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7.45 pm

The Bill already provides the framework for a three-stage process to arrive at a reasonable intercept capability in respect of individual communication service providers. Given the comments of the hon. Member for Bury St. Edmunds (Mr. Ruffley), it is important to say which of those three stages would be removed if the technical approval board were to be established, in order to avoid an additional stage that carried implications of cost and bureaucracy.

The first stage is the Bill itself, which sets out the principle that responsibility for maintenance of an intercept capability should fall to the provider of the communication services. That is an established principle long adhered to by public telecommunications operators. It leads to the need for the second stage, which is a thorough consultation exercise on the draft clause 12 order--the generic reasonable intercept requirements document.

There is already a good deal of informal consultation going on, the debate on which has recently been informed by an independent report on the feasibility of intercepting

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internet service providers. That report was commissioned by the Government and is now available on the Home Office website. Later this year, we shall publish a draft order for formal consultation with providers of communication services and regulatory bodies. Following the consultation, the Secretary of State will lay the order before Parliament. If Government amendment No. 24 is accepted, the order will be passed under the affirmative resolution procedure.

That is the second stage, consisting of substantial debate. The hon. Member for Bury St. Edmunds spoke about seeking genuine input from the industry, but we believe that that process has already commenced and will continue. The hon. Gentleman also talked about my feet being held to the fire; I am glad to learn that the mid-19th century traditions of the public schools--whether Rugby or another--are alive in the modern Conservative party.

Mr. Ruffley: I did not go to Rugby.

Mr. Clarke: I was not suggesting that the hon. Gentleman did; I was saying that the ethos still infects his party today. However, I wish to place on record the fact that I do not enjoy having my feet held to the fire--no part of me takes pleasure in that.

Mr. Heald: I am sorry to interrupt the Minister, especially with an intervention that is not even amusing. He says that the technical approval board is not a suitable body; however, paragraph 5.6 of the Government's original consultation document states:

What did they mean by that?

Mr. Clarke: I am grateful to the hon. Gentleman for bringing me back to earth after my far-ranging diversion following the hon. Member for Bury St. Edmunds. I shall come to the point raised by the hon. Member for North-East Hertfordshire shortly.

The third phase of the procedure consists of the serving of individual notices on communication service providers. The notices will say what providers are expected to provide and give the time scale within which they should provide it. Individual notices will result from dialogue between the Government and the service providers themselves. Each notice will take account of the precise circumstances, much of which information will be commercially sensitive, and it will be consistent with the order passed by Parliament. The purpose of the notices will ensure consistency across the industry. I emphasise that individual notices will not be imposed by any external body--for example, a technical approval board--but will result from dialogue between the Government and service providers.

The Opposition amendments would require a further step to take place--the approval of any requirements by a technical approval board. However, that presupposes that a notice has been served that is unreasonable, or that the service provider has been unable to comply with it. Either circumstance would be counterproductive and would not be brought about by the Government.

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The effect would be that the service provider would be unable to comply, or would refuse to do so, which would place on the Secretary of State, if he wished to take enforcement action, the onus of convincing a court of the reasonableness and proportionality of the notice. It is difficult to see what a technical approval board could add to the process.

What would enhance the process is the proposal in the second stage of the generic reasonable intercept requirements document, under which we have established, as the hon. Gentleman knows, the consultative body with which we are discussing these matters in a consistent and inclusive way. That was referred to in his document.

If the proposal made by the hon. Member for North-East Hertfordshire were agreed by the House, I would be concerned about how the six members of the putative technical approval board would be selected, and how they would consider applications in commercial confidence. As I made it clear in Committee, I believe that those are difficult issues. We believe that the proper way is to consult the industry.

The hon. Gentleman suggested that there was significant industry support for a technical approval board. However, in the responses to the consultation document, the industry did not generally support the idea of an independent industry body. We responded by setting up the general consultation, which has been described.

In the light of what we have just heard, I want to place it on record that the Home Office has received no representations supporting the idea, despite our regular contact with the Federation of the Electronics Industry and the operators' group. The Home Office has day-to-day contact with the telecommunications operators that have a current intercept capability. They are understandably reluctant to share commercial secrets, although they willingly share interception methods where that does not compromise their commercial position.

I am happy to examine the detailed correspondence and the survey that the hon. Gentleman has conducted on the matter. It is perfectly reasonable for him to do that, and I shall consider his conclusions. I emphasise that the Home Office has not had representations from the industry supporting the idea of a technical approval body. The responses to our original consultation document were not positive in that regard, either.

Mr. Heald: The original proposal was that approval would be given by Oftel, which is quite different from what I am proposing.

