HL Deb 16 May 2000 vol 613 cc181-8

3.18 p.m.

Report received.

Clause 2 [Arrangements for the grant of approvals]:

[Amendments Nos. I and 2 not moved.]

Clause 5 [Regulations under Part I]:

Lord McIntosh of Haringey moved Amendment No. 3: Page 6, line 3, at end insert— ("( ) Before making any regulations by virtue of section 2(3)(a) or (b) the Secretary of State shall consult—

  1. (a) such persons appearing to him to be likely to be affected by those regulations, and
  2. (b) such persons appearing to him to be representative of persons likely to be so affected,
as he thinks fit.")

The noble Lord said: My Lords, Amendment No. 3 stands in the name of my noble friend Lord Sainsbury of Turville. I should explain that my noble friend apologises to the House for his absence, but he is in Japan for the whole of this week on, needless to say, government business.

Before turning to Amendment No. 3, I should like briefly to say a few words on the important topic of data protection in connection with Clause 4 of the Bill. During the discussion in Grand Committee, my noble friend Lord Sainsbury noted that there was a somewhat complex interaction between the Data Protection Act 1998 and this legislation. He promised the noble Lord, Lord Razzall, who had raised the subject with him, to say a few words at Report stage about this interaction.

Clause 4 concerns regulatory information obtained for the purposes of Part I of the Bill. One of the purposes for which this information may be disclosed is in connection with criminal proceedings. But in deciding whether to make such a disclosure, the Secretary of State would have to take into account whether that disclosure is consistent with the Data Protection Act. So there is no conflict between the two pieces of legislation.

To be precise, information in this case comes into the possession of the Secretary of State through the powers invested in him in Part I of the Bill. The information, from those bodies seeking "approval" under Part I, may be commercially confidential or affect people's privacy, so it is important to define precisely the purposes for which the information can be disclosed. The clause thus makes it an offence to disclose information obtained under Part I of the Bill unless it is for the purposes spelled out in the clause, or the data owner has given his consent to its disclosure. There are precedents for such disclosure provisions, including legislation on competition, utility regulation and financial services.

Turning to the Data Protection Act 1998, in relation to Clause 4, perhaps I should start by noting that the Act does not, in the most part, lay down cast-iron rules on the circumstances under which information might be disclosed. Instead it lays out a framework under which those holding information can judge the extent to which it can be disclosed and to whom. This, in turn, will depend on the nature of the information—what it might identify about the person or body concerned—on what basis it was obtained and the purposes for which disclosure is to be made. A further consideration would, of course, be whether the subject of the information had expressly consented to the information being made available to other than the data holder.

In turning to Clause 4 in this context, the important point to make is that it does not mandate the Secretary of State, or anyone else, to disclose any information at all. Instead, in subsection (2), it limits the purposes for which information can be disclosed if the Secretary of State so decides. And in deciding whether information should be disclosed, the Secretary of State has to be mindful of the Data Protection Act. In other words, in each circumstance where data were to be disclosed, say, for example, in connection with the investigation of a criminal offence under subsection (2)(c), the Secretary of State would need to be satisfied that such disclosure was compatible with the Act and the data protection principles it outlines. This, as I said, would, inter alia, depend on the exact purpose of the disclosure, the nature of the information and what the data subject had been told about such potential disclosure when the information was submitted.

Such decisions, which the Secretary of State is obliged to make in each case of potential disclosure, are not uncommon. They occur with respect to other legislation and are the basis on which the Data Protection Act has been drafted. Therefore, I am pleased to be able to reassure the noble Lord, Lord Razzall, and others, that, for the reasons I have outlined, Clause 4 is consistent with the Data Protection Act, and indeed strengthens, rather than weakens, the protection given to information submitted by those seeking approval under Part I of the Bill.

I turn to Amendment No. 3. I hope that noble Lords will welcome this amendment. It merely reflects a commitment made by my noble friend Lord Sainsbury in Grand Committee to write on the face of the Bill our decision to consult on the approvals criteria. I beg to move.

