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Baroness Nicholson of Winterbourne: My Lords, I am most grateful to the noble and learned Lord for his clear exposition. I shall, of course, consider everything that he said when I have the opportunity to read Hansard. I accept the noble and learned Lord's point about Amendment No. 29 in relation to Clause 28(4) as being a very tough one. We shall no doubt reconsider the matter next week, but I remind the noble and learned Lord that Clause 28(4) is a novelty; indeed, it did not form part of the 1984 Act. I do not believe that that Act has been deficient with regard to the draconian powers that this subsection gives to government. Nonetheless, I accept the noble and learned Lord's point about Amendment No. 29 and I shall withdraw it.

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However, I seek a meeting with the noble and learned Lord about Amendment No. 30 which, as he so rightly said, relates to an amendment to Clause 28(4). The noble and learned Lord argued that new developments may arise and that circumstances change. I should remind him that, if we are too prescriptive, we may fall into the trap that the French Government fell into in 1986 when they put forward such a fine-tuned computer hacking Bill that they have not been able to use it since, despite many incidents of computer hacking. That was because their definition of the computer--cerveau electronique--was so precise that it proved to be unusable the day after the legislation had been passed.

I understand precisely the point that the noble and learned Lord made, but he went on to buttress his argument by suggesting that this legislation would have a decade unchallenged and that it would have to be perfect throughout that time. I suggest to him that that will not be the case. We already know of a raft of EU directives which, one way or another, will impinge upon personal data protection. Indeed, the database legislation which the noble Lord, Lord Haskel, and I debated just before Christmas in a short space of time impacts upon this very Bill. I hesitate to speak for the noble Lord, but I believe that he may have shared my surprise when the Chamber emptied rapidly as he and I began to debate that legislation. People just do not understand the importance of this sort of legislation. Beyond this Bill a raft of possible EU directives looms, not least because, as I understand it, there will be an EU data protection registrar working with all the registrars from EU member states.

In that context, I draw the attention of the noble and learned Lord to the, as yet, undebated Schengen information agreement. That is a dramatic development, which I believe will also impact upon this legislation. Therefore, I believe that this sovereign nation--island though we may be, and despite our background of relatively fragile involvement with the EU over the past two decades--will be far more fully involved in such matters in the years to come. Indeed, I hope that we will be, because Britain has so much to offer in terms of professional knowledge and best practice to our EU partners.

In conclusion, I challenge the noble and learned Lord's argument on the implacability of this legislation, once it has been passed, in terms of other legislation not reflecting upon it. I believe that it will need to be re-examined by this House on a regular basis because of outside forces such as directives. There will be a registrar, the Schengen information agreement is already in place and there are more EU directives on the way. However perfect we make the Bill I suggest that, like the 1988 copyright Act, it will still be subject to incoming EU material which, under the new Government, I hope we will be in a position to influence rather than merely react to. That will be exciting. I ask the noble and learned Lord again for a meeting on the matter. In the meantime, I shall not press the amendment and beg leave to withdraw it.

Amendment, by leave, withdrawn.

[Amendment No. 30 not moved.]

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6 p.m.

Lord Norton moved Amendment No. 31:

Page 17, line 37, at end insert--
("(5) The Secretary of State may by order provide that a person specified in the order may assess any processing of personal data exempted from any provision of this Act by virtue of this section, under such conditions as may be specified in the order.").

The noble Lord said: My Lords, Amendment No. 31 relates to Clause 28. I shall not repeat the arguments that I made in Committee save to add that it would appear that most countries which have data protection legislation also have audit powers included in the legislation.

The representation that the Solicitor-General made at Committee stage of unnecessary intrusion by data protection authorities interfering in business in an irresponsible way is not a valid criticism to justify the non-use of audit powers. There are many examples in UK legislation where regulatory bodies have statutory powers of entry and inspection without consent. In some cases their powers go much further than anything suggested in the Committee stage amendments. I refer to powers contained in the National Audit Act 1983, the Audit Commission Bill, the Value Added Tax Act 1994, the Health and Safety at Work etc. Act 1974 and the Sea Fisheries Act 1968.

Further to the remarks of the Solicitor-General, a power to walk unannounced into premises and demand access to the data processing under way is unlikely ever to be needed by the commissioner. The nature of data processing is such that by asking the right questions and examining files the commissioner can usually determine whether good practice is not being followed through ignorance or default.

My amendment seeks to introduce audit powers for the specific use of Clause 28, which is a powerful clause, especially when compared with Clause 41--the information notice clause--which is at present weak. The auditors would not necessarily be from the data protection commissioner's office as that body may not have the necessary resources available. The audit bodies would be appointed by the Secretary of State. On grounds of democratic accountability alone there should be an external independent body to supervise compliance on a regular basis. I beg to move.

