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Lord Lucas: The noble Lord, Lord Phillips, made a good point and criticised me, as indeed, did the Minister, for being absolutist in the amendment. It was tabled in that form, as much as anything else, to draw out from the Government what their position was. In that it has not succeeded.

I share the criticism of the Government of my noble friend Lord Goschen. Even in describing the process which they will adopt, they have not given a hint of what will be their opening position in the discussions which, rightly, they will have with the industry on the meaning of the word "appropriate". I understand that the Government do not want to have something set down in stone on the face of the Bill. These discussions are always ones in which the particular has to be looked at and a fair amount of detail has to be gone into. There are good arguments, such as those put forward by the noble Baroness, Lady Thornton, and others, that the industry should perhaps bear some of the cost. However, in being asked to pass this wording

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in the Bill, the Government are not prepared to say what will be their opening position in the negotiations. Does "appropriate" mean about half, or about nothing?

6.30 p.m.

Lord Bassam of Brighton: The noble Viscount, Lord Goschen, suggested that business may be transferred overseas. I apologise for not accepting that possibility; I do accept it. But there is no evidence as yet that that is likely to be the case. There is a deficiency in the approach adopted, not only in the debate this evening, but also in the public debate, which goes back to the comment made by the CBI. If the industry adopts an alarmist position at this stage in order to force more costs to be covered by the Government, it could be self-defeating and in neither the industry's, the Government's nor indeed the public's best interests. So, although I accept the possibility, I do not accept that that should end up being the case. We believe that we shall get the balance right. We shall have the detailed consultation to take into consideration.

The noble Lord, Lord Lucas, said that we are not providing the detail in addressing this aspect. However, we issued a point-by-point refutation on the whole cost issue. The allegation was that we would impose black boxes. But that is only one suggestion. It has not been decided. The likelihood is that we shall not expect all ISPs, for instance, to carry an intercept capability. So the burden of costs envisaged by many of the detractors with regard to this part of the legislation does not exist to the extent suggested in certain alarmist quarters.

Lord Lucas: Does the Minister mean that some ISPs will bear the cost burden and draw the short straw and others will not?

Lord Bassam of Brighton: It is not a question of drawing a short straw. As I understand it, there are 400 ISPs in the UK at the moment. The cost assessment built up in opposition to the Government's position assumes that all 400 will be obliged to possess an e-mail active intercept capability. We do not necessarily accept that that is the case; it may be far from the case. It may be that only the largest ISPs will bear part of the burden of cost.

We have to look at the detail. We have to consult the industry in order to get the balance of costs right. Trying to establish that in legislation would be unique. I am sure that the noble Lord, Lord Lucas, accepts that point. I accept that he is trying to flush us out on where we feel the balance is; but the matter is best left to the detailed consultation which all Members of the Committee have said that we should conduct and carry out. We are committed to that process.

Lord Lucas: If there are to be detailed consultations with the industry, and therefore almost with the public, why not share with us the opening position? It cannot possibly damage the Government to tell us what they intend to tell hundreds of other people, if not now then very shortly. Will not the Minister reflect

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that fresh in all our minds is the Government's oft-avowed accuracy in assessing the cost of building the new Scottish Parliament building? We must all recognise that estimates often bear little resemblance to the final outcome.

Lord Cope of Berkeley: I view this as a most unsatisfactory debate, particularly from the parliamentary point of view. Parliament is being devalued. We are being asked to accept a lot of highly generalised assurances from the Minister. I noted three: "We will not be unreasonable"; "Fears are not well founded"; "We have good intentions". They are all honeyed words but mean very little. The more the Minister said, the more it became clear that either the proposals are not being shared with us or, as I suspect, they are as yet unformed and loose. That is why there is this huge potential disparity in the cost which Parliament is being asked to take at face value.

