants unit who are able to identify any errors at an early stage. This process adds consistency to the way in which warrants are handled and provides a degree of oversight prior to the Secretary of State being presented with a warrant for consideration.
Of course, there is an important, vital place for judicial involvement. That comes, as my noble and learned friend Lord Archer of Sandwell said, in the independent judicial oversight provided by the commissioners and the tribunal, who are there to provide a remedy if the executive has acted outside its
1488
statutory powers. We do not believe, however, that judges can reasonably be expected to make decisions on what is or is not in the interests of national security.
The European Commission of Human Rights has endorsed the present practice of executive authorisation—for example, in the case of Christie v United Kingdom. In addition, and importantly, the current system was recently endorsed in the last report of the previous Commissioner, the noble Lord, Lord Nolan.
Perhaps I may draw the Committee's attention to one further aspect which is relevant to the discussion that we shall have on Clause 12. Requiring the Secretary of State to authorise interception means that he or she keeps a close eye on the demands made of communication service providers in respect of the interceptions they are asked to effect. That is particularly the case because in practice only a small number of Secretaries of State perform the function. It is limited normally to the Secretaries of State at the Home Office, the Foreign Office and the Northern Ireland Office and, previously, the Scottish Office. It concentrates knowledge of the burdens placed on industry. Once the requirements of industry are established under Clause 12, it will be very important that the Secretary of State keeps an eye on the use made of the capability. This cannot easily be done if individual interception warrants are authorised by judges.
10.15 p.m.
Lord Mackay of Ardbrecknish: I thank the noble Lord for giving way. Listening to that argument, I was intrigued to hear him say "previously" by the Secretary of State for Scotland. Perhaps he could tell me who under the Bill will be the relevant person as regards Scotland.
Lord Bach: As soon as I mentioned Scotland and saw the noble Lord in the Chamber. I knew that someone had made a mistake! I understand that it is Scottish Ministers in Edinburgh by way of devolved government. If I am wrong about that, I shall return to the matter later in my remarks.
I was grateful for the comments of my noble and learned friend Lord Archer of Sandwell. He speaks with great authority on these matters and the Government are reassured by his support. He has a most distinguished record not only in the area of intelligence and security but as a former Solicitor General of great distinction.
The other amendments in the group have been tabled in order to remove the role of a duly authorised senior official to issue a warrant under certain circumstances. These circumstances, which are most specific, are when a warrant application is urgent or when a request has been made under the mutual legal assistance convention. I believe that the noble Lord, Lord Lucas, was sceptical about that last issue.
It might be helpful if I explain the procedures which must be followed in urgent cases. First, the senior official who signs the warrant must be expressly

1489
authorised to do so by the Secretary of State. Secondly, the express authorisation must be in relation to that particular warrant only. Thirdly, the official who signs the warrant must endorse on it a statement that he has been expressly authorised by the Secretary of State to sign that particular warrant. So even when the urgent procedure applies, the Secretary of State must have given personal consideration to the application in order to give instructions to a senior official for the signing of that particular warrant. An additional safeguard is that in such circumstances the warrant is to last for five days only. I hope that that goes some way to assuring Members of the Committee that these provisions have been looked at carefully and that the authorisation and actions required under such circumstances are strictly prescribed.
I hope that the noble Viscount, Lord Astor, for whose support of the main part of the amendment we are grateful, will be satisfied by the fact that under the Interception of Communications Act 1985 provision was made for the signing of a warrant in an urgent case by a senior civil servant; an Assistant Under-Secretary of State. As regards urgent cases, that has been the case since 1985 and I do not believe that that power has ever been misused. Therefore, we are not making up new law; this has already been on the statute book for 15 years.
The other circumstance which allows for a senior official to issue a warrant relates to a request made under an international mutual legal assistance agreement. Here, the interception subject, or the premises where communications are to be intercepted, must be outside the United Kingdom. In such circumstances, a warrant may be issued if the competent requesting authorities have already issued an interception order against a subject of interception. Therefore, by the time it reaches us, an interception order will already have been issued against the subject of interception. As we are making no decision on the merits of the case, and the purpose of the warrant is solely to provide technical assistance—in other words, with a satellite interception or a telephone interception on foreign territory—we consider it appropriate for the warrant to be issued by senior officials rather than by the Secretary of State. I hope that that answer goes some way to satisfying the noble Lord, Lord Lucas.
I was asked what was meant by a "senior civil servant". A senior civil servant is someone who is at grade 5 and above; in other words, an Assistant Secretary or above.
In a recent and telling intervention, I was also asked about Scottish warrants. According to the Bill, they are issued by the Secretary of State. However, a devolution order under the Scotland Act will transfer that function to Scottish Ministers—in practice, the Scottish First Minister—in matters which involve serious crime. I hope that that answers the noble Lord, Lord Mackay of Ardbrecknish.
1490
I hope that the comments that I have been able to make on these matters have satisfied the noble Lord who moved the amendment and that he will feel able to withdraw it.
Lord Cope of Berkeley: I want to return briefly to the Scottish matter. We discussed it a little on an earlier amendment and my noble friend Lord Mackay of Ardbrecknish intervened on the matter again during debate on this amendment. Is it the case that under a devolution order which, according to the phraseology used by the Minister, is to be signed, Scottish Ministers—in practice, the First Minister—will be involved? That is an interesting contrast with the position in England where signing is carried out either by the Home Secretary or by an official. In Scotland, it would appear to be done by the First Minister or a more junior Minister.
Lord Bach: Perhaps the noble Lord will forgive me for interrupting. It will be done either by the First Minister or by the Deputy First Minister, neither of whom, I believe, can be called "junior".