Baroness Buscombe

My Lords, I thank the Minister for his further clarification regarding consistency with the Data Protection Act in relation to Clause 4. I thank the noble Lord for his explanation of Amendment No. 3 and confirm our support, as clearly stated during our debate in Grand Committee, for the need for consultation on a broad scale. As I stated in Grand Committee, the credibility of any regulatory scheme depends upon the degree of respect that it has among the major practitioners and consumers in that industry. We are concerned here with a new, nascent industry and it is therefore crucial that the Government listen to and respect those involved with its evolution to ensure that its development will not be compromised or impeded in any way by unnecessary or burdensome regulation.

Lord Razzall

My Lords, I am grateful to the Minister for his response to the concern I raised on the Data Protection Act and, in particular, for his detailed statement which, when set out in Hansard, will be very useful for future interpretation of the Bill.

Lord Lucas

My Lords, perhaps I may raise one or two questions on the wording of the amendment. I am concerned that the word "shall" in conjunction with paragraph (a) means that the Secretary of State is obliged to consult everyone who might be affected by those regulations, which is likely to be quite a large number of people. That is particularly so when it is taken with the word "and" at the end of paragraph (a). He not only has to consult those people but also people appearing to him to be representative of them. I am concerned that there is not the usual combination of "may" and "or", which are the words I would have expected there, and that the drafting will leave the Secretary of State with a very large task on his hands and one on which he may well be challenged on suspicion of incompleteness.

Lord McIntosh of Haringey

My Lords, I am grateful to the noble Baroness, Lady Buscombe, and the noble Lord, Lord Razzall, for their support, both for the amendment and for the statement which I was able to make about the Data Protection Act. I am grateful to the noble Lord, Lord Lucas, for his tender concern for the sensibilities and duties of the Secretary of State. If there were the kind of challenge to which he referred, the Secretary of State could respond by saying, in terms of the final three words of the amendment, that he did not think fit to go any further in the consultation than he had done. I think that is a let out. It is an interesting point. We frequently use "shall" and "and" where some people think that we should use "may" and "or"; and more frequently the other way round.

On Question, amendment agreed to.

Clause 8 [Power to modify legislation]:

Lord Lucas moved Amendment No. 4: Page 9, line 15, at end insert— ("( ) The Secretary of State shall maintain at a specified office and a specified site on the internet a list of all orders made under this section.").

The noble Lord said: My Lords, the purpose of this amendment is to continue a discussion which we had at the Committee stage concerning all the regulations that are to be made under Clause 8. They will be many and various and will be made at different times, by different departments, on different bases and will concern different problems. Over the course of time it will be difficult for anyone wishing to use electronic signatures to know quite where the legislation is as regards their acceptability.

In Committee we discussed various ways in which this issue might be addressed. Those were not acceptable. This amendment is an attempt to look at the problem in a different way and to make sure that the information and the legislation on the use of electronic signatures are easily and consistently obtainable by anyone needing to know it. I beg to move.

Lord McIntosh of Haringey

My Lords, I am grateful to the noble Lord, Lord Lucas, for giving me the opportunity to explain the Government's plans for publicising the use of Clause 8.

First, I remind the House that my honourable friend Patricia Hewitt has deposited in the House Library a memorandum, prepared by the Cabinet Office's Central IT Unit, giving more detail—indeed, a great deal more detail—on how we will use this power. The Cabinet Office already publishes six-monthly reports, not only to Parliament but also on the web, on our progress towards information age government. That report is likely to be the appropriate vehicle for reporting on progress in using Clause 8 and, together with individual departments' targeted publicity on legislative changes, would achieve the objective of the noble Lord's amendment.

