HL Deb 25 May 2000 vol 613 cc880-913

11.38 a.m.

Lord Bassam of Brighton

My Lords, I beg to move that the Regulation of Investigatory Powers Bill be now read a second time. I commend the Bill to your Lordships and in doing so take the opportunity to explain the thinking of the Government in bring it forward and, more particularly, their thinking in relation to some of the considerations highlighted in another place.

First, I have seen it said that this is a complicated piece of legislation, the purpose and impact of which is not immediately clear on first reading. However, I can assure noble Lords that the concept behind the Bill is very simple. It regulates six investigatory powers. Five of the powers are used already and the Bill will ensure that that use is regulated in accordance with the requirements of the European Convention on Human Rights.

Although, strictly speaking, the sixth power is new, it arises only as a response to developments in technology. Technology has the potential to limit considerably the capabilities of law enforcement and other agencies in preventing crime. The sixth power in the Bill will go some way towards redressing the balance.

The first power relates to the interception of communications. The Interception of Communications Act 1985 is the current statute on the basis of which law enforcement and intelligence agencies currently are able to intercept communications. It will be apparent to your Lordships that technology has changed significantly since 1985. I believe that it is accepted in all quarters that the existing legislation needs to be updated in order to reflect the current communications technologies and to provide for further potential developments in the years ahead.

At the same time, the update to the legislation is necessary in order to ensure that interception of communications takes place under a regime which is fully compatible with the European Convention on Human Rights. A notable gap in the current provision relates to interception by the state on private networks. In the case of Halford, the European Court found our existing regime to be deficient. The Bill corrects that deficiency.

The second power regulated in the Bill provides for access to communications data. Law enforcement and other agencies routinely use communications data in a variety of investigations. At present, they are handed over voluntarily by service providers under the Data Protection Act. The Bill introduces a new regime which requires the requesting agency to go through a number of checks before it can make a request of a service provider. A subsequent audit of the requests will he carried out under the auspices of the Interception of Communications Commissioner, who will report annually to the Prime Minister.

Some people have said that the acquisition of communications data is as intrusive in nature as the interception of communications. I do not accept that. The vast bulk of communications data is of a routine and low level nature, such as who phoned who, when, where and for how long. As such, that is far less intrusive than listening to the contents of a phone call between two parties. There are safeguards in place for the accessing of communications data but they are not as stringent as those relating to interception because the invasion of privacy is not as great.

The third power regulated by the Bill is called "intrusive surveillance". This power is very similar to the existing arrangements for interference with property, covered in the Police Act 1997 and the Intelligence Services Act 1994. Under those Acts, where agencies wish to place a device in someone's home in order to listen to a conversation, they must seek authorisation from a Secretary of State or prior approval from a surveillance commissioner, as appropriate. However, the requirement for them to do so is based entirely on their need to interfere with property in order to place the device. We consider that in certain cases where there is no need to interfere with property, the intrusion into privacy will be as great; for example, where the Prison Service consents to the placing of a bug in a prisoner's cell. Another example may be where a device is used from outside which consistently provides the same quality and detail of product as could be obtained from inside. In those circumstances, we believe that stringent tests should apply before these techniques can be used. The Bill provides for that, and the tests are the same as those in the Police Act 1997 or Intelligence Services Act 1994.

The fourth power regulated by the Bill is called "directed surveillance". Whereas, typically, intrusive surveillance will involve placing a device in someone's house or car, directed surveillance will involve following an individual through the course of his daily life. In so far as much of this would not take place in private but in places where others have access, the invasion of privacy would seem less significant. None the less, it is still a significant intrusion and one that should be authorised where it is planned in advance. It should also be subject to oversight by a judicial figure. That is provided for by the Bill and we believe that it is required by the European Convention on Human Rights.

These powers do not only affect law enforcement agencies in their pursuit of criminals; the Bill also regulates the use of covert surveillance by all public authorities. A beneficial side-effect of the Bill has been the public identification of all the agencies which use this technique in order to ensure that surveillance is regulated and controlled to the same standard across all public authorities.

The fifth power regulated by the Bill is the use of covert sources. More commonly, this technique is described as "the use of agents or informants". Tasking an informant to report back to a police officer on the intentions or habits of a particular individual represents an invasion into privacy. We recognise that fact. For that reason, the Bill provides strict regulation of this type of activity. It must be authorised in advance, records must be kept, and it must be subject to judicial oversight. As with directed surveillance, these activities happen now. Everyone expects them to happen in the interests of preventing crime, among other purposes, and the Bill simply ensures that they continue to happen in regulated circumstances after the Human Rights Act comes into force on 2nd October.

I have described five powers in the Bill, none of which is new but which nevertheless should be properly regulated to ensure compliance with the European Convention on Human Rights. That is what the Bill will achieve.

I described the sixth power as the only new power in the Bill. Even this—the power to demand that data be decrypted—is simply a necessary response to new technologies. In simple terms, a wide variety of situations exist under which at present law enforcement and other agencies can acquire data. That may be through the interception of communications; it may be through a production order under the Police and Criminal Evidence Act; or it may be because an individual has wandered into a police station and handed over a floppy disk. In all such cases, we would expect the person to whom the data were handed to be able to read them. In its various guises, the current law provides for that. However, the development and marketing of encryption technologies means that the recipients of those data may not be able to read them in future. The Bill provides them with a power to demand that the data be decrypted.

I have outlined the six powers which are regulated by the Bill. In so far as they are not new powers, and in so far as the main aims are to ensure that the powers are used in a way that is compatible with convention rights, I hope that the Bill will be entirely welcome to this House. Further, support for the second aim of ensuring that law enforcement powers are updated in respect of modern technology must also be shared across the Floor of the House. Those are the two objectives of the Bill: that the six powers in question should be used in a way that is compatible with the convention and that they should be available to cope with developments in modern technology.

I know that there are no disagreements in principle as to the desirability of providing laws which meet those twin objectives. However, questions have been raised about the particular route that we have chosen in the Bill, and I should like now to mention briefly one or two issues that have arisen in respect of the Bill as it has been brought forward from another place.

In the most recent debates in another place, three particular concerns were highlighted. I shall deal with each of them in turn. The first was that the Bill does not give law enforcement the powers that it needs. I cannot accept that suggestion. The reality is that the Bill updates the power of interception to take account of technological advancement; it puts other intrusive investigative techniques on a comprehensive statutory footing for the first time; and it gives law enforcement new powers to help to fight the threat posed by the criminal use of encryption.

We maintain that the powers must be properly regulated—the Bill does that—without unduly tying law enforcement agencies' hands. Without the measures, and even if the Bill is subject to delay, there will be a significant impact on the ability of law enforcement and other agencies to combat crime and other menaces.

Secondly, concerns were expressed in another place about the potential impact of the Bill on the development of e-commerce in the UK. Our goal is to make this country the best and safest place in the world in which to carry out e-commerce. I know that industry, too, wants a secure environment in which to operate. We are taking a lead in updating our laws for the digital age. The Electronic Communications Bill, which, it is hoped, is finishing its parliamentary stages in another place today, will help to create further trust in the use of new technologies. The Regulation of Investigatory Powers Bill complements that. We do not want to see the burgeoning e-commerce market overrun by criminals against whom law enforcement agencies find themselves effectively powerless. So, in driving forward the e-commerce revolution, we need to ensure that law enforcement powers are similarly updated. That is precisely what the Bill does.

I can state, unequivocally, that we have no intention of placing unreasonable burdens on industry. We recognise that some parts of industry have concerns about parts of the Bill; for example, Clause 12 and the Internet industry. There are significant questions of costs here which we recognise. My colleagues in another place were at pains to point out how the interception regime will simply not work without the co-operation of industry. But it is in no-one's interests to force businesses overseas; so there can be no point in imposing unreasonable requirements on industry. None the less, the desire to ensure that new communication networks can be intercepted is an important one and reflects policy that has been in existence for many years. We have offered a number of reassurances on the implementation of Clause 12. The Bill was amended in another place to ensure that the order under Clause 12 should be subject to affirmative resolution.

We have published a report, which is available on the Home Office website, discussing the details and potential costs involved in creating interception facilities on the Internet. We are consulting with the relevant industry players on these matters. These are detailed and sometimes technical matters which will change with time. They are properly the subject of subordinate legislation. This subordinate legislation will be subject to the approval of Parliament.

The final area of concern in another place focused on the offence at Clause 49 of the Bill. This is the offence of failing to comply with a decryption notice. There are suggestions, supported by an opinion obtained by Justice, that the offence may not be ECHR compatible. We take those concerns very seriously, and have considered them. At various stages in another place, we reiterated why we believe that the offence is satisfactory as expressed. In particular, we took issue with the suggestion that the offence reverses the burden of proof. It has also been suggested that individuals can be locked up for two years for forgetting a password. We do not believe that that is likely. We have set out in detail in another place the reasons why we do not believe that it will happen. None the less, we welcome continued debate on how the construction of the offence might be improved.