Lord Cope of Berkeley: I accept that. However, it seems to me that if that is the case and it is the established case, it would be much better if the Bill said so. The Bill is specific. It states that it is under the hand of the Secretary of State. That is not simply a generalised reference. It is a specific reference to a warrant being issued under the hand of the Secretary of State. I suggest that it would be advantageous if there were a reference on the face of the Bill to the fact that in Scotland the regime is to be different and is to be restricted, as the noble Lord said, to the First Minister or the Deputy First Minister.
Lord Mackay of Ardbrecknish: Before the noble Lord replies, we are well into devolution; the Scotland Act is well on the statute book and the Scottish Parliament is up and running. Why are we still writing new legislation which is couched in terms as though it were still to come about? Should not the new legislation state quite clearly that the reference is to the First Minister or the Deputy First Minister of the Scottish Executive? We are going through the pretence that reference is to the Secretary of State and we are then depending on a piece of secondary legislation, which is still to be signed, to say that in the case of Scotland it should be the First Minister.
We are experiencing this problem with a raft of government Bills. It just so happens that this evening this one has come to my attention. However, some of the noble Lord's colleagues are in exactly the same position. They appear to be writing legislation as though devolution has yet to happen, when in fact it has already happened. They should be writing new legislation to take account of the fact that the reference should be to the Scottish First Minister.
I have no difficulty with the fact that the Scottish First Minister signs the warrants. I am not entirely sure that the Liberal Democrats, who may not be happy with the warrants, will be happy with the idea that the

1491
Deputy First Minister, who is a Liberal Democrat, will be asked to sign the warrants in the absence of the First Minister. The First Minister, who is a friend of mine, although not in political terms, is recovering from a serious heart operation at the moment, so I have little doubt that it is the Liberal Member who is going to have to sign them.
Why do we go on and on writing UK legislation, ignoring the fact that the Scottish Parliament and the Executive are now up and running? Should we not be doing that now and not depending on secondary legislation?
Viscount Astor: From an English point of view, is there not an extraordinary difference here? In Scotland it would be the First Minister or the Deputy First Minister, but in England it would be the Secretary of State or a senior official. What is wrong with the senior officials in Scotland? What is wrong with the Ministers of Slate in the Home Office?
Lord Bach: The same point has been made in very different ways by the noble Lords, Lord Cope and Lord Mackay. It is a good point. It is one we will take away and consider carefully.
Lord Phillips of Sudbury: No one can exceed my respect for the noble and learned Lord, Lord Archer of Sandwell, whom I have known and admired for over 30 years. I am very affected by any argument he produces on this matter, particularly in view of his experience. However, occasionally it is forgotten that it is not always right or best to ask those who have fulfilled a particular role (or even still fulfil it) as to what is the best way forward in a new era. He mentioned closeness to the police and other agencies as being a virtue of the Secretary of State's procedure. I view it as a defect, and I believe the public does.
The noble and learned Lord also mentioned a review of the Secretary of State's decision. I view that as a defect compared with an independent judicial decision, and the review in any event, as I attempted to draw from him, will be a general review and will be unlikely to cover a particular case. Later in this debate we will come back to haunt the noble Lords, Lord Bach and Lord Bassam, on the inadequacy, as we see it, of these new arrangements, but that is for another evening.
The noble Viscount, Lord Astor, suggested to us that judges are often out of step with Parliament. This is a Bill we are passing. It is an Act which will need to be construed judicially or quasi-judicially. If the judge or even the Secretary of State is out of step with Parliament that will be because they have been trying to apply this measure.
The noble Lord, Lord Bach, talked about the sensitivity of the decision which would be reached by the Secretary of State; maybe too sensitive, too sensitive to the pressing consideration which will surround the Secretary of State when he reaches those decisions, particularly as there is immense power of regulation under this Bill.
1492
The noble Lord, Lord Bach, then suggested that there are highly experienced staff to carry out these measures, and that is true. But no one is as experienced nor as competent as judges in the consideration and interpretation of complex legislation such as this. Indeed, in opening, the noble Lord, Lord Bassam, was so honest as to say that the amazingly complex web of law that is this Bill is perhaps beyond all but an experienced lawyer really to understand in all its dimensions.
These Benches are not at all satisfied with the outcome of this part of the debate. It has been acknowledged in the amendment that urgency would still be dealt with by the Secretary of State. It is accepted that national security measures are better dealt with by the Secretary of State. But, ultimately, public confidence is the judge of all that. Public confidence is not increasing as regards government, Parliament and administrations. Rather, I am sad to say, the reverse is true.
In the age of the Human Rights Act when, on 1st October, we are about to launch into an era undreamt of even 10 years ago, we should be much better, bolder and more right were we to accept the purport of the amendments. But this is not an occasion on which to attempt to take the matter further and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 33 not moved.]
10.30 p.m.
Lord Lucasmoved Amendment No. 34:
Page 8, line 6, at end insert ("and
( ) that any information obtained will only be used for the purposes for which the warrant is granted").
The noble Lord said: Amendment No. 34 speaks for itself. I beg to move.
Lord Bach: I believe that the answer speaks for itself but I had better say a little about it. The intention behind this amendment is to limit strictly the use to which information gained by means of an interception warrant can be used. I sympathise with the noble Lord's intention but the result of accepting this amendment would be, in certain circumstances, unintentionally to hamper our fight against serious crime.
For example, it is certainly possible that an interception warrant that has been granted for the purpose of national security might pick up information that would prevent or detect serious crime which falls under one of the other purposes. I stress that the information used in such a circumstance would still have to be for one of the few warranted purposes, and could not be used for a purpose that could not achieve that level of seriousness. But it would seriously hamper our tight against serious crime if the unintended result of this amendment were to prohibit any action being taken in such an instance.