The Government have already announced their intention to use Clause 8 to make changes to the Companies Act and to facilitate electronic conveyancing. We will shortly be publishing further details on our priorities for using Clause 8.I should add that whether or not Clause 8 has been used in a particular area will not be the only indication of whether electronic means are permitted. Where the only requirement is for a "signature", Clause 7, which will come into force two months after Royal Assent, will put it beyond doubt that electronic signatures are admissible. In some cases, existing legislation may already allow electronic means. Alternatively, the use of electronic means may be authorised or facilitated by new primary legislation or by secondary legislation made under powers conferred by existing primary legislation.

Although Clause 8 can apply to future legislation, made after this Bill becomes law, I expect that future legislation will often provide for electronic means. So the important thing will be for people to check an up-to-date copy of the relevant legislation, possibly as amended by what will be the Electronic Communications Act, rather than to know whether or not Clause 8 has been applied in a particular case.

In any case, secondary legislation is already available on a website maintained by Her Majesty's Stationery Office (www.legislation.hmso.gov.uk) which enables details of any future orders made under Clause 8 to be readily found. I understand that this has been checked within the past 24 hours and that it is necessary only to access that website and, to use the "natural language" search so as to find, for example, statutory instruments made under Section 8 of what will be the Electronic Communications Act 2000. I hope that this clarification will persuade the noble Lord to withdraw his amendment.

3.30 p.m.

Lord Lucas

My Lords, I preferred my own simpler and more straightforward way of going about this; nevertheless I shall give in on the argument and accept that the Government will have their way. I hope that in this matter electronic government is rather more effective than it has been in my request for responses to my Written Questions by e-mail. I still cannot consistently obtain them in that form some three years after making my initial request.

Although I share the Minister's hopes that this will form an effective part of electronic government, we shall have to wait and see. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Lucas moved Amendment No. 5: After Clause 8, insert the following new clause— VALIDATION OF ELECTRONIC SIGNATURE (" .An order under section 8 may not require that an electronic signature may only be validated by a cryptography service provider registered under the provisions of Part I of this Act; nor may any government department or agency make any such stipulation in any contract or document.").

The noble Lord said: My Lords, I had intended to speak to this amendment with Amendment No. 2, which failed to appear. To an extent both amendments address the same question.

The Minister said in Committee that the Government have no intention of licensing, approving or in any way signing up to other countries' systems for registration. However, the reality is that other countries, in particular the United States, will put in place their own forms of registration. If we do not accept those forms, we shall force companies to register under every system in the world, including ours, in order to be on side of the domestic legislation.

The Government will need to take decisions as to which forms of overseas registration they will accept for the purposes of regulations made under the provisions of Clause 8. When they have done that, they should not then declare that only UK forms of registration are acceptable under particular circumstances set out in UK legislation. We should aim for as simple and usable a world-wide system of registration as we can achieve. The Government will need to participate in that. I hope that the Minister will confirm that the Government have had further thoughts on the matter. I beg to move.

Baroness Buscombe

My Lords, I rise in support of my noble friend Lord Lucas to say only that this matter was discussed at great length in Committee. I feel that it is important that the Minister should clarify what will happen when companies wish to register to set up and do business in this country. Will they be burdened with the extra costs and time needed to reregister each time they establish operations in the United Kingdom? Without clarification on this point, we shall put in place a hindrance as regards the development of e-commerce. That would go against the Government's declaration that the UK is the best place in the world as regards the promotion of e-commerce.

Lord McIntosh of Haringey

My Lords, I am in some difficulty because, in referring back to Amendment No. 2, the noble Lord, Lord Lucas, neglected to speak to his Amendment No. 5. For that reason, I shall need to return to briefing notes on Amendment No. 2 which I had already discarded when it was not moved. I am, however, happy to do that. But before I do so, perhaps I may say a few words about the question of whether Clause 7 is too restrictive, which was debated at some length in Grand Committee. I should like to make some general remarks about how the Bill deals with electronic signatures.

Various organisations have asked the Government to consider whether Clause 7 is drafted too restrictively and could have the effect of excluding certain certificates and certain kinds of signature from admissibility. The first point to make—this is relevant to both Amendments Nos. 2 and 5—is that Clause 7 is not intended to prevent anything being admissible in evidence. In the Government's view, it does not have that effect.