There will be other matters which no doubt your Lordships will want to question and probe, perhaps today and certainly when we consider the Bill in detail in Committee. In my remarks today, I have sought to set out what the Bill aims to do in terms of ensuring compliance with the European Convention on Human Rights and to ensure that the armoury of law enforcement is equipped to deal with modern and future technologies. I have also addressed some of the points which were of a more contentious nature in another place, particularly in respect of the Internet industry. Here, the Government are acutely aware of the need to minimise any potential impact of this Bill and to foster the prospects for e-commerce in this country. We have taken some steps in amending the Bill and in offering reassurances in another place. We remain willing to take further steps should they be identified and compatible with the overall objective. That said, I believe that the Bill, in its current state, represents the best balance that can be struck between the requirements of law enforcement, the requirements of the rights of the individual, and the requirements of industry.

It would be remiss of me, at this stage, not to thank the Select Committee on Delegated Powers and Deregulation for the rapid way in which it has come forward with a close reading of the text of our Bill. We are extremely grateful to that committee for considering the Bill so swiftly. We shall give our considered response in Committee.

That committee made two recommendations to date, both of which I welcome. The first recommendation asks that we tighten up the arrangements for adding to the purposes for which various investigatory powers can be used. It is worth putting on record today that there may be something we can do in response to that clear recommendation. Certainly, we have always thought that the powers would be limited in practice by the Human Rights Act. If it seems better to this House to reflect that limitation on the face of the Bill, I see little difficulty with that.

In its second recommendation, the committee admitted that that raises rather more complex issues. Our intention is to table a schedule listing public authorities which can conduct investigations under Part II of the Bill. I believe that that will go a long way towards meeting the concerns of the committee.

Having reflected briefly on the commentary of that committee, I commend the Bill to your Lordships' House—

Lord Campbell of Alloway

My Lords, before the noble Lords sits down, perhaps I may ask a brief question. Where a reasoned disagreement arises as to whether there is a breach of the European Convention on Human Rights in a Bill such as this—as happened on a previous Bill—will the Minister on this occasion disclose the substance of the advice and the reasoning on which the Government rely? Will he, in effect, waive his entitlement not to disclose? In such a situation, if we continue without the reasoned argument, we shall waste a lot of time.

Lord Bassam of Brighton

My Lords, I am grateful to the noble Lord for his question. It is customary for Ministers to discuss and debate matters relating to human rights and human rights conventions during the passage of legislation. That is the course which has been adopted in the past. I see no real reason to depart from that practice in future. I commend the Bill to the House.

Moved, That the Bill be now read a second time.—(Lord Bassam of Brighton.)

11.57 am.

Lord Cope of Berkeley

My Lords, the Minister has set out the general purpose of the Bill and the necessity for it, with which I believe we all agree. As far as I know, those outside who are concerned in these matters also agree with the fundamental purposes which the Bill sets out to achieve.

It is, therefore, surprising that the Bill has generated vociferous opposition from an extremely wide spread of commentators: from industry, human rights groups and the media. We talk about the rapid growth of the number of e-mails, and so forth; the Bill has generated a huge amount of "e-traffic", almost all hostile to one aspect or another of the Bill. The problem is the way in which the Government have chosen to frame the Bill in certain respects, to which the Minister referred briefly.

In some respects the Bill seems weak. We shall propose amendments to toughen it up. In other respects it is worryingly vague and open-ended. We all accept the fantastic speed with which electronic communications have developed and are developing, even as we speak. That makes it difficult for the Government to live up to the aims of the Bill.

Three aims lie behind the Bill: to catch criminals and terrorists and prosecute them successfully; to preserve our human rights—both as outlined in the convention and the new Act—and our traditional freedoms; and, at the same time, to ensure that Britain can remain competitive in the new electronic age. These matters are difficult to balance and combine, but each is important. The Government seem sometimes to understand that it is clearly of key importance to our country that our businesses remain competitive. That applies not only to new electronic businesses but to all businesses. Every business in the land is affected.

Similarly, human rights have been much emphasised in recent debates. But, in practice, this Bill also somewhat threatens our traditional freedoms, as well as introducing the new tribunal and the new commission, and so on. Just as business takes advantage of new electronic possibilities, so do criminals and terrorists, and new possibilities have opened up for crime just as they have for business. It is, of course, important to combat them. International crime, however, requires international solutions. We shall be pressing the Government about what other countries are doing and how what they are doing compares with this Bill, because all countries share the same problems.

The Home Secretary boasted in another place that, as a result of this Bill and others, the United Kingdom is now ahead of Europe in e-commerce enforcement, without seemingly realising that regulation kills business and is in danger of driving it overseas. This country must not become the one where electronic communications are regulated more officiously arid more tightly than anywhere else. It is not to our benefit. New business, and a lot of old business, will simply go overseas, which is now very easy to achieve in the electronics sphere.

For economic reasons, as well as for our human rights and freedoms, we all want companies and individuals to be able to communicate and conduct their business in confidence, in the security of their communications. Of course, we have all accepted for many years that telephones should be able to be tapped, with warrants and safeguards, by those whom we charge with protecting us from crime, terrorism and spies. But, of course, we want the tapping to be a controlled affair, and the Bill improves that in some respects. However, the problem is that it is very difficult to achieve that with electronic communications that are so complicated. There are some very worrying features of the Bill in this respect.

The Minister said that the Bill gives the agencies the powers that they need. It does not, however, give the National Criminal Investigation Service the power that it seeks to be able to request a judicial warrant to search for a cryptographic key. I do not understand why that is refused. The Minister will no doubt be able to explain it in Committee, if not today.

In some respects, the Bill is very open-ended, and the powers that it seeks are not properly defined. The Minister rightly paid tribute to the Select Committee on Delegated Powers and Deregulation and its prompt consideration of the Bill. The Clerk to the committee was kind enough to send me a copy of her letter to the Minister, setting out the committee's views so far. They are important, and I was glad to hear the Minister say that he believes progress will be made on the lines suggested by the committee. Perhaps I may quote from the letter so that other noble Lords will understand the strength of view expressed by this very important committee. The letter states: There are four provisions in the bill which authorise surveillance or other action for specified purposes but allow the list of purposes to be extended by subordinate legislation". The four clauses are then set out: The scope of these significant investigatory powers is thus not determined by the bill, and so by the decision of Parliament, but can be extended to 'any purpose' specified by an order made by the Secretary of State, subject to negative procedure—which is clearly inappropriate. The Committee can see no justification for the use of language which is apparently at large but which is intended to be limited in practice by the Human Rights Act. In its view, if these powers are to remain in the Bill they should be explicitly limited on the face of the bill to the protection of morals and the protection of the rights and freedom of others. They should also be made subject to the affirmative resolution procedure". That is obviously an important matter, to which we must return.

As the Minister said, there is also a second group of powers which raises more difficult issues, to which the committee also drew attention. He described them briefly to the House. The point is that the powers in the three clauses referred to here are conferred on various public authorities, and the Bill lists the authorities which are to be able to exercise the powers but allows that list to be added to. The committee pointed out that during the passage of the Bill through another place it became apparent that as many as 32 public authorities may be added to the current list of only seven on the face of the Bill.

The letter continues: The Committee considers this delegation, in an area which touches on the rights of the individual, inappropriate. In its view the bill should be amended to list all the public authorities which the Government wishes to have the power, and any amendment should be limited to changes made necessary 'because structures within an authority may change'", and the order may require change for that reason. The committee also said that that should be subject to affirmative resolution, with which I agree. These are important observations, to which we shall return, as the Minister said.

It is significant that Clause 6 of the Bill contains another list of agencies able to seek interception warrants, but that does not include the Benefits Agency. We know that there is massive fraud involving benefits, sometimes international and highly organised. There is in today's newspapers a reference to a new Audit Commission report on fraud of this character, which outlines some very alarming figures. I have not yet had an opportunity to study that report. It seems to us that the Benefits Agency ought to be able to seek warrants to pursue this enormous amount of fraud, with similar safeguards to those provided for the other authorities. There are clearly points of principle, as well as legislative drafting points, which lie behind those.

There are also some fundamental practical difficulties about intercepting and studying e-mail and such traffic. The Government do not seem to have wholly solved the problem. The problem begins with the fact that e-mail traffic goes in penny packets through a wide variety of complex routes chosen automatically by the system, which can vary enormously in the middle of a single e-mail message. In addition, Internet service providers come in all sizes and of all different characters, and British residents can, of course, use overseas service providers if they wish. There is a very instructive report from the Smith Group about all these aspects.

The Government seem to be proposing that all email should be monitored, so that the ones which they need to see can be selected. That is not, of course, to follow the analogy of telephone interception of the traditional kind, where the warrant is limited to a single person or telephone calls from a single telephone. Quite apart from apparently wanting an awful lot of information, they also want to obtain it primarily at the expense of the Internet service providers, although the Government generously say that they will make a contribution, as yet unspecified. Nothing is specified in this part of the Bill. The Minister used honeyed words about Clause 12 and told us that consultations were proceeding. But this is the law we are trying to agree here and it is difficult for us to give blanket powers such as those suggested in the Bill and expect the Government to settle it all later.