However, I understand the reasoning behind the noble Lord's amendment. He wishes to ensure that the information received by means of warranted

1493
interception is not abused in any way. We have introduced into Clauses 14 and 15 of the Bill a large number of safeguards to protect warranted information and to restrict the uses to which it may be put. Those include the requirement to ensure that the distribution and disclosure of intercepted material is kept to a minimum; and that all intercepted material is destroyed as soon as it is no longer necessary to retain it for any of the authorised purposes.
So, although we sympathise with the intentions of the noble Lord, we believe that the unintended consequences of his amendment—restriction of the ability of the intelligence and security agencies to act on information, even if only because the information received would fall under the grounds of a different warranted purpose—are not ones that he would wish to see in place.
Viscount Goschen: In terms of the restrictions on the warranted information, perhaps the noble Lord will go a little further. Will he explain to the Committee what would happen, for example, in a case where the intelligence services found that they had been pursuing the wrong man but, by accident, they stumbled upon a relatively minor crime or misdemeanour?
The noble Lord said that the information would be destroyed as soon as it was no longer necessary to pursue the cause of the original warrant. But what would happen in the case that I have just described?
The Earl of Northesk: Does the noble Lord accept that the phraseology of my noble friend's amendment is entirely consistent with the Data Protection Act? Therefore, there is existing legislation which almost obliges the Government to comply with what my noble friend's amendment seeks to achieve.
Lord Bach: I can really only repeat to the noble Viscount, Lord Goschen, what I have already said on this point. If the warrant is taken out for a particular purpose and another warrantable purpose is discovered—for example, serious crime—then it would be ridiculous to shut one's eyes to that other serious crime. But the authorities would not be allowed to take advantage of a warrant obtained for one purpose if what was discovered—I use the noble Viscount's words—were some minor misdemeanour. It will not be possible to use the warrant to achieve justice in that case.
Lord Lucas: I am comforted by the words of the noble Lord, and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord McNallymoved Amendment No. 35:
Page 8, line 9, leave out paragraph (a).
The noble Lord said: In introducing this amendment let me say what a pleasure it is to see the noble Lord, Lord Mackay of Ardbrecknish in his
1494
place. I am glad that he has come for the night shift. He is probably jealous that this is not a DTI Bill because then he could have had all the fun.
These are probing amendments which look at the terms "national security" and "economic well-being". National security and economic well-being are vague and subjective ideas. The Bill defines neither. If activity is so great a menace to society as to justify interference with the fundamental rights of the citizen, one would expect it to be prohibited by the criminal law, with the definitional certainty that that attracts. Subject only to well-defined exceptions, prevention or detection of serious crime should be the sole ground for authorising interception.
In the field of national security, crimes of espionage, terrorism and conspiracy cover an enormous range of harmful conduct. In the field of economic well-being, offences covering fraud, evasion of fiscal and Customs regulation, insider dealing, false accounting, counterfeiting and so forth, prohibit an equally broad range of objectionable activity. If Parliament has not judged an activity sufficiently grave or insidious to justify bringing it within the criminal law, then it should not generally be regarded as a legitimate basis for interception or surveillance.
It is as to why these vague terms are inserted into the Bill that we probe. In case Members of the Committee think that this is just the concern of the civil liberties lobby, I was interested to receive a fax from the Alliance for Electronic Business which consists of the Computing Services & Software Association, the CBI, the Direct Marketing Association and the Federation of the Electronics Industry. It says that the clauses which provide that,
"the Secretary of State to have access to information 'for the purpose of safeguarding the economic well-being of the United Kingdom' … would give the government an unprecedented right of access to information on legitimate business activities. We believe this proposal could damage the UK's ambitions to becoming the global leader in e-business.
The generic use of 'economic well-being' in this context is potentially a highly onerous burden upon business, allowing the Secretary of State to force an intercept requirement on a business on spurious grounds.
It is essential that there is clear guidance, for example in the Code of Practice. We believe the only circumstances in which such a power should be exercised would be to carry out regulatory activities already authorised under existing legislation, for example, Financial Services legislation. It is absolutely vital that the guidelines have clear criteria to ensure business understands what is a legitimate requirement".
There we have both from the civil liberties lobby and from business a concern that there have been slipped into the Bill two very vague terms of "national security" and the "economic well-being" of the United Kingdom, which could be used as "catch-alls". We probe to find out why they are there.
Lord Cope of Berkeley: As far as I am concerned, I think that warrants can readily be justified if necessary in the interests of national security. That is covered by Amendments Nos. 35 and 122. I am not sure where national security is defined. It is not defined in the Bill. By definition, it would seem to be national security not involving serious crime, because serious crime is

1495
covered under Clause 5(3)(b). So it is national security of some other character. There are national security considerations of another character essentially covered in the jargon, as it were, by the word "spy" as opposed to "terrorist activity", which involves potentially serious crime. I am content with that.
Where I start to wonder what it is all about is when we come to (c), the subject of the second of the two amendments in this group, Nos. 36 and 123. It talks about safeguarding the economic wellbeing of the United Kingdom. That is an enormous phrase. When I was a Member of the other place I had a great deal to do with the aircraft industry and from time to time we were concerned about whether defence orders from the UK and from overseas went to British companies or to American or other companies. A great deal of time was spent on trying to make a case on behalf of our constituents and for neighbouring constituencies as well, in order that the UK could gain from these defence orders.
I believe that it was, and still is, in the interests of the economic wellbeing of the United Kingdom that these orders should have gone to UK companies. It would have been of great advantage to the companies concerned, and indeed of the Government in some respects, to have known what overseas firms were doing in respect of such contracts. To have a warrant to inquire into that kind of thing seems to me entirely consistent with the permission being given in this subsection. I hasten to acid that I do not think that is what this Bill should be all about: it should be about combating terrorism and serious crime. However, they are already covered by (a) and (b) and do not need covering by (c).