Mr. Clarke: I understand that. It is a fair point. I do not seek to second-guess the hon. Gentleman, but we have not had representations from the industry supporting the idea of a technical approval board.

Mr. Heald: I am grateful to the Minister for giving way again. If he thinks that the proposal is worth considering, is it possible for the Home Office to consult on it to satisfy itself?

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Mr. Clarke: The debate is public, and our discussions with the industry continue, both with individual ISPs and with the associations. I do not believe that a more beneficial situation would result from the imposition of the proposed body, on top of the three-stage process that I described, given that--I place this on record again--we are seeking agreement before introducing any order. That is why I must resist the hon. Gentleman's amendment.

Amendment No. 12 proposes that users of communication services should be formally consulted about the order made under clause 12. As I explained in Committee, it is right that the wider public should have the opportunity to offer their opinion on the general use of interception and the circumstances in which it may be deployed. They took that up during the public consultation exercise, and they will have the opportunity to comment on the codes of practice when we consult on those later this year. Although we will publish the draft on the Home Office website for all to see, we have not extended the requirement on the Secretary of State to consult more widely than the Bill provides.

On the Government amendments, I mentioned at the beginning of my speech that, following consideration of the representations, we tabled amendments Nos. 24 and 28 to make the clause 12 order subject to the affirmative, rather than the negative, resolution procedure. I hope that that will provide reassurance.

As we acknowledged throughout the debate, and as the hon. Gentleman said in his intervention, cost is an extremely important consideration. I am conscious of the fact that there are serious questions relating to the costs and their apportionment between Government and industry.

The Opposition amendment requiring that the Secretary of State "shall", rather than "may", make payments to communication service providers was discussed at length in Committee. The Parliamentary Secretary, Lord Chancellor's Department, my hon. Friend the Member for Liverpool, Wavertree (Jane Kennedy), offered in Committee to include in the Bill a provision making clear the Government's intention to continue to meet marginal costs. In the light of that commitment, Opposition Members withdrew their previous identical amendment on the matter. The Government have now tabled, as promised, amendment No. 25, setting out our commitment to continue the payment of marginal costs. I am grateful to the hon. Gentleman for his support and acknowledgement of that.

Amendment No. 13 demands that the Secretary of State report annually to Parliament providing information on what payments have been made to whom, and if payments have not been made, the reasons why that is so. We cannot support the amendment and hope that, on serious reflection, the Opposition will withdraw it.

We believe that the amendment would fatally undermine the interception regime if it became publicly known which communication service providers were maintaining an intercept capability. On publication of the annual report, criminals would automatically move their custom to communication service providers that were not listed as having received contribution payments from the Government to provide interception assistance. Moreover, we do not think that CSPs would wish their individual assistance to be publicly acknowledged in such a manner.

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Similarly, the specific reasons why payments have been made and the particular level at which they have been set in a particular case may touch on operational practices which could adversely impact on law enforcement practices and capabilities.

I understand the hon. Gentleman's arguments with regard to the technical board, although I do not accept them, but I hope that on this issue, he will concede that his amendment would be damaging to law enforcement in this country, which I know is not his intention.

New clauses 4 and 6 introduce a right of appeal within seven days of a notice being served that payment by the Government will not be made, or if the recipient of the notice considers the payment to be insufficient. Although I understand the intentions behind these new clauses, I do not consider them to be necessary.

My final point refers to the Smith report. Hon. Members will be aware of the report, which has been produced by independent consultants and has been published on the Home Office website. The report discusses the various interception capabilities that may be required and the different costs involved in supplying those requirements. The document will be used to inform our consultations with industry on how costs should be allocated.

Once consultations have been completed, we will set out in secondary legislation how costs will be allocated between industry and Government. Following on from that, decisions on specific cost allocation will be reached with each individual CSP by mutual agreement, after comprehensive consultations. That is exactly how decisions are currently reached--through mutual agreement on an individual basis. We have not encountered any calls from industry to change the current arrangements that I have just described.

In the light of comments made in the House and outside, I shall comment on some of the proposed costings. There has been a suggestion that £34 million is the appropriate cost, as the hon. Member for Bury St. Edmunds mentioned. That assumes that all 400 ISPs will be obliged to possess an e-mail active intercept capability, amounting to £17 million, and furthermore that the 20 largest ISPs will be obliged to possess a semi-active or passive capability, amounting to another £17 million.

I make it clear that that is not the intention at all. We do not currently require all public telecommunications operators to possess an intercept capability, and we do not expect to ask all ISPs to carry an intercept capability. We therefore consider the £30 million price tag as overestimating considerably the overall costs of providing a reasonable intercept capability.

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