In relation to paying for what is required to intercept e-mail, let us turn the argument around. Let us imagine that the Government said, "We will pay for the new equipment to work these controls, but we will impose a tax on independent Internet service providers as a contribution towards that expense". In that way the unlimited part of the bill—we have no idea how large it will be—would fall to the Government who are to make the decisions on what is to be done and therefore what the cost will be. The drafting of the Bill produces a sloppy piece of tax legislation. If the Chancellor of the Exchequer had introduced this as a Finance Bill—though we in this House would not be given the opportunity to examine it—he would in effect be saying, "We want permission to send out tax demands of unspecified amounts to Internet service providers. They will not be too large because we aim to make a contribution, but they will be considerable". Another place would not feel that that was a satisfactory piece of tax legislation, but that is what we are asked to consider in this Bill. The danger remains that if the bill is too large, the services will be bought from overseas in order to avoid paying this stealth tax.

The Government have not yet found a solution to that problem and instead are asking for these massive, open-ended powers. But both Parliament and the industry need to know much more about what the Government intend; about what it will cost and who will pay the bill. Parliament can then decide whether or not to give the Government these powers and business can decide whether or not it wants to stay in this country.

Another problem arises which the Bill does not seem to tackle; that is, dial-through fraud. That takes place when somebody rings into a private system, usually a free line, and then uses that system to make their own calls, often to overseas numbers. That way they obtain their calls free, or at least at the expense of the owners of the private branch exchanges. That came to public notice with the recent case of Morgan v. DPP, which could not be pursued under existing law. I understand that there is a possibility of amendments being made to this Bill, which would be apt, to cover that situation and enable dial-through fraud to be successfully prosecuted. It will be helpful if the Minister can tell us, if not today, later, whether such an amendment is to be proposed.

Part III involves encryption. This is the hot potato that the DTI dropped from the Electronic Communications Bill and which the Home Office picked up. The Home Office is used to picking up hot potatoes and probably hardly blinked when it did so. Here the Government are saying, in effect, "We cannot define what we want, so we will criminalise everybody who cannot or will not help with the key to the encryption and make them prove a negative to get out of it". But they seem to want the keys to everything and in the process be able to give them to whoever they choose within the various agencies. That gives rise to concerns about confidentiality and security. There is also a strong suspicion that the Government are trying to go back to the idea of key escrow by means of intimidation. I hope that the Minister is in a position to contradict that, preferably today.

The level of punishment for forgetting a key is also a point of concern. The Minister mentioned that the penalty can be up to two years in prison. For the genuinely forgetful, that is a heavy penalty and the Minister said it would not be used. But for the criminal who faces a much worse sentence if his encrypted file is read and his nefarious doings come to light, then it may be a light sentence in comparison. We shall be seeking to toughen the offence by introducing the element of intent, which the courts are constantly trying to judge in other contexts. That will enable a commensurate sentence to be imposed so that criminals will not have such an incentive to refuse the key.

A further problem in relation to that part of the Bill arises from the fact that the person on whom the warrant is served cannot tell anybody else. That may give rise to claims from overseas for breach of contract. It is also likely to lead to overseas companies avoiding using UK services. Those are all complications which we will need to explore.

We all want to support the police, Customs and Excise, the security and intelligence services and the other agencies. We rejoice when they succeed in catching drug dealers, paedophiles and terrorists, particularly the big ones. I believe that the techniques covered by the Bill are essential for them to do their work of protecting our country and our society. But the safeguards are essential to protect our freedoms and to allow our businesses to compete and flourish. It is important therefore to have a sound and balanced Bill. This Bill, for the reasons I have tried to set out, seems to be a half-cooked piece of legislation on which a great deal of work remains to be done. I am grateful to the Minister for his willingness, which he expressed at the end of his remarks, to listen to what will be said in the course of our more detailed deliberations. But if the Bill is to become acceptable, then a great deal of that work will have to be done when the Bill passes through your Lordships' House.

12.18 p.m.

Lord McNally

My Lords, the noble Lord. Lord Cope of Berkeley, referred to the report of the Select Committee on Delegated Powers and Deregulation. Like him, I received a copy this morning and, apart from the comments he made, it may be better to leave proper deliberation of it to a later stage of the Bill. However, the report seems to echo some of the concerns made by my honourable friends in another place in relation to the wide-ranging nature of the secondary legislation and delegated powers contained in this Bill. It is certainly a matter to which we will have to return.

As the noble Lord, Lord Cope, indicated, three elements of this Bill need to be examined. There is a need to make sure that the powers given to the police and security services match the advances in technology and their use in crime. There is also the need to ensure that our regulatory systems allow us to reap the full benefits of e-commerce to our economy, as well as the need to protect civil liberties.

Given some of the reaction to the Bill to which the noble Lord, Lord Cope, referred, perhaps I may immediately assure the Minister that I see him as a most unlikely candidate for "Big Brother". Nevertheless, as the noble Lord, Lord Cope, indicated, although the Minister said that this Bill is a simple and updating measure, it involves many issues of a fundamental nature that I believe it is the duty of this House to examine most thoroughly. The Bill was thoroughly examined in another place where my honourable friend Mr Simon Hughes made it clear that we generally welcome the Bill as a step forward.

A certain amount of interception of communications and surveillance has always been carried out by the state, but much of it has been outside a clear and comprehensible legal framework. The Bill establishes such a framework and places it within the context of the convention on human rights. If we do not have this Bill, or something like it, this would in no way stop surveillance by the state but would mean that the legal framework for it would remain inadequate to the detriment of our citizens' human rights. That is our basic welcome for the Bill.

My noble friend Lady Harris, with her considerable experience as chairman of a police authority, will address some of the police matters covered by the Bill. As something of an outsider in these matters, what struck me was the provision for five different commissioners to regulate various parts of the Bill; for example, the surveillance commissioner, the interception commissioner, the covert investigations commissioner, the security services commissioner and the intelligence services commissioner. I am sure that they will all do an excellent job, but I wonder whether some simplification or amalgamation of roles would be possible. There seem to be an awful lot of commissioners.

The other question on policing that I shall simply raise at this stage is whether the police structure is adequate to meet the new challenges; for example, how many police forces have their own computer crime units? I understand that the High Tech Crime Policy Unit is financed by means of all the police forces chipping in. That is not always the best recipe for ensuring that a body is adequately funded. One of the criticisms made is that the police are still too intent on shoring up intervention technology which is doomed to failure because, if not this generation of technology, the next one will make such intervention well nigh impossible.

We shall return to the policing matters, but let no one be in any doubt about this: we want a Bill that is effective in giving the police and the security services the necessary powers to fight crime, terrorism, drug and pornography trafficking, as well to deal with the other criminal and security threats to the country. However, we want such powers to be within a context that does not hamper the legitimate exploitation of the full economic benefits of the new technologies.

I have just returned from a visit to Japan, where I looked at the electronic industries and some of the other developments in that country. All I can say to the House is that I have seen the future—and it works with awesome efficiency. The convergence of telephone and television technology will provide a whole range of new products that will have immense benefit, both economic and social; but, as always with these developments, this will also provide an immense capacity for the criminal to find ways to make mischief and cause damage.

It may be interesting for noble Lords to know something about the context in which we are working. It is estimated that it took 40 years from initial development for electricity, motors and telephones to reach market saturation; it took 20 years for radio and television to reach that point; and it has been guessed that the Internet will achieve the same 90 per cent penetration in our society within the next five to 10 years. I have some experience of television legislation. It seemed to me that we were always legislating for what had just happened in the broadcasting industry rather than for what would happen next. I worry about this and shall want to examine, with the assistance of outside advice, whether we are making some of the same errors in approaching the new technologies.

In yesterday's Financial Times, Professor Jim Norton, who is head of e-commerce at the Institute of Directors, described this legislation as, "a classic own goal" that would undermine the Government's aim of making Britain a centre for e-commerce. He also said: This is a clear case of the futility of government treating Internet policy as a national issue when what is needed is international agreement— a point also made by the noble Lord, Lord Cope, in his remarks. Indeed, I also agree with the noble Lord that the e-mail traffic on this Bill has been fairly substantial over the past few days.

The European Encryption Working Group made the following point to me: We are concerned … that the Bill as written could lead to the imposition of mandatory technical and design requirements on communications services … we urge that the Bill be amended to state explicitly that the Home Secretary does not have the authority to impose design and technical requirements upon communications systems and to place the burden of proving possession of the encryption key on the prosecution". Again, the noble Lord, Lord Cope, referred to such matters. Yet another organisation from the industry, British Music Rights, has e-mailed me with the following comment: Private enforcement bodies are often at the forefront of detection of copyright infringement. They have a vested interest in doing so and devote much effort and their own resource to identifying criminal activity in this area. At a time when the Patent Office has been consulting … for the improvement of criminal penalties and powers to pursue copyright infringement it would be an irony if the RIP Bill was a set back to those private industries which work on behalf of rightsowners". I have just one further quotation to put before the House. Taking up the point about costs, Vodafone says that it is "essential" that, the Government takes into account the views of industry in relation to establishing what a reasonable intercept capability is and how much it should cost". It adds that the Government must make a strong commitment in the Bill to consultation with the industry about, the amount of the contribution to be made by the Government towards these costs". Bearing in mind the amount of money that Vodafone paid for its licence, I think that the Government have a vested interest in ensuring that it is able to pay all its debts in these matters.