These days there are other considerations, like exchange rates and other financial matters, in which it would be greatly to the advantage of British interests, both in the national sense and in the sense of British companies and institutions, to know some of the things that were happening in respect of foreign financial institutions. Safeguarding the economic wellbeing of the country is extremely important. One can argue about things like exchange rates, the euro and so on, but I am not going into all that. Is interception to be used for this purpose? Is that what is intended by safeguarding the economic wellbeing of the country?
It is not only a question of interception which is covered by Clause 5 and the first of the two amendments. Intrusive surveillance might also be used, and that is covered by the second of the two amendments. If it is thought by foreign companies that if they had a British partner, whether to do with defence, aerospace, finance or anything else, they might be subjected to the interception of their e-mail and so on, they would be much less inclined to have a British partner as their own interests might be placed in jeopardy.
1496
It seems to me that this is an extremely wide power, going well beyond what this Bill should generally be about. Perhaps the noble Lord the Minister will be able to reassure us.
Viscount Goschen: May I associate myself with the remarks made by my noble friend Lord Cope with regard to (3)(c)? We can see what the Bill is driving at, but the way it has been drafted is incredibly broad. There is a very substantial power here for the Government to intervene, not necessarily where they see lawlessness taking place, but for the purpose of safeguarding the economic wellbeing of the United Kingdom. That could take into account a broad variety of circumstances. For example, one can think of currency speculators acting against the pound, or of bugging Mr Greenspan's conversations and so on. One thinks of serious takeovers involving national interests, employment and so on. One does not have to stretch one's memory back too far to think of serious corporate activities in the United Kingdom in the past year or so that would have fallen within the scope of the Bill.
The Government must be more specific and tighten Clause 5(3)(c). One difficulty that the financial community and industry have with the Bill is the prospect that it may drive commerce overseas. Clause 5 has that risk written all over it.
10.45 p.m.
Lord Bassam of Brighton: I am grateful to the noble Lord, Lord McNally, for raising his probing amendments in the way he did, to flesh out concepts.
Threats to national security change over time and, as yet, Parliament has not enacted a definition, It may help if I describe our understanding of the term "national security", which has been the subject of numerous debates in Parliament over the years. Ministers and parliamentarians have defined threats to national security as any substantial threat to the nation as a whole; matters that relate to the survival or well-being of the nation; protecting the security of the nation and safeguarding its economic well-being from outside threats; any contribution to the protection of the nation's security that is clearly necessary; and the protection of freedom for us all.
Other definitions might include the safeguarding of the state and community against threats to their survival or well-being; defence of the realm and of government defence and foreign policies involving the protection of vital national interests in this country and abroad; and defence of the realm against potential enemies.
The term "national security" can refer only to matters relating to the survival or well-being of the whole nation, not political, sectional or lesser interests. As we see it, the term is concerned with espionage, terrorism and subversion, and with the acquisition of intelligence in support of the Government's defence and overseas policies. We take it that "national security" includes, but is not necessarily confined to, protecting against threats of espionage, terrorism and sabotage; the activities of agents of foreign powers;

1497
and actions intended to overthrow or undermine parliamentary democracy by political, industrial or violent means. Those may all reasonably be described as being in the interests of "national security".
Similarly, the term "economic well-being" could include identifying warnings of threats to the supply of energy, commodities and raw materials on which the UK is particularly dependent; identifying attempts by rogue traders or others to manipulate commercial markets, especially when such actions could undermine confidence in the City or affect the stability of financial or other markets; and developing better government understanding of events and trends that could have a serious effect on the UK economy.
The meaning of the phrase was debated at length during the passage of the Interception of Communications Act 1985, and the description used then by Ministers remains valid. Safeguarding the economic well-being of the United Kingdom does not mean industrial espionage or intelligence gathering on behalf of UK companies. In all cases, the aim of work carried out under this heading is to allow the Government to take such protective actions as are appropriate and consistent with obligations under national, EU and international law.
It is a crucial part of the UK's foreign policy to protect the country against adverse developments overseas which may have grave and damaging consequences for our economic well-being and future. Therefore, by definition, the matter must be one of national significance and cannot be what one might accurately describe as being of a trivial nature—
Viscount Astor: Perhaps I may interrupt the Minister for a moment. In his description of the definition of,
"the interests of national security".
the Minister used the words "economic well-being". If "economic well-being" comes under national security, why do we need paragraph (c)? The noble Lord also described "economic well-being" as being of national significance. If that is the case, we can all understand the phrase "economic well-being" when it is connected to national security. However, when the Minister puts the phrase on its own, that raises all sorts of connotations. I do not understand why we need paragraph (c), when what the Minister said about paragraph (a) as regards national security actually covers the term "economic well-being".
Lord Bassam of Brighton: My explanation would probably go something like this. I tried to set out an explanation giving various interpretations of the meaning of the term "national security". Part of that explanation relates to economic well-being. In itself, the latter is of importance and significance. Therefore, it is considered useful to have it set out separately.
In putting forward his probing amendments, the noble Lord has tried to flush out what we might consider "economic well-being" to mean, and how
1498
that might be best interpreted and understood in the context of this legislation. I tried to provide a reasonably coherent set of explanations to that end.
I was about to make a point on the report of the all-party Intelligence and Security Committee. Its annual report in 1996 said:
"We reviewed the subject with both the intelligence producers and consumers, and came to the overall conclusion that intelligence work in support of economic well-being is an important, valuable and, on the evidence we have taken, properly conducted area of the Agencies' activities".
I believe that to be a very useful observation on the term.
The noble Lord, Lord Cope, and the noble Viscount, Lord Goschen, asked, essentially, what the extent of "economic well-being" might be, where it might lead us and what kind of subjects it might cover. It has been a fairly long-standing practice not to go into too much detail in such matters. However, in his 1991 report, the then Interception Commissioner, Lord Lloyd, stated that there had never been more than a few warrants issued on the ground of safeguarding the economic well-being of the United Kingdom. I believe that I can confirm that that is still the case. It would not be right for me to comment on particular examples, other than those that are commonly understood.
