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6.30 pm

My dementia is no more advanced than that of many other hon. Members, but I have several passwords by now. I must have about 20 hotmail accounts, not for any security reasons, but because I cannot remember the supposedly infallible password for the account I created last weekend. I always pick a password that I am bound to remember, but I always forget it. When I was on the parliamentary system, I was always having to call the Communications Directorate--I see the Parliamentary Secretary nodding--to admit that I could not remember my password and could not get into the system. The directorate tells me that about 90 per cent. of the calls to its hotline are from Members of Parliament or their secretaries and staff who cannot remember their password. That may be a lighthearted point, but what would happen if we had encrypted material?

What will happen to all those innocent business men and women who have encrypted material with an encryption key involving letters and figures, but who cannot remember it? They might have lost the bit of paper the key is written on, or mixed it up with a pin number from the bank, or any of the other bits and pieces of information about which we are told, "Keep it safely, memorise it, don't forget it." We try to have a system, but I often have to call my wife, because she remembers my pin number. We have to keep all sorts of information securely and, inevitably, as human beings, we fail. We forget or lose things.

When we forget or lose information, we should suffer the penalty of inconvenience, such as the hassle of calling the bank to request a new card or dealing with the computer companies. We should suffer the embarrassment of admitting to the police that we cannot find a document, and have to turn our houses upside down to try to find it. However, someone should not go to prison for two years because they have been forgetful. If the Government accept new clause 1, on the other hand, the paedophiles, the drug dealers and the terrorists should go to prison for 10 years if they deliberately try to keep their encrypted information from the security services. That would be the effect of new clause 1, and I urge the Government to accept it.

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Mr. Richard Shepherd (Aldridge-Brownhills): My right hon. Friend the Member for Penrith and The Border (Mr. Maclean) has put the argument most pithily. The concerns and fears aroused by clause 49 are that an innocent man may be found guilty. One reluctantly acknowledges that the questions of mens rea and the burden of proof are no longer defended in the House by the majority parties. I have great difficulties with the view of this country adopted by the Home Office and those who drafted the clause.

I accept the comments of the hon. Member for Southwark, North and Bermondsey (Mr. Hughes) that our liberties are now more consistently defended in the other place. In saying that, I request the other place to examine the Bill rigorously. It has features that are unacceptable to our sense of freedom, liberty and the due processes that we have held to be important for many years.

I give an especial cheer for amendment No. 18, which contains the simple words "leave out Clause 49". That concentrates the mind better than any other amendment. Clause 49 is dreadful as drafted and would not be much improved by any of the amendments. The Home Office should reflect on that before the Bill reaches the House of Lords.

Mr. Charles Clarke: Before I respond to the detailed points made in debate, I offer the right hon. Member for Penrith and The Border (Mr. Maclean) a little suggestion to help him with his passwords. If he needs eight-letter passwords, he could rotate three--remember, Tory-Gvmt and dementia. They would remind him of the history of much of what we are considering.

With your agreement, Mr. Deputy Speaker, I shall first explain the reasons for the Government amendments in this group. The effect of Government amendment No. 39 is to make further stipulations about the form that a decryption notice is to take. In Committee, hon. Members tabled a number of amendments relating to the form of a decryption notice and I undertook to look at whether the requirements set down in clause 47(4) could look more like those for demands for communications data in clause 22(2).

Government amendment No. 39 is the result and I think that it will be welcomed. I am grateful to the hon. Member for North-East Hertfordshire (Mr. Heald) for doing so. I know that industry has made representations on it. As I said in Committee, there is clearly a need for consistency regarding notices--for the sake of the authorities authorising and serving the notices and for the sake of those receiving them, whether individuals or businesses.

Industry was worried about the possibility of receiving "spoof" notices. Companies will also want to know what it is that they are being asked to provide and by what time. Government amendment No. 39 addresses those points. There clearly needs to be an audit trail for queries. I hope that business will be reassured by that.

There should be an agreed format to notices. How this looks in practice is properly the subject of consultation with industry and others, because we want to get it right to achieve clarity and best practice. That work will be taken forward in the public consultation on the code of practice for part III.