However, a serious point arises from this issue. On the matter of e-commerce we have almost a national consensus that we want to succeed in this area. There is a kind of "Rubik cube" facing the Government; in other words, where they are trying to solve one problem, they may possibly be creating problems in other parts of the industry. We do not envy the Minister in finding the solution to this "Rubik cube", but, as ever, we on these Benches are anxious to help him in that direction.

The next leg of the examination that lies ahead of us comprises civil liberties concerns. As the Minister said, this matter also has its "Rubik cube" aspect. On the one hand, he may be accused of taking inadequate powers to address the criminal threats posed by the new technologies; on the other hand, he may be accused of adopting an over-intrusive approach. As one would expect, we on these Benches will examine closely the civil liberties aspect of the Bill. We shall consider carefully where the Bill needs to be strengthened and tightened up in that regard. The briefing I have received from Liberty very much encapsulates the worries of those involved with civil liberties. Liberty states that, the clandestine nature of the operations regulated by the legislation heightens the care needed to ensure that necessary official activities impinge as little as possible on citizens' rights; against that background, the current criteria for authorising interception and surveillance are objectionably vague and overbroad; the safeguards and scrutiny arrangements the law provides are insufficient to ensure that the interference with individual rights is strictly proportionate to the legitimate needs of the agencies concerned". Like my honourable friends in another place, Liberty argues for much wider "prior judicial sanction" to be included in the Bill and for, the individual's right to complain of an infringement of rights", not to be reduced to "a matter of chance". Liberty expresses concern about—the noble Lord, Lord Cope, referred to this— the creation of a 'tipping off offence". Liberty also expresses concern about the risk of the Bill, reversnig the burden of proof". I do not doubt in any way the Government's broad commitment to civil rights. I do not take a "holier than thou" approach to this matter. However, when such legislation comes before the Houses of Parliament, and particularly before this House where noble Lords have a wide range of experience of the matters we are discussing, we have a firm duty to ensure that it is examined extremely thoroughly.

I make a slightly tangential point, but one which may increase the e-mail traffic; namely, the massive imbalance of power between opposition parties and the Government when dealing with such a complex matter. I am extremely grateful to various outside bodies and lobbying groups which have sent me briefing material. Groups within industry and civil rights groups are examining the Bill extremely carefully. I hope that as we approach the Committee stage they will continue to give us the benefit of their advice and experience. I do not want to score political points, rather to ensure that the Bill is examined thoroughly both from the point of view of its implications for human rights and civil rights and from the point of view of its economic impact.

Liberty encapsulates that point in its brief which states: The subject-matter of this Bill raises the challenge of striking the proper balance in a democracy between, on the one side, the protection of society from real threats to its integrity and, on the other, the need to preserve the very values that make a democratic society worth protecting: the rule of law, respect for individual liberty, and abhorrence of arbitrary or unjustified interference with citizens rights". We shall approach the Committee stage with those sentiments in mind.

The speed with which the new technologies converge and become more widely available lends urgency to our deliberations. However, I agree with the noble Lord, Lord Cope, that it would be foolish of us to construct simply national standards for what everyone acknowledges to be a global market-place. Therefore, we shall want to consider how our measures comply, or compare, with those of other jurisdictions, not least those of our closest competitors.

Although this matter is urgent, the House has a responsibility not to be "bounced" into accepting a pig in a poke. I give the Minister fair warning that he faces a thorough Committee stage. I am sure that his ministerial colleagues envy him as he seems to be allocated all the "fun" Bills to deal with. I understand that we shall consider the Bill shortly after we return from the Recess. As both the noble Lord, Lord Cope, and I have indicated, we intend to examine the Bill thoroughly but constructively.

12.36 p.m.

Baroness Thornton

My Lords, I congratulate my noble friend the Minister on an excellent explanation of the Bill.

I am concerned primarily about those parts of the Bill which address the investigation of electronic data protection by encryption. My concern is centred around the protection of children and the opportunities which new technology offers to those who seek to harm them.

It is important at the outset not to exaggerate the dangers to children arising from the Internet. Of course we should emphasise its tremendous potential as an educational tool and as a source of great fun. But, equally, we would fail the public if we did not articulate and reflect the genuine fears that exist.

There is a rising tide of concern among parents about Internet safety for children. I refer to the recent case in Milton Keynes, where a 13 year-old girl turned up to meet someone she had first met and talked to online in a chat room. She believed him to be a 15 year-old boy, only to discover that he was in fact a 47 year-old man who had travelled down from Durham to see her. That case must have sent a shiver down every parent's spine.

Earlier this week there was the case of Kenneth Lockley, who was arrested following what he believed was an attempt to procure sex with a nine year-old girl and who received a derisory prison sentence at the Old Bailey. It was derisory because of the limited options available to the judge in that case.

Then there are the porn sites and the web pages depicting violent or racist images, some of which are illegal in this country, and all of which are grossly offensive and highly unsuitable for children. E-mail is also being abused, both by paedophiles seeking to make contact with children, and by a whole host of rogues and villains seeking to part people from their hard-earned cash.

There is a strong sense that the law is not keeping up with developments. Therefore this Bill is an important and welcome development. It is important that we get it right and that we strike the right balance. With the advent of strong encryption technologies, criminals are being handed a gift; a gift which will help them hide their criminal activities, or conceal the evidence of them. If a paedophile has on his computer, files, e-mail messages, pictures, and so on, which disclose a serious sexual offence against a child, an offence for which he knows he could face a prison term of 10 years or more, in future he will encrypt the lot. Then, if he is investigated by the police, he will simply refuse to hand over the key to decrypt the files. Thus deprived of the evidence of a serious offence, it is entirely possible that the only charge the man might face is for the refusal to hand over the key, an offence for which the maximum sentence—the maximum, mark you—is two years and a fine.

With time off for good behaviour, such a man might spend only a few weeks in prison and then be out again, possibly even applying for, and getting, employment with children in a school or residential care centre. There will be nothing on his record to indicate that he has any history of sexual offences. Why? Because encryption technology will have allowed him effectively to cover his tracks.

Perhaps I may explain this by referring to the Gary Glitter case. If Mr Gary Glitter had encrypted the tawdry contents of his hard-drive and had then refused to hand over the key, the present law could have done nothing about it. Under this legislation, he could have been prosecuted for refusing to hand over his key, fined or perhaps sent to prison. On release from prison or on payment of his fine, he would not be included in any register of sex offenders—and presumably, therefore, he would have been able to go and work with children had he so desired.

I understand the Government's anxiety about being asked to increase the possible sentence for failure to hand over a key to decrypt files. I understand also that one cannot simply jump to conclusions about the kind of material the accused may have been hiding through the use of encryption. It would be quite wrong, for example, to put anyone and everyone who refused to comply with a notice to hand over their decryption key onto the sex offenders' register or List 99. So there is a problem.

Perhaps there is a case for having a new register—a register simply of those people who refuse to hand over their keys to decrypt and who are subsequently successfully prosecuted for that offence. In one sense, a register will be kept anyway as registers are kept of all prosecutions. The issue is who can have access to that information and how.

However, the fact that someone has been using strong encryption software and has deliberately refused to co-operate with a police investigation into what it is concealing is a material fact that many potential employers would like to know. I have in mind, especially, children's organisations, schools and so on, but many other potential employers may take a similar view—for instance, banks, pharmaceutical companies and so on. They should all be able easily to verify whether or not a potential employee has been down this route. Even though it would not in itself be grounds for refusing to offer someone a job, it would at least alert potential employers and cause them to ask questions.

I acknowledge immediately that my main interest in this debate relates to the protection of children. Perhaps we really need a more wide-ranging review of how sexual and other offences might be committed, and are being committed, against children where the Internet and other new technologies play a major part, either in facilitating or executing the crime or in hiding the evidence of it. Perhaps our laws need updating across a broader front; perhaps the police need more resources, as other noble Lords have rightly said; perhaps we need more vigorous public education campaigns. Perhaps we need all of those things.

I am, of course, aware that other countries are taking a different view on this, but other countries do not do many of the things that we do in Britain. I wonder how long the so-called liberal regimes of other countries will survive if they gain a reputation for being the preferred haven for paedophiles, drug dealers and gun runners—a kind of cyber Cayman Islands. We must decide what we think is right and what we think is for the best, and persuade other countries to agree with us and to support us.

I understand also the Government's desire not to frighten off potential investors in our e-economy and to make Britain the best nation in the world in which to do e-business. But surely what businesses and consumers want is a transparent and trusted regime. They do not want the Internet to become synonymous with criminals and shady characters who are a danger to children.

I am absolutely certain that if we sit back and wait for another, and then another, and yet another Internet outrage to happen—and there is plenty of evidence from the USA of what could happen over here—then our inactivity will never be forgiven, and quite rightly. We will end up with a public clamouring for "something to be done", and we will be stampeded into possibly ill-thought out and ill-considered legislative action which would indeed harm potential investors in our e-economy. So it is very important that we get this right; there is a great deal at stake.

While welcoming the Bill, I hope that during its passage through your Lordships' House a balance can be found which addresses these issues.

12.44 p.m.