It must be a matter of national significance; indeed, that must be clear. It cannot be something trivial. The emphasis has to be properly on protective action—that is to say, action that is protective of the economic wellbeing of the United Kingdom. As I said earlier, it is the case that the intelligence work that is currently carried out for this purpose has been endorsed by the Intelligence and Security Committee as being of particular importance. Ultimately, the decision as to whether it is right in each case must be a matter for the Secretary of State; and, of course, there is accountability here.
The Secretary of State's actions are reviewable by the commissioner. If, on consideration of all relevant factors, the Secretary of State took the view that the economic well-being of the country was under threat, and that interception in a particular case was both necessary and would be a proportionate action to take, he could authorise any such interception by means of a warrant. I believe that that makes good sense in those circumstances.
I hope that that explanation has furthered the debate. I hope that it has satisfied in part at least the intent of the probing amendments of the noble Lord, Lord McNally. I should have made it clear that threats to the country's economic well-being may overlap with national security—I believe that the noble Viscount, Lord Astor, mentioned that point—but it is, nevertheless, a legitimate purpose in its own right. The Committee may wish to reflect on that point.
Lord Mackay of Ardbrecknish: I have listened to the Minister's reply. I have absolutely no problem with the provision relating to the interests of national security. I suspect that I am one of three noble Lords present in the Chamber who have signed warrants. I suspect that

1499
the noble and learned Lord, Lord Archer, has signed many more than I have. I believe that my noble friend Lord Cope may have signed one or two in his time. As I say. I have no argument with that point.
However, I was worried by the Minister's comments on economic well-being. I believe that he said that the measure might help in the better understanding of events which relate to the economic well-being of the United Kingdom. Many companies in this country are part of multinational groups. Often decisions taken by those multinational groups considerably affect the economic well-being of this country. For example, the recent decisions taken by BMW could be considered to have affected the economic well-being of this country. Would it have been legitimate for the Department of Trade and Industry, which seemed to be in almost total ignorance of what was going on, to seek a warrant to intercept the considerable e-mail and telephone traffic which must have taken place between the high command of Rover in this country and BMW in Germany? The Government could thus have kept track of events which were clearly of enormous economic significance to this country.
When we go down these difficult roads we must be sure what powers we are giving to government. I have no doubt that the noble and learned Lord, Lord Archer, my noble friend Lord Cope, myself and, indeed, the noble Lord, Lord Bassam, if he has had to sign a warrant in the absence of Mr Straw, have taken that duty extremely seriously. However, to sign a warrant on the ground of economic well-being seems to me to go miles beyond the basis of any warrants that I was expected to sign. I suspect that is true as regards the noble Lords I have mentioned.
Lord Bassam of Brighton: It would be unwise for me to be drawn into whether it is right for us to authorise warrants to tap into e-mail systems, the contents of which may or may not relate to recent events at BMW and Rover. That would be quite wrong.
However, the Committee is entitled to an explanation of the extent of the term "economic wellbeing" in this context. I thought that I gave an honest and straight interpretation. I said quite plainly that we sought to develop a better government understanding of events and trends. I explained that the power had been used extremely sparingly and that the interception commissioner, the noble and learned Lord, Lord Nolan, had considered that where a threat or potential threat was posed to economic well-being, the power might be used in certain circumstances. No government would wish to set aside the opportunity in those extreme circumstances—few as they may well be—to authorise a warrant. That would be very foolish indeed and would do little to sustain the confidence of industry and commerce. I invite the noble Lord to reflect on that.
No doubt when he was a member of a government, that government would have used the opportunity from time to time, when it was necessary, to authorise warrants where it was properly felt that the economic
1500
well-being of the United Kingdom was being undermined. It would be a foolish government indeed that set that opportunity on one side.
11 p.m.
Lord Mackay of Ardbrecknish: That is all right as far as it goes. All of the warrants that I was asked to sign were clearly designed to do something about the Irish Republican Army and its threats to the law.
The problem with the noble Lord, Lord Bassam, is that when he tries to be helpful he makes me more worried than I was at the beginning. He said that he did not want to comment on my example. Did he not want to comment because he did not think that my example was relevant, or because he did not want to get into that ground? That requires a "yes" or "no" answer. I postulated the circumstances of an international company and I mentioned BMW. But the circumstances could relate not only to BMW but to many other companies which, over the past 20 or 30 years, have had to do rather difficult things with their subsidiaries in the United Kingdom so far as concerned the well-being of this country; it could have been any of those companies.
My question is whether it would be right in those circumstances to intervene on their electronic and telephonic traffic in order to obtain a better idea of events. The answer is either "yes" or "no". They are not doing anything illegal; they are not doing anything which threatens national security. Arguably they are doing something which threatens the economic wellbeing of at least a part of this country and perhaps a considerable workforce, but is that a sufficient definition to obtain a warrant? It is a clear question which requires a "yes" or "no" answer. If I were confronted with a request for a warrant of that nature, I would have severe difficulty in signing it.
Viscount Astor: Perhaps I may help the Minister by giving an example. He will no doubt remember the dark days when the pound fell out of the ERM and a number of currency traders—notably Mr Soros—supposedly made a huge amount of money out of betting against the pound. If, in the future, someone chose deliberately to run the currency either up or down—the direction does not matter—and ther to bet on it, would that kind of action be subject to a warrant being considered on the grounds of economic wellbeing? The Minister may remember that the government of the day resisted the trend going against them and it cost them a lot of money. If anyone has a go against the currency, is that regarded as an area that the Government would consider relevant?
