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Mr. Heald: Does the Minister agree that, when an offence is repugnant to justice, any sentence would be wrong? However, if an offence is fair and a trial is fair, does he agree that its seriousness should be reflected in the sentence, especially when it relates to money launderers, drug traffickers and paedophiles?

Mr. Clarke: I do not accept that the offence is "repugnant to justice", to quote the hon. Gentleman, as I shall explain later.

I resisted these amendments in Committee, where we discussed this issue at some length. I remain unconvinced that changes are necessary. The central accusation--the core point being used to justify the amendments--is that the construction of the offence of failing to comply with a decryption notice in clause 49 means that innocent people will suffer. We do not agree. The issue has

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generated more heat than light among critics of the Bill, but I accept that the issue is important, so I will state the Government's position clearly.

6.45 pm

The first point to make and to emphasise is that there must be reasonable grounds for believing that a person served with a decryption notice has a key before use of the power can be authorised in the first place. That is an important barrier and burden, and I assure the House that the Government take it seriously.

Importantly--it is worth stressing this point again--part III does not allow the authorities to obtain material that they cannot obtain now. New types of material are not being drawn in by the Bill: it is a question of ensuring that authorities can obtain the material that they are already entitled to obtain.

The new decryption power works only where material is lawfully obtained. In other words, material must be obtained lawfully before the decryption power can come into effect. Only if that material is encrypted, and someone who is in a position to decrypt it refuses to do so, does the question of a prosecution arise.

Two hurdles must be negotiated before a prosecution is justified--there must be reasonable grounds, and the material has to have been lawfully obtained. I also stress that, where prosecutions occur, it is for the authorities to prove, beyond reasonable doubt, that the accused has, or has had, a key. That is a significant burden of proof, and it is laid on the prosecution, not the defence. It is therefore the third serious burden of proof that the prosecution in such cases must meet.

The hon. Member for Southwark, North and Bermondsey (Mr. Hughes) chided me for using of the phrase "statutory defences". He was right to say that a similar question was debated in connection with the Terrorism Bill--in Committee, on Second Reading and on Report. There are statutory defences for people who have destroyed, lost or forgotten keys. Those defences need to be proved only on the lower level of proof--that is, the balance of probabilities.

Many criminal offences on the statute book place some burden on the accused. We have heard much talk about reversed burdens of proof, but the real issue is whether an accused can show, on a balance of probabilities, that he or she no longer has access to the key. How can the accused do that? The answer is straightforward, and applies in any court of law or legal circumstance. The accused must explain what has happened and the court will decide whether, on balance, he or she is telling the truth.

I believe that such circumstances will arise very rarely. I accept that that assertion is open to challenge, so I shall set out the reasons for my belief. I shall begin with looking at the position of industry in this matter. Were a business ever to find itself in a position of having to show, on the balance of probabilities, that it did not have a key at the relevant time, I fully expect that it could produce any number of technical records to explain the circumstances under which it normally used, stored and disposed of keys.

That is what businesses do. The right hon. Member for Penrith and The Border described the system to deal with lost keys that obtains in the House, and it is the norm for

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businesses and organisations such as public authorities to have such a system. Responsible and secure businesses are likely to have back-up mechanisms. They will anticipate the loss of a key, and will have an audit trail that shows when keys are used for what purposes, and when they are destroyed.

We know that keys are valuable to business. Businesses have impressed that upon us, but keys are also valuable to anyone who uses systems such as those under consideration. It is therefore reasonable to expect that businesses will be in a good position if--for legitimate businesses not suspected of involvement in criminality it is a big if--they find themselves facing a prosecution. Because the requirements are straightforward and set out clearly in the Bill, the number of times that any problem will arise for businesses in this regard will be minimal; indeed, I consider that it may never happen at all.

For individuals, forgetting a password is a reasonable thing to do. People in my private office at the Home Office, and others with whom I have worked, accept that it is not unknown for me to forget a password occasionally. The right hon. Member for Penrith and The Border admitted that he, too, was often guilty of forgetting his passwords.

It is rare for no contingency arrangements to be in place for such an eventuality. The right hon. Member for Penrith and The Border described the arrangements--involving direct contact with parliamentary officers, his reliance on his wife and so on--that he has in place. Depending on the circumstances of the case, people might relatively easily state that they have forgotten their password or their key, and then volunteer how it was generated, when they last used it and what they normally do when they forget their key. They could also say whether their service provider, for example, provided a back-up system, or whether every time they lost their key all data was destroyed or lost. There are no impossible burdens here--the processes are very clear.

I stress that clause 49(2) excuses someone from liability if he or she no longer has possession of the key and has done what he or she can to enable the key to be recovered by the person requiring it. That does not mean that the defence will fail if the key cannot be recovered--that would be an impossible burden. It simply means that the accused must assist by giving as much information as he or she has available. If they do, they have nothing to fear from prosecution. I emphasise that point, because I believe that it has not been made sufficiently clearly to date.

Mr. Simon Hughes: The argument is perfectly reasonable, but the most vulnerable people will be individuals who are not part of a system with a back-up procedure. They are their only check--they invent the password, and they can forget it. Given that the test is only 50/50 in that it is a case of whether the person is believed or not, would it not be better at least to concede that someone must be found, not just on a balance of probabilities, but beyond any reasonable doubt, to be hiding the fact that they know the password, data or encryption mechanism?

Mr. Clarke: I have tried as best I can to deal with the points that have been made fully. The balance suggested by the hon. Gentleman is not right; that which we are suggesting is right, which is why the Bill is worded as it is.

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On sentencing, I take the point made by my hon. Friend the Member for Luton, South (Ms Moran). I pay tribute here in the Chamber, as I did in Committee, to the work done on this issue by the children's charities, which addresses serious and important points. As my hon. Friend said, complex issues of civil liberties are concerned, and there is no doubt that the overriding concern must be the seriousness of the offence. Increasing the penalty to 10 years would put the offence on a par with, for example, cruelty to children. I am not sure whether that is right.

The Bill has been accused of amounting to key escrow by intimidation, a point to which the hon. Member for Esher and Walton (Mr. Taylor) referred. We have been keen not to go down that road. There is a difficult balance to be established between the two questions, and we have decided that the balance proposed in the Bill is the right one. However, I can tell my Friend the Member for Luton, South that we will look carefully at how the Bill evolves and whether the situation that she describes becomes a reality. If her fears are proved right, we will look again at the appropriate level of sentencing in this area.

The Government do not take lightly the questions that have been raised in the debate--we take them very seriously. It is a hard balance to decide, but we think that the balance in the Bill is right. I commend the Government amendments to right hon. and hon. Members and hope that they will reject the Opposition amendments.

Mr. Heald: We are simply not satisfied, and we have not been throughout. Barristers have described the offence as repugnant; they have referred to cases in which judges have considered similar provisions and described them in the most damning terms. It is wrong that we should create offences that offend against the golden threat of justice, as it has been described, by saying, "Oh well, the sentence is only two years." It does not matter what the sentence is if the offence is unjust. If the offence is just, the serious crime of failing to give information to the prosecution authorities that might reveal money laundering, drug trafficking or paedophilia should be marked.

We want a just offence to be created, which does not require an innocent man to prove his innocence but puts the burden of proof fair and square on the prosecution. If he is found guilty, the event should be marked with due seriousness. We intend to divide the House on new clause 1, which we believe meets the justice of the case.

Question put, That the clause be read a Second time:--

The House divided: Ayes 136, Noes 317.

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