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Lord Falconer of Thoroton: My Lords, I am grateful to the noble Baroness for returning to the subject of Clause 28(4). In effect, at this stage we are debating two amendments. The first would remove subsection (4) altogether and the second would leave it in place purely for tax and related purposes and exclude the reference to crime and the prevention of crime. That neatly crystallises the two big remaining issues concerning this subsection: namely, should it be removed altogether? Do we need it for any department's purposes? Secondly, if, as the Government have argued, it is required for Inland Revenue reasons, should our order-making power also embrace other departments in the area of crime and offenders? I will deal with those issues in turn.

First, does the Inland Revenue need this power? I remind the House that without the Clause 28(4) general exemption, as opposed to case by case exemptions, the Inland Revenue and hence honest taxpayers would suffer losses with information being revealed to suspect taxpayers about the nature and origin of material passed to the Inland Revenue by third parties such as banks and retail businesses and about the revenue's risk rules and scores under the new self-assessment tax system. The Inland Revenue would also be unable to receive information disclosed voluntarily; for example, by retailers helping them to identify potential ghosts and moonlighters.

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Since our debate at Report, the noble Baroness was kind enough to have a meeting with my noble friend Lord Williams and myself. I know also that she has been in contact with the Data Protection Registrar who is quite naturally concerned that we should minimise exceptions to the normal data protection law mechanisms. Since then, the Home Office has had joint discussions with Inland Revenue colleagues and representatives of the registrar.

Those discussions have been very valuable in further isolating the operational issues at stake and the extent to which there might be scope to meet them through other data protection law mechanisms. We have reached no firm conclusions, but both the Inland Revenue and the Data Protection Registrar's staff have agreed to explore a number of points further. Between them these bear on both of the principal mechanisms at stake, the subject information provisions and the non-disclosure provisions. I would very much like those issues to be explored further before the Government reach a view on whether any modification to Clause 28(4) is possible.

I should stress that this process is without commitment on either side. The Data Protection Registrar's staff have not dropped their general concerns about Clause 28(4), to which the noble Baroness, Lady Nicholson, gave voice in this debate; nor have the Government conceded that its scope can be reduced. We need to look further to see, with good will, what can be done. I am asking for that work to be done quickly so that there can be no delay in reporting back in another place and, in due course, bringing any appropriate fresh proposals back before the House.

I turn now to needs which may arise beyond the Inland Revenue's. The Government have been entirely open about it. At present--and this confirms what the noble Baroness said in relation to the police--the Inland Revenue is the only department which has sought an exemption. But one can imagine similar circumstances arising elsewhere. I note that ACPO's data protection committee has confirmed that it does not seek an exemption, but the police are not the only ones who handle data concerning crime, offenders and taxation.

I also have to say, with respect, that it would be unreasonably optimistic to think that whenever a future need arose there would be other convenient legislation, whether originating in Europe or elsewhere, going through Parliament, whose scope could accommodate data protection amendments. It does not work like that. Opportunities to amend data protection law in practice arise only rarely.

However, there is something more we could do now. Hitherto, we have frankly been loath to ask other departments whether they can foresee a need for a similar exemption because the very question might stimulate over-cautious responses. However, I think we have gone beyond the point of such niceties. The Home Office will now approach other departments generally, making clear the arguments put in this House for restricting exemptions of this kind and asking whether they have any other clear cases for exemption and if so what are their operational needs. If there are any other such cases, the Government would explain them in

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another place, and subsequently in this House, to bring out why we need the general order-making power. If there are no other such cases, we will look seriously at an amendment to restrict the scope of subsection (4).

I hope that the House will accept that this is a genuine offer to look again, dealing with both issues raised by the two amendments. Having made our further inquiries, we would come back to Parliament to explain the nature, if any, of our need. Pending that further work, I invite the noble Baroness to withdraw her amendments at this stage in the expectation of further information and assurances in due course.

Viscount Astor: My Lords, before the noble and learned Lord sits down, perhaps I may put to him a question and ask him to respond briefly. He has made a very genuine offer, which is not surprising because we know that the Data Protection Registrar is concerned about these powers and that the police do not want the powers and now we understand that the Inland Revenue is concerned about these powers. He has made a very genuine offer to look at the issue again, but of course with no commitment. Indeed, he cannot, as it were, bind his colleagues in another place.

The difficulty I have--I accept the reasonableness of the noble and learned Lord's argument and his genuine offer--is that if the noble Baroness withdraws her amendment the Bill will then go to another place. If the Government look at the issue and decide, for whatever reason, that they do not wish to alter the clause as it stands the Bill will not necessarily come back to this House and your Lordships will not have an opportunity to ask the Government here in this House why they changed their mind or why they did not change their mind. In those circumstances, it would seem to me reasonable if the noble and learned Lord were prepared to accept the amendment, or one of the amendments, along with his commitment to look at it again. That would ensure that the Bill would come back to this House after it had been in another place and your Lordships could then address the issue, listen to the, I am sure, reasonable arguments from the Government and hear the full consideration that they had given to this issue.

Lord Lester of Herne Hill: My Lords, I am not sure whether the noble and learned Lord the Solicitor-General has yet sat down; but if he has not yet sat down, perhaps I may supplement that question by a further one. The noble and learned Lord has already indicated in the context of an earlier amendment that the European Convention point has not been directly focused upon, for reasons I understand. Can he tell the House whether the effect of Clause 28(4) as it stands, authorising a possible breach of Article 8 of the European Convention on Human Rights by authorising a disproportionate interference with personal privacy, has been taken into account; and if not, whether the Government have it in mind that that too should be taken into account in considering this matter?

Lord Falconer of Thoroton: My Lords, the answer is that I had not sat down. In response to the noble

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Viscount, Lord Astor, what I have said to the House the Government will do involves in good faith both discussing the matter with the Inland Revenue and the Data Protection Registrar to see what can be done in relation to the Inland Revenue aspect and also making inquiries of other departments to see whether any other department wants it. I am not sufficiently experienced in the procedures of the House to comment on what he said the procedures are. However, assuming that what he said is correct, it seems to me that the House has to rely on the Government's good faith in doing that which they have said they will do. I respectfully suggest that there is no reason why the House should not rely on the Government's good faith in this respect. If the results of the investigations and the talks bear fruit we will then bring forward the appropriate amendments in another place. If they do not bear fruit, we will explain why not at an appropriate point to both another place and to this House.

3.45 p.m.

Viscount Astor: My Lords, I apologise for interrupting the noble and learned Lord again. If he goes for that process, which I accept is a quite reasonable process for the Government to go through, and finds that the Bill goes to another place and is unamended, your Lordships' House will not have an opportunity to see the Bill again. That is the point I was trying to make. I fully accept the genuineness of the noble and learned Lord's offer and the Government's commitment. However, the point I am making is that without a peg on which to hang a debate so that the Bill can come back, your Lordships may not be able to have such an opportunity.

Lord Falconer of Thoroton: My Lords, as far as a lack of a peg is concerned, there would plainly be the opportunity to explain to another place if the conclusion were reached that no such amendments were to come forward. As far as concerns this place, again, I am not sufficiently experienced in the procedures of the House to indicate whether or not an opportunity could be given for us to report back to this House as to why it was--

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