Lord Bassam of Brighton: The danger of trying to legislate by example in this way—which is what both noble Lords are seeking to draw me into—is that one does exactly that. It is wrong to declare exactly what kind of examples may or may not be included within the overall term that we are seeking to understand better. Examples do not always necessarily make for a better interpretation.

1501
As I said, there may be occasions—it has to be termed in that way—where it is right to authorise a warrant for interception to protect the economic wellbeing of the country. We have to make a judgment when such circumstances arise. In all honesty I said that it might cover events and trends. However, I think that it would be best to leave it at that because I do not think that it would be helpful to pursue these hypothetical examples. I believe that it is right to provide for this power and authority. It is subject to a form of accountability and, of course, the intelligence commissioner will have an interest in these matters.
Lord Mackay of Ardbrecknish: Perhaps the noble Lord will give way. We are trying to seek his view on this, in his role as a Government Minister. I accept that my noble friend Lord Astor and I have put forward hypothetical cases here, but they are hypothetical examples that nevertheless reflect two very real situations.
A simple answer could be given in the case of the currency speculation that took place when the pound fell out of the ERM. Does the Minister believe that such a situation would constitute an attack on the country's economic well-being sufficient to merit the issue of a warrant to intercept the telephones or e-mails of certain speculators?
As regards the situation I outlined, does the Minister believe that, if the Bill had been enacted as it stands, the Government should have used the powers conferred to intercept e-mail traffic between BMW and Rover in the days leading up to BMW's decision? Surely the noble Lord can give me a simple "yes" or "no" answer. There is little room for equivocation, given that these were real situations that are now part of our history.
Lord Bassam of Brighton: I can see that the noble Lord is becoming rather excited about this point. However, as the noble Lord well knows, in government these situations are not painted in black and white and do not always respond well to "yes" and "no" decisions. Grey zones apply in such cases.
The question for the Secretary of State to consider in such circumstances would be whether it would amount to a sufficiently serious threat to the economic well-being of this country. In those circumstances, the Secretary of State would then have to consider whether the issue of a warrant was necessary. The matter is simple and turns on a proportionate reaction to a given set of circumstances. The element of proportionality would form an important part of any decision reached by the Secretary of State.
The noble Lord spoke of the kind of warrants he has had to sign as they related to terrorism. In some senses, a parallel can be drawn here. In those situations, the noble Lord would have had to come to a decision whether, in exercising those powers, the decision was right and proportionate to address the seriousness of the threat. Surely he will accept and understand that a black and white, "yes" or "no" response is not always
1502
appropriate. To try to come to a decision on whether it would be right and proper to issue warrants by responding to examples put across the Dispatch Box would be the wrong way to proceed.
Lord McNally: I am about to withdraw the amendment. Before I do so, perhaps I may say in response to the point made by the noble Viscount, Lord Astor, on the management of the economy at the time the pound came out of the ERM, that there is absolutely no evidence that intelligence of any kind was shown at the time. He should rest assured on that point.
As regards an attempt to break into BMW's communications network, we know that the Americans would have got there first if we had tried to take an action of that kind. I believe that the noble Lord, Lord Mackay of Ardbrecknish, has demonstrated the benefit of being well rested and coming late to a debate of this kind. The noble Lord appears to have the energy of a Portuguese substitute tonight. He has been all over the pitch and he is in dazzling form.
Nevertheless, the Minister should take note of the concern expressed in the fax sent to me from the CBI and in other evidence from those at the sharp end, that leaving in the Bill a general catch-all power might have implications for British companies and for our future e-commerce. If nothing else, we shall return to that point later in the proceedings on the Bill. For the moment, however, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 36 to 38 not moved.]
Clause 5 agreed to.
Clause 6 [Application for issue of an interception warrant]:
Lord Cope of Berkeleymoved Amendment No. 39:
Page 9, line 4. at end insert—
("( ) the Chief Executive of the Benefits Agency;").
The noble Lord said: This is another matter that was discussed in another place. The amendment nevertheless makes a valid point, as the answer given by Ministers there was not satisfactory.
The clause specifies who may apply to the Secretary of State or the First Minister for an interception warrant. Most of the people listed are obvious: the Director-General of the Security Service, the senior policeman—a provision which received a certain amount of discussion in the other place—and the Chief of Defence Intelligence. But one notable exception is the Chief Executive of the Benefits Agency.
I am not supposing that the Benefits Agency will wish to use these powers and apply for warrants for individual cases of small benefit fraud. There is quite a large number of such cases and considerable effort is made to try to catch up with them. I do not believe that such cases would be an appropriate use of this provision. However, there is in addition some major fraud involving the Benefits Agency. It involves

1503
criminal conspiracies on quite a large scale and many millions of pounds, and is large enough to justify an application for a warrant of this character.
Some of the frauds are managed from overseas. I got to know about one in particular—a large fraud that took place some years ago. It was extremely difficult to pursue, partly because much of it was managed from overseas; but it also involved dealing with people in this country. In that case, interception warrants would have been very valuable. I cannot recall whether interception warrants were used in that case, but in some circumstances they would certainly be justified.
It was said in another place that the police tend to become involved if the fraud is large enough. However, it is the Benefits Agency that has ultimate responsibility for stopping fraud in the benefits system and for combating such crimes. Of course, the agency receives assistance from the police from time to time, and some of the powers which only the police have can be necessary in the course of such investigations. But such frauds are complex and involve details of the benefits system which the Benefits Agency knows much better than the police do. It is right that the agency should be in charge of the investigation of such frauds, just as it is right that Customs and Excise should be in charge of investigational matters that come within its purview and which can involve large criminal conspiracies, as I know from my experience in the department. Therefore, given the scale of some benefit fraud, it seems odd that the Chief Executive of the Benefits Agency is not included in the list.