The Government's intention is that the clause should apply to a wide category of electronic things so that the courts are able to receive evidence of them and give that evidence the weight it should properly bear. The clause states what is meant by an electronic signature and its certification. Each of these terms is given a pretty wide meaning. The meaning given to the term "electronic signature" is along the same lines as that given in the European Community's Electronic Signatures Directive; it is not identical, but the Bill's definition is, if anything, wider.

The meaning given for "certify" and, by implication, "certification" is wider than is the definition of "certificate" in the directive. Noble Lords will be aware that Clause 7(3) has already been amended in another place to widen the concept of certification in the Bill. In particular, a certificate does not have to be seen in isolation. In considering whether the subject matter of a certificate is a valid means of establishing authenticity or integrity—for example, when a witness is required to confirm an electronic signature—other factors may be considered as well.

The Government have been asked whether the only certificates which are admissible are those which say, for example, "I confirm that this signature belongs to Andrew McIntosh", or "I confirm that this means of producing signatures is a valid means of establishing the authenticity of the communication". The answer is "No". Subsection (3) of Clause 7 is so drafted that it makes admissible a statement which needs to be added to other evidence to establish authenticity or integrity. For example, the signature service provider might make a general statement in his literature that certificates bearing his logo were a valid means of establishing authenticity.

In drafting Clause 7, the Government have aimed at being as inclusive as possible. We have not invented the terms "electronic signature" or "certification"; these terms were already in use within the industry. The Government's approach has been to avoid focusing too much on the labels "signature" or "certificate". It is immaterial what the parties call the thing what is important is to look at the function it performs. The functions described in Clause 7 are very wide indeed.

Perhaps I may now return to the issues raised by the noble Lord, Lord Lucas, and the noble Baroness, Lady Buscombe, in relation to Amendment No. 2, which states: The Secretary of State may make provision for the recognition of approvals granted under compatible registration procedures in other jurisdictions where he has agreed to recognise such procedures". The point that we seek to make here is that we do not think that, at this stage, bilateral recognition is the right way to move forward. Clearly, advances in electronic signatures and certification are taking place all over the world. The noble Lord, Lord Lucas, mentioned the United States, but we must also consider the European Union and many other regions which are advancing in this area—although we rather think that we are ahead of the game.

Article 7 of the EU directive contemplates three ways in which the certificates from outside the Union may he recognised. Perhaps I may take certificates from outside the Union as exemplars of the international trade consequences of what we are discussing. The first is by a provider in a third country being accredited by a scheme in a member state. The second is by an EU provider guaranteeing the quality of the certificate from a third country provider. The third is through bilateral or EU-level arrangements with third countries. It is the third, the bilateral proposal that was made in Amendment No. 2.

We do not believe that the bilateral approach will be the most common route. We believe that the first and second routes will be the most common, and that this is a market where industry and international standards bodies are increasingly driving the process. There was a debate about UNCITRAL in Grand Committee.

Overseas providers can choose whether or not to seek UK approval. There is nothing to stop them doing so if they believe that UK approval will give them higher status in the market-place. Equally, if they believe that overseas approval gives them the status that they need, there is nothing to stop them trading in the U K on that basis. Since overseas providers will have a choice, we are not imposing a burden on them or on us. We are not requiring anyone to go in for approval procedures which are in advance of their particular needs. What we are doing is providing the basic requirement of all of these provisions; namely, that in law there is a possibility of the recognition, if the courts agree it, of an electronic signature and certification.

This is an occasion where I believe that we are giving the lead in encouraging the market for electronic communications to grow without being over-prescriptive. I fear that the amendments would indeed be over-prescriptive.

Lord Lucas

My Lords, I am grateful to the noble Lord for his explanation, which I shall read with interest. For the present, I beg leave to withdraw the amendment.

Amendment, by leave withdrawn.