Lord Lucas

My Lords, this is a Bill which, if it remains as it is, we should not be afraid to destroy. I agree with a great deal of what was said by my noble friend Lord Cope. We can all support many of the purposes and much of the wording set out in the Bill—but rosy-red and vitamin-packed was the apple eaten by Snow White. It is not that there is not a lot of good in this Bill, but that there are some parts of it that we should not swallow—or, if we do swallow them, which will do a good deal of damage to the citizens of this country.

The liberty of the citizen is not something which is dear to this Government—particularly not to the Home Office. Already we have had to "junk" a particularly obnoxious Bill on the mode of trial, and in this Bill we are looking at similar infringements on the liberty of the citizen. We are looking at the reversal of proof in Clause 49; we are looking at effectively giving the Government rather ill-defined and vaguely controlled powers to examine all our communications. In practice, we are, effectively, giving the Government carte blanche to look at anyone they want to, at any time, and, in this electronic age, to discover exactly what they have been up to.

We should rest on principle in these matters. The Bill is not incapable of amendment—we can get to the point where it is acceptable—but if it stays as it is, we should recognise that it is our duty to defend the liberty of the citizen and throw out the Bill at Third Reading.

Having said that, I turn to the first aspect of the Bill on which I wish to concentrate from the other point of view—that is, to ask whether Clause 1 is wide enough. Clause 1 refers to doing something, at any place in the United Kingdom". A "place" is extraordinarily difficult to define for electronic communications purposes. If something is done in France which causes a message to be sent to a computer in the UK, which then causes that computer in the UK to transmit some of the communications passing through it to France, what has been done in the UK? Is that covered by the Bill? If a virus is sent to a satellite which is transmitting communications within the UK or between the UK and other countries, is that action carried out in the UK or in another country?

We need to look at how the powers in the Bill will mesh with similar powers in other countries. We need to ensure that criminals making use of the lack of locality in electronic communications do not find loopholes whereby they can escape the consequences of this Bill and similar legislation elsewhere by carrying out activities from one country to another country, or via another country.

I am also concerned that we are not addressing the practical use of hacking technology for the interception of communications. As has been pointed out by several noble Lords, encryption imposes severe difficulties on law enforcement and intelligence agencies in finding out what is going on. The practical way round that problem is likely to be through hacking technology—for example, by putting viruses in files that end up on other people's computers, thereby causing those computers to act in ways which make it either possible to break the encryption when the computer is seized, or to transmit information over the Internet to other people.

What would happen if I were to put such a virus on a computer in France with the intention that, when the person using that computer activated the virus, it would send an e-mail to the person I was targeting in the UK, resulting in the communications of that person in the UK becoming transparent to me? Are the security forces authorised to do that? Can they be authorised to set loose a programme, which might end up on all kinds of people's computers, in order that it should eventually work its way back to the person targeted? Or, indeed, can the security services work it the other way round and place the virus at the centre of a criminal organisation, with a view to spreading it around to an unknown number of computers within that organisation, which would all then start sending back information to the security services? Will the Bill allow the security services to carry out that kind of action but prevent undesirable organisations doing so?

As to aspects relating to the liberty of the citizen. I think that these will best be dealt with largely in Committee. They are detailed and technical. The areas that concern me most are, first, the question of packet switching. As my noble friend Lord Cope said, in order to access a particular conversation, the technology effectively requires the Government to see everything, and then just pick out the conversation they want. It is not like tapping a telephone line where you know what line is being tapped. It means taking the whole of the traffic on the Internet and, out of that, filtering out the part you want.

In those circumstances, we must have an effective assurance that the Government will look at only the part they are authorised to look at. At the moment it is proposed that this is done electronically; that there are no effective human interventions in that process. It takes very little for someone to add something to a program somewhere in Government Communications Headquarters, or elsewhere in government, and thus breach the rules without any practical hope of detection unless someone, with a right of access, and the skills and knowledge to exercise it, is involved on behalf of the citizen. At present there does not seem to be provision for that in the Bill.

Secondly, we need to look at the area of communications data. At the moment, of course one understands that the police want access to people's telephone bills. The question of who a person has been telephoning, of who has phoned you and when, has been an aspect of detective fiction for as long as I can remember. But this will become much more universal. Looking 10 years ahead, I would expect to be conducting most of my life electronically. Everything that I have done in every aspect of my life will be recorded in communications data. We need to make sure that when someone is getting access to that. they do so in a way which is proper, authorised and consistent with the general liberty of the citizen. I think it is possible that the Bill is drafted correctly in that respect. I do not necessarily share the doubts that have been expressed, but it is something we shall have to look at with great care.

Lastly, we come on to the question of Clause 49. I very much share the concerns expressed by the noble Baroness, Lady Thornton. It is very important that we should recognise how people will seek to use the offence of failing to reveal a key. We need to look at the practical way in which this will work. We need to consider how in practice people keep keys and what should happen if someone does not want to reveal them. How will we prosecute someone for what may be an underlying offence if it is impossible to produce the evidence that there actually is an underlying offence? Again, we are moving into technical and difficult areas, but I think that the Bill's current wording is entirely unacceptable.

We cannot have a situation where the principle of legislation is that someone is guilty until proven innocent. That is not the way we do things in this country. It is not a principle which we should sacrifice in any small part anywhere in our system of legislation. Government work by precedent. Once the precedent is established in one place, it will become accepted in others. This is not a sacrifice of liberty that we should make in favour of the state. The state has to work out ways of dealing with the fact that, as an absolute principle, people in this country are innocent until proven guilty. It is not impossible. It may well require different methods of investigation. It may well require a different approach, which is probably necessary anyway, to dealing with crimes which are covered by encryption.

There is a good deal we can do in Committee to improve the Bill. I hope that the Government will look at it constructively. But if we find ourselves on the final "ping-pong" between this House and another place, or, perhaps even earlier, at Third Reading, with a Bill which amounts to a fundamental infringement of the liberties of the citizen in this country as long established, we should reject it.

12.54 p.m.

Baroness Harris of Richmond

My Lords, this is the first time I have been deeply involved in a Bill in your Lordships' House. I cannot help thinking I should have picked a less technically challenging one, as noble Lords will no doubt soon find out. However, I shall do my best, and explain that my interest which stems from my being a member of the National Crime Squad Service Authority—whose officers, of course, will be dealing with the consequences of the Bill—and also as chair of a police authority whose officers will also be using the powers proposed in the Bill. However, I must assure your Lordships that I speak entirely in my own capacity as a member of your Lordships' House and not as a representative of either of those two bodies.

Last year the Association of Chief Police Officers, the National Crime Squad and HM Customs and Excise issued codes of practice on covert law enforcement techniques in anticipation of the European Convention on Human Rights and the Human Rights Act. The Government also commenced work to create legislation that would place on a legal footing private side telecommunication interceptions and all other covert policing activities in order to be compatible with Article 8(2) of the convention. This states that any interference by a public authority is required to be conducted in accordance with law and in a democratic society.

Let me say, first, that the police service welcomes this legislation which, for the first time, as the Minister said, will regulate covert policing activities. Up to now, of course, these have been governed, but by guidelines and protocols only. The Bill will establish a framework which places them within the context of human rights.

Police officers have always carried out covert surveillance and operations, and interception of communications, and now we have the means by which this can, and must, be properly regulated, as the noble Lord, Lord McNally, reminded us. Police officers will have to be able to state that the surveillance or interception they wish to use must be justified. It must be proportionate, and it must be necessary. As an example, interception might be justified and lawful in cases of large-scale heroin trafficking, but not in small-scale local cannabis dealing between adult friends. Directed surveillance would be justified, however, and lawful to prevent or detect small-scale cannabis dealing between adult friends but would neither be lawful nor justified to determine whether a married person was perhaps conducting an affair. The protection of moral values is not a justified ground. Unfortunately, however, the Secretary of State can add any ground he thinks fit. I hesitate to give your Lordships any examples of what those might be.

Dealing with the "proportionate" example, the intrusiveness of a technique must be commensurate with the evil it is designed to combat. In other words, a sledgehammer must not be used to crack a nut. The necessity principle is applicable only to the most intrusive techniques. However, while the police may be reasonably happy with the proposals in the Bill, there are some concerns which need addressing. One concerns the definition of "prevention of crime" which falls in Parts I and II of the Bill concerning interception, surveillance and human intelligence sources. It is thought that there is too narrow an interpretation of the phrase throughout the Bill in determining the grounds when certain techniques may be used. For example, in Part I, Chapter I, Clause 5(3)(b); Chapter II, Clause 21(2)(b); and Part II, Clause 28(3)(b).

The problem with this restricted definition is that it means that law enforcement agencies would not be able legitimately to use certain techniques in a wide variety of cases. I am advised that, as it stands, the Morgan ruling would prevent police forces from using directed surveillance, tasking informants or obtaining billing data to obtain intelligence about an individual who is suspected of being involved in serious crime, or determining the whereabouts of an absconder who has been charged with an offence and fails to appear in court. It also means that interception could not be used to locate a very dangerous offender who is unlawfully at large. Practically, I am advised, that severely restricts law enforcement's options in tackling crime. It would therefore be enormously helpful if the Minister were able to reassure me on that point and perhaps agree the definition of "prevention of crime" to cover the whole intelligence gathering, investigation and prosecution process. Now is perhaps not the time to offer amendments or suggestions as to how that might be achieved, but I may well come back to it at a later stage.