The one practical benefit of the discussions on the matter in another place was to narrow down the fact that the Chief Executive of the Benefits Agency did appear to be the right official to include, rather than others who were suggested at an earlier stage, such as the Permanent Secretary. I believe that to be the case. It would be right to include this official among those listed in this part of the Bill. I beg to move.
The Earl of Northesk: I support my noble friends in this amendment. We all know why the Government have resisted this modest addition to the list of those empowered to make an application for an interception warrant. It is because there is a presumption that instances of benefit fraud will be subject to criminal investigation, and the fact that the police are already listed in Clause 6(2) obviates the need for the Chief Executive of the Benefits Agency to be added to the list. I am bound to say that I find that a singularly lacklustre defence.
I am sure that the noble Lord the Minister, in preparing for scrutiny of the Bill, will have delved into our proceedings on the Data Protection Act 1998. One of the salient features that emerged from our debates on that measure was that there should always be a presumption against making the exceedingly powerful analytical tools of the new technology, such as data matching, available to government departments without statutory authority. Indeed, that premise has its roots in consideration of the Social Security Administration (Fraud) Act 1996—my noble friend Lord Mackay of Ardbrecknish may remember it—
1504
when the previous administration accepted the arguments of the noble Baroness, Lady Hollis of Heigham, and the noble Baroness, Lady Gould of Potternewtown. I shall quote from each.
The noble Baroness, Lady Hollis, said:
"In principle we welcome data matching so that local authorities and DSS managed benefits share a common IT architecture along the lines of project accord. But we shall want to take great care that it does not unreasonably invade the privacy of tenants and, of course, the national and international rules about data protection".—[Official Report, 17/2/97; col. 465.]
The noble Baroness, Lady Gould, said:
"the sharing of personal information and data matching between two or more organisations, crucial as it is, raises fundamental principles of data protection, including the principle th, it personal information should only be used for the purpose for which it is collected … There must be a balance between the use of data matching to detect fraud in order to protect public funds and the individual's right to privacy".—[Official Report, 17/2/97; col. 490]
The difficulty with the Government's response to the amendment is that it runs against the grain of those views. It implies that data matching and other analytical tools should be freely available to the investigative authorities across departments, but without being rooted in statutory sanction. My interpretation is that it is important that the Benefits Agency be given specific statutory authority to be able to make use of its databases for the detection of fraud, rather than relying on the conferment of an inferential grant to the police.
In effect, not only is the amendment of my noble friends important and significant in terms of its contribution to the needs of law enforcement, but, as important, it affords the individual citizen an additional check and balance against possible arbitrary and inappropriate use of the analytical tools of the new technology.
11.15 p.m.
Lord Bassam of Brighton: I am intrigued by the noble Earl's comments. They seemed somewhat adjacent, rather than directly related, to the area that we are considering. I shall study Hansard with great interest.
We take the view that the amendment is entirely unnecessary, although I understand and sympathise with its intention. We all want to see an appropriate and proper measure to combat benefit fraud, but providing the Benefits Agency with the power to apply for an interception warrant seems to us neither appropriate nor necessary.
I should like to take the police as a comparable example. If the police wish to intercept a communication when the cases they are investigating are serious enough, they must approach the National Criminal Intelligence Service to apply for a warrant:. Individual forces are not able to apply in their own right. Similarly, if the DSS is working on a serious fraud inquiry with the police, it can either apply through the police or via NCIS for an interception warrant, or it can apply to NCIS directly itself.
Therefore, we see no need for the Benefits Agency, as a body in its own right, to be added to the list. It does not in any event possess the technical capability to

1505
intercept communications, nor have we received any formal request or pressure, or interest, from the DSS or the Benefits Agency to be considered as an intercepting agency.
We have to take steps and measures which are proportionate, appropriate and necessary. This proposed addition to the list is entirely unnecessary. If it were made it would not add any extra weight or strength to the investigatory effect of the Benefits Agency. Not having it there in no way hampers the agency's work in detecting fraud nor its important fraud detection work with the police service. As with other agencies, all it has to do is to apply through the police, via NCIS, or make a direct application. We do not believe that the amendment is necessary.
Lord Archer of Sandwell: Before my noble friend sits down, I note that the Inland Revenue is not included in the list. Has it ever suggested that it needs to be included specifically? Alternatively, is it content to work through NCIS?
Lord Bassam of Brighton: I think that it, too, is content with the arrangements set out in the Bill. It is content to work through NCIS. That seems to us appropriate. We believe that the Benefits Agency will work in the same way.
Lord Cope of Berkeley: The Minister suggested that there was a comparison between individual police forces and the Benefits Agency. I do not think that that is relevant. I agree that individual police forces in England and Wales, although not in Scotland, cannot apply; in Scotland they can. It is no part of this proposition that individual benefit offices or areas of the Benefits Agency should be able to apply. The analogy is more direct with the Commissioners of Customs and Excise, for example.
As regards the Inland Revenue, perhaps it might be considered for this list alongside the senior revenue department of Customs and Excise. I do not press that. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 40 not moved.]
Clause 6 agreed to
Clause 7 [Issue of warrants]:
[Amendments Nos. 41 to 44 not moved.]
Clause 7 agreed to.
Clause 8 [Contents of warrants]:
Lord Lucasmoved Amendment No. 45:
Page 10, line 2, after ("person") insert ("(with or without such other persons as may be associated with him)").
The noble Lord said: The amendment is unnecessary because the definition of "person" on page 77 includes,
"any organisation and any association or combination of persons".
That raises the question as to why Clause 8(1)(a) is in the Bill. If a "person" includes any combination of persons, there is no restriction on those to whom it
1506
applies. It can apply to all Members of the House of Lords, or any other connection, or disconnection, of people one chooses to think of. There is no restriction in personal terms as to who the warrant can apply to. It can be any grouping one cares to think of whether or not there is any logical connection because a "person" can be any combination of people.