Viscount Astor: My Lords, my Amendment No. 49 is grouped with this amendment. That is an amendment that I moved at the Committee stage. It concerns the commissioner giving reasons. The noble Lord, Lord Williams, said at Committee stage that he accepted that my amendment applied only to the extent that the commissioner considers appropriate. However, he then added that it would not always be appropriate for her to explain her views. Of course if it is not always appropriate, she may consider that it is not appropriate. If I may say so, I felt that the noble Lord slightly contradicted himself. We want openness in this matter. I believe my amendment encourages that.

I believe that I may be speaking to the wrong amendment. I apologise to your Lordships. I should be talking about informal approaches.

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I believe that the commissioner ought to make an informal approach before issuing information notices. In Committee the noble Lord said that, by and large, this happens but that it was not obligatory. I considered carefully the noble Lord's argument. However, I am sure he is aware that the Bank of England is required by the Banking Act 1987 to make such an approach when it is considering revoking a licence. Therefore there is a precedent for my amendment. In the light of that discovery I hope that the Minister will reconsider the issue.

Lord Falconer of Thoroton: My Lords, this group of amendments comprises Amendments Nos. 31, 49, 50, 64 and 75. The amendments concern the powers of the commissioner to ensure that processing is being undertaken in accordance with the provisions of the Bill. We are very much aware, particularly from the views expressed in Committee, that it is important that we should get these powers right and that they should be sufficient but proportionate.

I shall discuss not only the amendment of the noble Lord, Lord Norton, and that of the noble Viscount, Lord Astor, but also the amendment in this group that has not yet been moved by the noble Baroness, Lady Nicholson, and also the Government's Amendment No. 50. As your Lordships will be aware, the commissioner is being provided with some significant new powers in the Bill: to serve information notices and to undertake assessments of good practice, but only with the data controller's consent. It must inevitably be a question of judgment as to whether those powers are sufficient and proportionate. On the one hand, the noble Viscount, Lord Astor, suggests with his amendment that the commissioner's powers are too peremptory; he suggests that she should have to try more informal methods before being permitted to issue an information notice. On the other hand, the noble Lord, Lord Norton, and the noble Baroness press the case for significantly more assertive powers. Clearly a balance must be struck. The commissioner needs effective tools for the job but data controllers need to be able to go about their legitimate business unhindered. These are both important considerations and we have thought about them carefully.

The amendment we propose to Clause 41 would remove the prohibition on the commissioner from making an application for a warrant while an appeal is being brought against an information notice. In bringing forward this amendment we have listened carefully to the case which the registrar has made that it would be unhelpful to fetter her access to the courts to request a warrant as the Bill does at present. We have found that case persuasive. If a circuit judge is persuaded of all the matters set out in Schedule 8, which provides important safeguards against inappropriate use, we agree that an outstanding appeal against an information notice should not be an obstacle to the commissioner's taking action. We are weighing the balance in the commissioner's favour on that issue.

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We have framed the commissioner's powers cautiously. We do not think it appropriate to seek to limit the commissioner's powers further and so we cannot accept the noble Viscount's amendment requiring the commissioner before serving an information notice to seek to resolve matters informally. As was emphasised to the Grand Committee, the commissioner must by law exercise her powers reasonably and for the purpose provided. She is not at liberty to exercise the power to issue an information notice unnecessarily or oppressively. I have every expectation that the commissioner will continue her present respected practice of seeking always to resolve matters informally where appropriate. However, we recognise that it may and will not always be appropriate and sensible to do so. In such rare cases she needs to be able to act. We are unwilling to hobble this power with mandatory preliminaries. That does not seem to us either useful or proportionate.

But I have to say that we are not persuaded either that it is right to introduce the non-consensual audit powers soon to be proposed by the noble Baroness, nor the more specific powers to check on exempt processing where Clause 28 is relied on. As we understand the amendment of the noble Baroness, she will propose that the checking to see whether good practice has been complied with can take place without the consent of the data controller. We have listened carefully to the arguments which have been put forward this evening and on other occasions for the desirability both of the powers suggested by the noble Baroness and the power suggested by the noble Lord, Lord Norton. We have also listened carefully to the contrary arguments which have been put to us over time. We think the balance lies in favour of not subjecting data controllers to the prospect of compulsory check-ups. These can be disruptive. Disruption has a cost. We are not convinced that there is a clear justification for asking businesses to bear this cost. We think the possible benefits of compulsory check-ups do not warrant it. We cannot agree to these amendments today.

We are, however, still listening. I said that the question of the powers of the commissioner was one of judgment and balance, of effectiveness and proportionality. I can say to the House today that the registrar is continuing to put ideas to us as to a more rounded-out information notice power which offers her additional scope for appropriate action without unduly limiting data controllers' liberty to go about their business. We shall see whether we cannot go some way further to accommodate these ideas and bring forward suitable amendments as soon as we can.

I hope that the amendment we bring forward today will be seen as an earnest of our intentions and that in the circumstances the other amendments either will be withdrawn or not moved.

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