Perhaps the definition of "intrusive surveillance" might also be considered. Perhaps an appropriate entry in the codes of practice would help in the following situation. A publican whose premises had been broken into on a number of occasions would not be able to consent to the use of covert video within those premises even though everyone within the premises knew that it was there. It is quite possible that the burglary of commercial premises would not meet the "serious" threshold and so the technique would not be available. I note that concern was expressed in the other place about the number of agencies which will use surveillance and covert human intelligence sources—undercover officers, agents, informants and so on—but which are not named either on the face of the Bill or in a schedule. It would be helpful if that point, too, could be considered.

However, the main concern is about Part III of the Bill and encryption. As it stands, serious and organised criminals would prefer to risk a two-year penalty if the encrypted material held would provide evidence of serious criminality—drugs trafficking or paedophilia—for which, if convicted, they would be imprisoned for 10 years to life. The noble Lord, Lord Cope of Berkeley, and the noble Baroness, Lady Thornton, who gave an excellent example of the problem, referred to this point. The penalty provides little deterrent to major criminals, the very ones we want to catch. What will happen to the innocent defendant who will have to prove to the court that he is not lying about having lost or otherwise forgotten his key number? It appears that he can be punished as a criminal for failing to prove that he does not have the information. That is a crazy state of affairs.

It is important to keep a balance and to ensure that we comply with the European Convention on Human Rights. I am sure that that is the Government's intention, but I fear there is imbalance in some areas of the Bill. In particular, I cite the power proposed to be given to the Secretary of State to designate any body that has the right to intervene without coming back to Parliament with legislation. It would be far better to let a judge decide on the merits of the case whether to allow some form of intervention than, as is proposed, the Secretary of State. At least a judge is usually seen to be dispassionate and separated from the Minister. The Minister is part of the executive and is in charge of policing and therefore might be construed as having rather too close an interest in any application for interceptory powers.

Finally, I should like to touch on the issue of costs. It will cost £25 million to set up the GTAC monitoring centre, which may be obsolete fairly quickly because of the speed of technological advances. Would not that money be better spent developing the tools that the police could use for what is known in the trade as "forensic hacking". Not being a "techie" myself, I have no experience of how this would work, but I am assured that it would be a far better way of catching targeted criminals without the need for any physical contact with them.

I hope that the Minister will consider those points. I have no doubt that we shall return to them when we come to discuss the Bill in Committee.

1.3 p.m.

The Earl of Northesk

My Lords, none o us can object to the premise upon which this Bill is based. The state has a duty to protect its citizenry from criminality. In our computer age, the ingenuity of criminal elements—be they organised or not—has been quick to adapt itself to the new technology. To be effective, the defences deployed by the state against these criminal elements have to keep pace. Intelligence gathering is an essential part of the process. It is appropriate that the procedures for information gathering are consolidated and regulated on a statutory basis. Hence this Bill. All good and well, so far.

One does not normally think of legislative drafting as being a riveting read. But this Bill's rites of passage have been so labyrinthine that I have, over time, come to think of it as a good thriller. Its vocabulary—"interception of communications", "covert human intelligence", "surveillance", and so on—is the stuff of spy fiction. Imagine my delight therefore when, in delving into its background. I stumbled upon an article that opened with the sentence: These are exciting times for conspiracy theorists". The inspiration for the article was, the recent mass of revelations about the vast web of covert national security operations in Britain and abroad". Intriguing, my Lords. It seems that there are those who trace the genesis of this Bill back to the security pact of 1947 known as the "Quadripartite", or "United Kingdom-United States" agreement, a text which some refer to as, probably one of the most secret documents in the world". As I understand it, its prime objective is to ensure that all communications throughout the world can be intercepted for the benefit of its signatories. That agreement eventually spawned ENFOPOL, the EU package of proposed legal requirements intended to make telecommunications systems legally interceptible through decryption techniques. The thrust of this policy had been formulated by an organisation known as the International Law Enforcement Telecommunications Seminar—or ILETS—set up by the FBI in 1993. Working firmly behind closed doors, so far as I have been able to understand, it has been instrumental in having its plans adopted as EU policy and enacted into national legislation in a number of countries, notably the Communications Assistance for Law Enforcement Act in the United States.

In fact, following consistent opposition to it under the Finnish presidency of the EU, ENFOPOL has all but died a death. Attempts were made to rekindle its embers by grafting it on to the mutual legal assistance directive. But, in the event, the European Parliament threw out the relevant amendments. One could have hoped this was the end of the matter but, as Joe McNamee, spokesman for the European Internet Service Providers Association, warns: The Council of Ministers can ignore the decision because, technically, it is not a single market issue. Some people desperately want to see this legislation go through and, when you look at the 15 justice ministers who will preside over the resolution, you see that Jack Straw, the man behind the RIP bill, is in the chair". QED, my Lords. As I say, this is the stuff of spy fiction. At risk of seeming facetious, perhaps the Government have in mind a forthcoming sale of the movie rights?

None the less, this background is instructive. It is indicative of the context in which RIP has been conceived— the encroachment of national security agencies on some of the most fundamental of our freedoms, particularly those of privacy and speech. To be fair, the Minister made ample reference to this in his introduction.

All of this would be farcical were it not so serious. And it is serious for a number of reasons. First, more prosaically than I have explained it, the Foundation forInformation Policy Research has observed that: The bill represents the endgame of a policy shambles that has lasted four years, and is one of the outstanding historical failures of civil service policy machinery of the past several decades". There are many aspects to this. The Government have sought to make a virtue of their intention to make the UK the best place in the world for e-commerce. The Minister repeated the mantra again today. I have no complaints about that. The Electronic Communications Bill—irespective of how lukewarm the industry is towards it and irrespective of how limited its effect will in fact be—is a manifestation of that aim. And yet, in their wisdom, the Government are resurrecting the original Part III of that measure, albeit the impression of a watered-down version, on the face of this Bill. Echoing my noble friend Lord Cope, the idiocy of this is that it will place a severe regulatory burden and considerable costs on the e-commerce industry that will stifle its growth. Self-evidently this is antipathetic to the Government's stated intention. A summary of the current position was provided in the Connected supplement of the Daily Telegraph earlier this month: The upshot for a company considering where to base its e-commerce business: Britain is more expensive, with a potentially hostile regulatory regime for one of the most important security technologies, and a tricky legal environment". In the same vein, on 11th May Computer Weekly reported that: UK users have given up on the Government's proposed interception regime and are already moving their IT processing operations abroad to avoid its powers". That is hardly an endorsement of the UK as the best place in the world for e-commerce. What was the Government's response? The Home Office Minister with responsibility for the Bill, Charles Clarke, wrote petulantly to Computer Weekly stating that its reports were "simplistic in the extreme".

To compound matters, as David Banisar, deputy director of Privacy International, has observed, Britain is the only country that thinks it can get ISPs to do its spying. It's crazy. And it and America are the only major western countries trying to increase police power [in this area]. It's the same old alliance we had over key escrow". This is particularly important in the context of the international dimension of this area, to which both my noble friend Lord Cope and the noble Lord, Lord McNally, referred. However, the problem goes deeper than that. The Irish Times has commented that: Unfortunately, law makers in Ireland. Europe and the US are staggeringly e-naive about the effects these new laws … will have on their future. The problem is one of ignorance". For example, one would have thought that by now the Government would have realised that the single biggest barrier to the development of e-commerce from consumers and traders alike revolves around confidence in and trust of the security of transactions online. This applies as much to protections from an over-mighty state as it does from criminal elements. Moreover, as the information revolution marches on, increasingly our lives are lived on the net. As FIPR puts it: The explosive growth of e-commerce, coupled with anticipated high penetration of interactive digital television and third-generation mobile phones, means that the Internet is on the verge of becoming a single conduit carrying comprehensive transaction data, tracing virtually every facet of private life". Under the Bill as drafted and because of the convergence of these technologies, it will be lawful for any public authority to obtain this vast wealth of "communications data" on anyone without a ministerial or judicial warrant. However inadvertently, the Bill sanctions mass domestic surveillance. I make the point in passing that measures such as this are without parallel anywhere outside, of all places, Zimbabwe. This, combined with the scope of the Bill in terms of its inferential endorsement of increasingly sophisticated analytical techniques such as data-mining, triangulation of data, "friendship trees", "traffic analysis" and so forth, has huge implications for the privacy of the individual. Just as significantly, it begs the question of the extent to which the Government understand the needs of the e-commerce industry in respect of trust and confidence.

More specifically, the Government—almost uniquely—do not seem to be able to understand that a major reason for the failure of the key escrow policy was that it can be so easily circumvented. The same is true of vast tracts of this Bill. An essential ingredient of information technology is to develop work-arounds and "patches" to resolve problems. Thus, the Internet community—the noble Lord, Lord McNally, touched on this issue—is already working up counter-measures to the thrust of the Bill's provisions: for example, steganography. A likely result is that, should it be enacted in its current form, it could well have the perverse effect as far as data traffic is concerned of actually reducing rather than increasing interception capability.