I should like to know why Clause 8(1)(a) refers to "one person" when there is no restriction on the persons described. Given the ability to sweep up a whole county or a kingdom in a single warrant, why is the provision restricted to "a single set of premises"? It seems odd to have this dichotomy, with no restriction on the number of people, but restricting the provision to "one single set of premises". I beg to move.
Lord Bach: I do not think that I can assist the noble Lord on the questions he poses. The expression "one person"—it can cover one person or, because of the way in which it is defined in Clause 76, a number of people—is precisely the right way to draft the provision.
Lord Lucas: I think that there is a move to go to bed. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Bachmoved Amendment No. 46:
Page 10, line 9, after ("identifying") insert ("the communications that may be or are to be intercepted.
( ) Any factor or combination of factors set out in accordance with subsection (2) must be one that identifies").
The noble Lord said: On behalf of my noble friend I hope that I can be as brief as the noble Lord, Lord Lucas, when moving his amendments.
Clause 8 sets out what an interception warrant must contain. For example, the name or description of the interception target is described on the face of the warrant. Attached to the warrant is a schedule which identifies the communications which are to be intercepted.
Government Amendment No. 46 improves the drafting by splitting subsection (2) into two parts. It is solely a technical alteration. There are no policy changes. I beg to move.
On Question, amendment agreed to.
Clause 8, as amended, agreed to.
Clause 9 [Duration, cancellation and renewal of warrants]:
[Amendment No. 47 not moved.]
Clause 9 agreed to.
Clause 10 agreed to.
Clause 11 [Implementation of warrants]:
Lord Cope of Berkeleymoved Amendment No. 48:
Page 13, line 8, at end insert ("except for particulars which are necessary to identify the target of interception for the purpose of ensuring that conduct is in accordance with section 5(6)").

1507
The noble Lord said: This clause is all about the implementation of warrants. Subsection (3) provides that a warrant that is served on a person can, to the extent that it is allowed to be so or is agreed by the person to whom the warrant is addressed, omit some of the schedules to the warrant. This amendment seeks to ensure that the particulars which are necessary to identify the target of interception are not omitted. It makes particular reference to Clause 5(6), which relates to the conduct which is authorised by a warrant.
It seems to me important that anyone who has a warrant of this character served on them must understand and must be able to know from the warrant exactly what is the target of the interception in order to be enabled to carry it out with precision. This is one element of the warrant that should not be omitted or obfuscated in any way on the warrant— hence the reason for this amendment.
There are clearly some aspects of the warrant which might be omitted, bearing in mind that we are dealing with intelligence matters and so on. Perhaps some aspects should not be omitted, but it seems to me that these are some aspects which should never be omitted. I beg to move.
Lord Bach: The intention behind Amendment No. 48 is to ensure that if a warrant is served on an individual to assist in an interception request and the schedules attached to the warrant have been modified, they are not modified to such an extent that the individual cannot adequately action the request and therefore, as the noble Lord has just said, fall foul of the duty of conduct provisions in Clause 5 of the Bill.
I hope that after I have clarified the warranty implementation process, the noble Lord, Lord Cope, may feel in a position to withdraw the amendment.
Each warrant contains a cover document which names or describes the person or set of premises which is the interception target. The warrant will also comprise one or more schedules which will list the communications factors to be intercepted; for example, the postal address, e-mail address or phone numbers used by the interception target. Each schedule will contain only factors, not the names of any target. Different schedules may be served on an individual telecommunications operator or individual Internet service provider.
The intention of subsection (3) is to ensure that the information needed by an individual served with an interception warrant is the minimum necessary to carry out the interception requirement and no more. We do not believe that it is necessary or good practice, for example, for a telecommunications operator also to be provided with a schedule listing the other interceptions that have been carried out, perhaps by the postal service or perhaps by an Internet service provider.
We have allowed for the interception agency to be able to remove one or more schedules from the warrant so that the information provided is no more than is necessary to conduct a particular interception
1508
by a specific communications service provider. There is simply no need for a single provider to see all the various schedules which may form part of a single warrant. Each will see the front sheet with the name of the target. I hope that that explanation will go some way towards satisfying the noble Lord.
Lord Lucas: When the interception being affected is made by means of a piece of equipment which the Government have placed on the premises of an Internet service provider, and that piece of equipment is operated remotely, say, from GCHQ to adjust the email addresses which are being intercepted from time to time, on whom will the warrant be served and what information will it contain?
Lord Bach: I find it difficult to answer that specific question. Perhaps the noble Lord will give me time to consider it and return to the matter. I am not sure how it relates specifically to Amendment No. 48.
Lord Cope of Berkeley: With respect, it is relevant. I am not sure where the Internet service provider comes into all this, but, judging by the Minister's response, it does. Presumably the warrant will be addressed to the agency or the Director of the National Criminal Intelligence Service. Under the 1985 legislation, the warrant was addressed to British Telecom or whoever was to conduct the telephone tapping. But I understand that that will no longer be necessary. If the black box system works, the ISP will not know what is going on. It will only have installed the black box and maintained it. I understand that the warrant will be served only on the police agency or whichever agency will carry out the surveillance via the black box. The provider will not need to see it at all.
Lord Lucas: I suspect that that is an excellent answer and I look forward to the time when my noble friend Lord Cope is answering for the Government.
Lord Cope of Berkeley: It seems that whether or not the answer was satisfactory, it is all we are going to get.
Lord Bach: The noble Lord is quite right.
Lord Cope of Berkeley: No doubt the Minister will write to us. He is acknowledging that he will do so. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 11 agreed to.
Lord Bach: I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.
House adjourned at twenty-six minutes before midnight.