Government amendment No. 67 inserts an extra test in clause 47 to specify that a requirement to disclose a key may be imposed only when it is believed that special

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circumstances make that necessary. In Committee, I undertook to consider whether there was room for narrowing down the circumstances when a key might be required to be disclosed rather than the authorities simply accepting the plain text of protected material.

I know that many, especially in industry, have no difficulty with the principle of handing over intelligible data when required to do under some lawful authority. However, I recognise that there are concerns about handing over keys, despite the tests and safeguards already in the Bill. The amendment is designed to respond to that concern.

I have previously said that the Government expect that the disclosure of plain text, rather than a key, is likely to be sufficient in most cases in responding to the service of a decryption notice. That is especially true where legitimate businesses are concerned. However, we have listened to industry's concerns and have tabled this limiting amendment, which introduces an extra test to clause 47. We already have a proportionality test, so the logical addition is a necessary one.

The amendment ensures that imposing a requirement to disclose a key may be made only where there are special circumstances to the case making that necessary. We have given that careful thought and, in the case of decryption requests made to legitimate businesses, a requirement to disclose a key where the plain text is available would certainly be most unusual. The difficulty for the law enforcement agencies surrounds the use of the power against suspects. In those cases where trust may be an issue--for example, guaranteeing that any plain text disclosed is the right plain text--requests for keys may perhaps be more frequent. The future is uncertain and we cannot know how often that might be, but the amendment limits the power to demand a key to special cases.

As we have said, the Government are, in many ways, trying to deal with a future danger here. The consensus view is that the rising criminal use of encryption poses a significant threat, for many of the reasons already mentioned in the debate. However, neither the law enforcement agencies, nor industry itself, can predict just how the technology will spread--and nor can the Government. We are striving to maintain a balance with the legislation now. This amendment is a reflection of that balancing exercise. In response to suggestions made in Committee by hon. Members of all parties, I have volunteered these changes because we are genuinely seeking to strike the right balance between providing effective powers and allaying the reservations about the Bill felt in industry and among groups concerned with civil liberties.

Our intention is to set out in the code of practice what circumstances would be considered special--a point raised specifically by the hon. Member for North-East Hertfordshire (Mr. Heald). A draft of the code will be published for public consultation, but the relevant circumstances may be determined along the lines that we have previously set out--for example, where issues involving trust or time limits mean that keys might be required in a special case. We think that those issues of trust and timeliness are central to the implementation of the "special" need.

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I hope and believe that industry will welcome the amendment, and I am glad that it has been generally supported in the debates so far.

Mr. Simon Hughes: When will the draft code of practice be published? Did the Minister specifically reject the "reasonable belief" test for the exceptional occasion when the key itself--rather than the other copy--would be sought? When he was considering the issues raised by the hon. Member for North-East Hertfordshire (Mr. Heald) and by us, did he apply his mind to when the power adopted by the Government might be used? Is that in the code of practice, or will it be set out somewhere else?

Mr. Clarke: We intend that the code of practice will cover the power that the hon. Gentleman mentions, and we have given the commitment that the draft code will be published while the Bill is going through the House.

In Committee, I said that I would explore the use of the word "exceptional" rather than "special". We have taken advice on the matter, and have decided that the word "special" should be used in the Bill, as we consider that it gives more legal flexibility than would the word "exceptional". However, we consider that the definitions of what will be covered by the word "special" will meet any concerns that the issue was not being dealt with effectively.

Government amendments Nos. 89 and 90 would exempt part III from the effect of corporate liability. In Committee, I undertook to consider whether part III could be exempted from the provision concerning directors' liability for corporate default. I know that industry has voiced concerns about the matter, and consequently we have agreed to make the changes that amendments Nos. 89 and 90 put into effect. I believe that those changes will be welcomed.

I turn now to the matters raised in the debate by Conservative and Liberal Democrat Members. There is an inconsistency in the Conservative argument. The right hon. Member for Penrith and The Border (Mr. Maclean) made an eloquent speech, in which he spoke about the changes being made to the burden of proof and the length of the sentence. However, the Conservatives' inconsistency was evident when they accused the Government of being both too tough and not tough enough.

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