Nor does the policy shambles end there. The Minister may recall the exchanges he had with my noble friend Lord Campbell of Alloway during the passage of the Representation of the People Bill. My noble friend argued that there were conflicts between the measure under consideration and the Human Rights and Data Protection Acts. This being so, the integrity of the Section 19 certificate on the face of the Bill, signed off by the noble Lord, was brought into question. Well, I am bound to say that this Bill poses many of the same problems.

The Minister has already said that he is acutely aware of the various human rights concerns that have been raised. He also made reference to the preliminary decisions of the Select Committee on Delegated Powers and Deregulation, and I am grateful to him for his earlier indication that the Government will respond positively to those. The noble Lord also referred to the legal opinion obtained by Justice and FIPR, revealing serious concerns that Part III would contravene Articles 6 and 8 of the ECHR. I shall not explain it in detail, but it is enough to say that this argues convincingly, among other things, that Part III violates the presumption of innocence, infringes the right not to self-incriminate and that there are inadequate safeguards against abuse of the interception regime.

Given the experience of my noble friend Lord Campbell of Alloway, I simply draw the attention of the Minister to the words of Madeleine Colvin, legal policy director at Justice: As these are significant breaches, we expect the Home Office to engage in open debate on how far this Bill will fail to be human rights compliant in practice, rather than merely asserting that it is In that context, the noble Lord will recall the injunction from the Trade and Industry Select Committee of another place when it investigated this issue in its original form in the Electronic Communications Bill. Its recommendation was unequivocal: Having certified that legislation does not contravene the ECHR, Ministers must be able to demonstrate, when challenged, that this is indeed the case. We recommend that the Government publish a detailed analysis to substantiate its confidence that Part II … does not contravene ECHR". I am of course grateful for the assurance given by the Minister that he will welcome further debate on these matters, and his response to the intervention of my noble friend Lord Campbell of Alloway. But, bluntly, if the House cannot scrutinise these matters properly, not only does that make for bad law, it also undermines and demeans the purpose of Section 19 certificates.

As regards the Data Protection Act, it is my recollection—no doubt the Minister will correct me if I am wrong—that: Personal data shall he obtained only for one or more specified and lawful purposes, and shall not be further processed in any manner incompatible with that purpose or those purposes". Moreover, Personal data shall be adequate, relevant and not excessive in relation to the purpose or purposes for which they are processed". The problem here, as both my noble friends Lord Cope and Lord Lucas have mentioned, is that interception of "communications data" is, of necessity, indiscriminate. The Internet is a packet-switching system which, for technical reasons that are way beyond my understanding of the subject, means that it is only possible to tap anything by tapping everything. In effect, the Bill as drafted is in breach of the data protection principles.

It gets worse. It is a safe assumption that ISPs will need to be—indeed they already are—registered under the terms of the Data Protection Act as data controllers. Accordingly, they are obliged in law to comply with the seventh data principle, which states that: Appropriate technical and organisational measures shall be taken against unauthorised or unlawful processing of personal data and against accidental loss or destruction of, or damage to, personal data". And yet the Bill explicitly requests ISPs to ignore their appropriate technical and organisational measures to allow the interception regime to operate. Additionally, as I have already explained, the Internet is a packet-switching system. It is therefore inevitable that when interception of communications data takes place, unauthorised or unlawful processing of personal data will also take place.

Like my noble friend Lord Lucas, I believe that the Bill is deeply flawed. By way of summary, I offer these observations from Caspar Bowden, the director of FIPR. The RIP proposals: seem to have been devised by redeployed cold warriors who want to put Britain on a paranoid infowar footing. Meanwhile the rest of the e-world plans a prosperous future based on trust in robust security without unwarranted interference". The proposals will enmesh us further in a culture of secrecy, which will corrode our democracy…A law which replaces the presumption of innocence with a medieval trial-by-ordeal is simply wrong, not a 'question of balance'. And his conclusion? Ministers come and go, but the legislation they leave defines our rights and freedoms. There is nothing in RIP that stops these powers being used arbitrarily…The RIP Bill cannot be patched up. It must be withdrawn and rewritten. No wonder the Observer has described the Bill as the worst UK legislation ever.

1.20 p.m.

Lord Brightman

My Lords, perhaps I may turn for a few moments from the substance of this most important Bill in order to invite your Lordships' attention to the curious way in which the Bill is drafted, and to express the hope that it will not establish a precedent. The curiosity is that the Bill has two general interpretation clauses, each of which is expressed to apply to the whole Bill; one to be found at the beginning of the Bill and the other at the end.

The unfortunate result is that if the reader wishes to find out whether a particular word or expression has a special meaning, and what that meaning is, he must turn first to the general interpretation clause at the beginning of the Bill and, if he does not find it there, he must then go to the second general interpretation clause at the end of the Bill.

I do not think that I have seen before a general interpretation clause split into two halves in this way. It is, of course, common to find an interpretation clause at the end of a part or chapter of a Bill, covering words used in that part or chapter. It is usual to find a general interpretation clause at the end of a Bill, covering words used throughout the Bill. But to have a Bill with two general interpretation clauses, each expressed to extend to the entire Bill, one at the beginning and one at the end, doubles the researches which might have to be made by the reader.

The two general interpretation clauses in this Bill are Clause 2 on page 3 and Clause 72 on page 76. Your Lordships will see that Clause 2 starts with the words "In this Act" and there follow some 15 words and expressions which have a special meaning. Similarly, Clause 72 on page 76 starts with the words "In this Act" and there follow some 32 further words and expressions which have a special meaning.

The inconvenience of this curious division of defined expressions can be illustrated just by reading Clause 1 of the Bill. It begins: It shall be an offence for a person". I pause there to see whether the word "person" has its usual meaning or a special meaning. I search Clause 2, the first general interpretation clause, and I do not find "person" there. So I turn to Clause 72, the second general interpretation clause, and I find that the word does indeed have a special meaning: page 77, line 21. I read on until I come to line 10 on page 1, where it says: intentionally and without lawful authority to intercept, at any place in the United Kingdom, any communication". I now wish to find out whether the word "communication" has a special meaning and, if so, what. I turn to the first interpretation clause, Clause 2 on page 3, and I find that the word "telecommunication" is defined there but not the word "communication". So I turn to the second interpretation clause, Clause 72, and—lo and behold—I find the word "communication" defined there at line 32.

I continue my reading of Clause 1 at line 12 on page 1, which states: in the course of its transmission by means of a public postal service or a public telecommunication system". I turn to the first interpretation clause and am grateful to find both "public postal service" and "public telecommunication system" defined there, so I need search no more.

Is it sensible to compel the reader to dodge between two general interpretation clauses, one at the beginning and one at the end of the Bill, each of which is expressed to apply to the whole Bill? Why not have just one general interpretation clause at the end of the Bill, like other Acts of Parliament?

That is not quite the end of the confusion arising from the two general interpretation clauses. The word "modification" is defined in the first interpretation clause as including—I am quoting from page 4, lines 43 and 44— the attachment of any apparatus to, or other modification of or interference with", a stated subject matter. In the second general interpretation clause, the word "modification"—I am now reading from line 17 on page 77—is defined for a second time: this time as including "alterations, additions and omissions". Why do we have different definitions of the same word in the two general interpretation clauses?

There is a further curiosity. The word "apparatus" is made use of in the first interpretation clause and it will be found on page 4, line 44. But, strangely, if I wish to find out what "apparatus" means, I must turn to the second interpretation clause and read line 26 on page 76. So we have a word used in the first interpretation clause that is defined not in that clause but in the second interpretation clause. In other words, you have to use the second interpretation clause to discover the meaning of a word used in the first interpretation clause.

I ask again: why not have just one interpretation clause and save the reader a whole lot of trouble? I am sure that it would not be difficult for the Government to table an amendment combining the two interpretation clauses, rewriting them as a single interpretation clause in the usual way, and getting rid of the anomalies which I have mentioned.

To put it shortly, I think that Clauses 2 and 72 could do with a little tidying up. I have great respect for the skill of those who draft our Bills, but I do wish that the drafting could be just a little more user-friendly, so as to make life easier for us and for the public who are our readers. I did not give the noble Lord the Minister notice of the points that I intended to make, so I do not expect a reasoned response today. Perhaps the noble Lord will be kind enough to give the matter some consideration before we reach Committee stage.

1.29 p.m.

Lord Bassam of Brighton

My Lords, perhaps I may take the comments of the noble and learned Lord, Lord Brightman, first. I am grateful to the noble and learned Lord for what seems on the face of it a fairly withering analysis of Clauses 2 and 72 and I give a commitment to undertake to provide at the earliest opportunity the response for which he has asked. The noble and learned Lord and the House deserve no less.

The debate has been wide-ranging. I have listened with care to all of the contributions and the various points made. I was delighted to hear from the noble Lord, Lord McNally, that I was not "Big Brother". That will cheer up my friends and particularly my family. However, I was rather worried, listening to the comments of the noble Earl, Lord Northesk: I thought that I was about to fall into the trap of becoming "Big Browser"! As to the noble Lord, Lord Lucas, the Bill is obviously a measure that he wants to "RIP". I got the noble Lord's message. However, he did offer some constructive comments and it is our intention to focus more precisely on his concerns in Committee.