Perhaps I may respond to the noble Baroness, Lady Thornton. She said that she did not feel that e-businesses were bearing their share of responsibility and that we were arguing only on behalf of such businesses. But it is not only e-businesses which are involved; it is the whole of business. After all, the chambers of commerce, the CBI and the Institute of Directors are complaining, and The Times, the Financial Times, the Observer and the Guardian, all say in different ways that these proposals, desirable as they are--we all believe it to be desirable to use this method to catch criminals--are insufficiently developed and still contain snags. Yet we are asked in this clause to support a blank cheque.

On the question of the number of Internet providers, the noble Lord, Lord Desai, said that he thought that the provision would include all ISPs. But that is what is worrying; it will not. There is nothing in the Bill about this. The general assumption was exactly the same as the noble Lord's; that is, that the provision would include all ISPs, at least over a period. The chambers of commerce report worked on the assumption that the interception regime would involve 20 large ISPs and 100 small ones--that is pretty well most of the industry. But the Home Office said that that is a gross over-estimate, perhaps by as much as a factor of 10. That is to say, only one-tenth of the ISPs will be subjected to this regime; presumably, that is one-tenth of the large businesses and one-tenth of the small ones. I find that surprising. But it shows how difficult it is to get at the cost and to know exactly what is proposed.

My noble friend Lord Lucas said that if this £20 million--the Government's estimate--is going to be imposed on only one-tenth of ISPs, it will cause grave difficulties. The others will be at a competitive disadvantage because they have not been approached.

Lord Bassam of Brighton: Perhaps the noble Lord, Lord Cope, will give way on this point. At the moment we do not require all public telecommunications operators to possess an intercept capability. If the noble Lord is saying that it is unreasonable to expect

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only a small proportion of ISPs to bear the cost, he must be saying also that it is unreasonable that only a small proportion of PTOs currently bear the cost. The two situations are broadly comparable. The noble Lord should reflect on that point, otherwise he misunderstands the way in which these things are intended to operate.

Lord Cope of Berkeley: I shall certainly reflect on it and ask others to do the same. After all, the vast majority of telephone traffic goes through very few hands. That may explain some of the figures given by the Minister in that respect.

The noble Lord, Lord Phillips of Sudbury, asked a simple question in this regard. No detail was given and no approach was made in principle to answer his question. "It will all be considered before we reach secondary legislation", said the Minister. Of course, there will be a further opportunity to discuss it at that stage, when the stable door has more or less shut. But we all know the difficulties of secondary legislation.

I shall not press this amendment tonight. It merely sought to probe what the Government intend. We have found out practically nothing in that regard. I am sure, therefore, that we shall return to this matter on Report. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 56 had been withdrawn from the Marshalled List.]

[Amendment No. 57 not moved.]

On Question, Whether Clause 13 shall stand part of the Bill?

Viscount Astor: The debate on the two previous amendments was very disappointing from our point of view; indeed, we received no proper answers--answers that this House deserves--from the Government. I should like to use this debate for the purpose of asking the Minister a question. If I receive the answer that I expect, I shall then put forward a suggestion for him to consider.

It is perfectly obvious now that we do not know how many ISPs will need to have a box and what the cost will be. The Minister has said that that may not apply to all of them, but that is rather like saying that there will be intercepts only in London and the South East, not elsewhere in England. The system really does not work like that for ISPs; they are all intermingled. I do not see how anyone can know the answer. As the noble Lord, Lord Desai, suggested, they will probably all have to have one at some point or another.

We have heard nothing about what the costs will be and have received very little information. It is not just a matter of the burden of such costs for industry; unless we get this right, the situation will drive business overseas. As a simple example, let us look at the betting industry in this country. At present, the Treasury imposes what the industry considers to be a high tax on betting turnover. In almost an instant, the industry has managed to transfer a large part of its business via data communication lines to Gibraltar,

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Malta, the Caribbean and various other points across the globe. Such places are completely outside our law and thus no revenue is collected by the Treasury.

If the same analogy were to apply to this case, instead of being able to have the intercepts and thereby stop the pornography available through such services, as the noble Baroness would wish, we should not be able to do anything at all because it would all be based offshore. Therefore, the Government would have shot themselves in the foot because the legislation would not work--

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