I thank also the noble Baroness, Lady Thornton, for her comments. I am grateful to her for concentrating constructively on the concerns expressed by those who are rightly in the business of raising issues relating to child protection and child safety. The noble Baroness's comments were very helpful.

The twin objectives of the Bill are essentially uncontroversial. All will agree that there is a pressing need to ensure that these powers are regulated in accordance with the European Convention on Human Rights. Many speakers commented powerfully on human rights and civil liberties. Clearly, the House must pay close attention to those concerns.

Whether or not people like the detail of the proposals, I believe that there is common agreement that the existing legislation needs revision in the light of the rapid changes in technology. Concerns have been expressed about the precise drafting of the Bill. As I listened to the debate, I realised that for some Members of this House the measures were too wide in their remit and application; for others, they were far too narrow. Such observations are frequently made about systems of regulation. But, in examining the challenges of new technology, in large part what we are doing is bringing together legislation and revising and updating it. So noble Lords will be familiar with much of the content of the Bill. There is just one area where we are beginning to open up and extend the provisions, because there is an essential need to do so. I am acutely aware that the proposals in the Bill will not work unless the Government work closely with the communications industry in implementing them. I shall say more about consultation later.

Many questions were raised during the debate. If I do not manage to provide answers to all of them today, I shall endeavour to do so in writing. The noble Lord, Lord Cope, in his generally constructive approach to the issues raised by the Bill, asked a number of wide-ranging questions. However, the noble made the general point—as did other noble Lords, notably the noble Earl, Lord Northesk, and the noble Lord, Lord Lucas—that we are embarking upon a course that could drive e-business overseas.

On the evidence so far, we have not found there to be a flow away from the UK of e-commerce and e-business as a result of the Bill being considered. We believe that we are ahead of the game compared with our European partners, both in terms of e-commerce and law enforcement legislation. We make no apology for that. In fact, we are delighted at the progress that we have made.

Law enforcement agencies world-wide are worried, as we are, about the threat from the criminal use of encryption. The United States has proposed a package of new law enforcement measures to combat the encryption threat. I refer to the Cyberspace Electronic Security Act, whose provisions are very much along the lines of our own approach to the problems.

Some critics have referred to the Irish legislation, and have made much of the comparison between what was said to be the Irish approach to encryption policy and the RIP Bill. The Irish published their e-commerce Bill last month, and it is now clear that we are not comparing like with like. Such investigative powers as are contained in the Irish Bill concern only offences under the legislation itself. These are limited to the fraudulent use of electronic signatures or certificates—which is nothing like the RIP Bill. Similarly, a provision in the Irish Bill stating that keys may not be demanded relates only to those limited circumstances. The bigger question of access to keys for wider law enforcement purposes remains open.

The noble Lord, Lord Cope, also raised a question with regard to dial-through fraud. We have listened with great care to the industry and we have carefully studied the recent case of Morgan v DPP. We hope to bring forward amendments making prosecution of dial-through fraud far easier.

The noble Lord asked why the NCIS request for a power of search was turned down. We fully understand and appreciate the position put forward by NCIS, but we consider that to add to the Bill a special power of search would probably be a step too tar. That case has already been made by some. The new decryption power works only in relation to material that can lawfully be obtained now under existing search powers. Law enforcement agencies already have powers to search for material and we are not convinced that a new power is entirely necessary. Importantly, given the way in which the technology works—through encryption—the key law enforcement wants may not be held by the suspects but with a third party. That raises the spectre, whether justified or not, of entirely innocent premises being searched. I understand that members of the party opposite did not press their amendment at Report stage in another place, but clearly the issue is of fundamental concern.

The noble Lord, Lord Cope, also raised the issue of why the Benefits Agency is not an intercepting agency. The Bill places the Benefits Agency in the same position as every chief constable in England and Wales. In serious cases the agency may apply to NCIS to carry out interception on its behalf if the application is authorised by the Secretary of State. The noble Lord also ventured to suggest that the Government seemed to be proposing the monitoring of all e-mails. That is not the case. We have never said that. It is not our intention, and the Bill will not permit it to happen.

The noble Lord, Lord Cope, raised a question regarding the use of key escrow. I can advise the House that the issue of key escrow is firmly off the agenda. The PIU report last year recommended that key escrow be dropped, and the Electronic Communications Bill explicitly rules out its reintroduction. There is nothing in this Bill which endeavours to bring it back.

I said earlier that I enjoyed listening to various comments of noble Lords. In particular, the noble Lord, Lord McNally, made some constructive observations. Without wishing to kill off the Bill, he believed that your Lordships' House would give it a thorough test on two particular grounds: civil rights and human rights. I believe that that is correct. The noble Lord also referred to the cost to e-commerce and industry. If we approach this legislation in that vein, I believe that our debates in Committee and beyond will be measured and well considered.

The noble Lord was right to pay tribute to the lobby groups. Although Ministers may from time to time find lobby groups somewhat irritating, they ensure that we focus on hard and difficult issues.

The noble Lord asked why there were so many commissioners. We believe that we have the balance right. However, we have reviewed the situation and have agreed in another place to remove from the Bill the separate covert investigation commissioner. The functions which he would have dealt with will now be taken over by the surveillance commissioner. Therefore, we have managed to pare back in the noble Lord's direction. In paying tribute to the concerns of various lobby groups, the noble Lord was perhaps touching on the need for continued consultation. I made clear at the outset that I saw value in that.

I was asked just how extensive had been our consultation arrangements in the production and formulation of the legislation. Clause 12 of the Bill requires consultation. The Home Office has spoken formally and informally about this Bill to a large number of organisations. All 40 PTOs have been invited to a briefing and discussion on the Bill. The ISPA and ISPs generally have been invited. The list also includes: AOL, BT, Demon, Linx, Research Machines, VCB net, BT internet, Energis/Planet Online/Freeserve, Fastnet, Uunet; AICES, OFTEL, FIPR, ICX, AEB, EURIM, ACPO, Royal Holloway College, ISPCon, Scrambling for Safety—I have been scrambling for words after such a list!—and so on. We have consulted very extensively. Other organisations feature on the list, not least the child protection groups.

Lord McNally

My Lords, to enable the noble Lord to give a commercial, he has invited Members of your Lordships' House to the Moses Room for a briefing on the Bill shortly after the Recess. Does the Minister hope to win over support, or what is the intention of that briefing?

Lord Bassam of Brighton

My Lords, I am always encouraged to brief by the Chief Whip. (Perhaps I should not say that.) We try to provide an opportunity for detailed briefing, and that is precisely what we seek to do in this exercise. We are happy that any Member of your Lordships' House should attend to put useful and valuable questions.

I have spent a long time trying to summarise the main points of concern. There are a number of other questions to which I am happy to try to respond. However, I am aware that noble Lords will want to make progress. The noble Lord, Lord Lucas, asked whether I regard Clause 1 as satisfactory. He questioned whether it would catch international actions. I am satisfied with the construction of the clause which follows a detailed consideration of technical and legal issues. I shall be happy to consider specific scenarios in Committee, but nothing that the noble Lord said today causes me particular concern. The noble Lord asked whether there was a definition of "in the UK". The answer to that question may well be found in Clause 2(4). Perhaps some close textual analysis will serve the noble Lord well.

The Earl of Northesk

My Lords, I gain the impression that the noble Lord is beginning to wind things down. The noble Lord will have noted from my speech that I am particularly concerned about the interaction of this Bill with the Data Protection Act. Is the Minister prepared to comment further on that?

Lord Bassam of Brighton

My Lords, I am grateful to the noble Earl for the prompt. In constructing the legislation we have had to pay particular regard to other legislation in the same field, and there has been close liaison on that. No doubt in Committee the noble Earl will want to raise particular points about those areas in which he believes matters have not been joined up. I look forward to his further and more detailed questions on that point.

The Earl of Northesk

My Lords, I simply refer the Minister to what I actually said.

Lord Bassam of Brighton

My Lords, I shall pay particularly close attention to Hansard in due course. The noble Lord, Lord Lucas, asked whether the Security Service could be authorised to plant a virus that would cause a computer to send back information. It has been a long-standing policy of successive governments not to comment on the kinds of operation undertaken by the Security Service. I can assure the House that the service operates entirely within the legislative framework which governs its actions. I do not believe that anyone would wish us to depart from that.

The noble Baroness, Lady Harris, asked about the meaning of "prevention and detection of crime". That issue was raised in Morgan v. DPP. We are giving careful consideration to the implications of that case, and I am grateful to the noble Baroness for reminding us of it. The noble Baroness also asked about adding purposes to the Bill. The Secretary of State cannot add any purposes that he sees fit. The Human Rights Act makes it unlawful for him to make an order which is incompatible with the ECHR. However, we shall look at possible amendments to restrict the order-making powers.

This has been a long debate in which I have enjoyed the contributions of noble Lords. We shall be very much in listening mode. I have tried to answer as many points as possible this afternoon, and I hope that I have provided your Lordships' House with careful reassurance. Doubtless when we return to these matters at a later stage I shall be able to explain the position of the Government more fully and listen closely to detailed concerns. In the mean time, I commend the Bill to the House.

On Question, Bill read a second time, and committed to a Committee of the Whole House.