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Baroness Thornton: I do not wish to stop pornography. I wish to make sure that the Internet is safe for children. Those who wish to indulge in watching pornography, or whatever, would be able to do so, but I should like to be sure that children--and others we do not wish to have access to such services--are safe.

Viscount Astor: I entirely accept what the noble Baroness said. But if it is to be safe for children, it must be regulated. It will not be regulated if we drive it overseas.

Clause 13(1) says that the Secretary of State,

Thereafter, subsection (1)(b) refers to the word "appropriate". We have heard that the Minister cannot tell us what is appropriate because he does not really know. It might amount to a contribution. But will there be a limit on the cost, of, say, the net revenue of a company? What happens if there is a major disagreement between the Government, the Home Office and the industry on what is, and what is not, appropriate? Is there any form of right to arbitration or an appeals system within the Bill relating to this clause?

If we are to rely on this consultation and, indeed, on secondary legislation, it seems to me that the industry may, in effect, have to agree to a blank cheque. I suspect that there is no right of appeal beyond, I suppose, judicial review--governments are fond of saying, "Well, you can always go to judicial review"--but, in reality, we all know that such a process is so expensive, lengthy and time consuming that it often never happens. I am sure that the noble Lord, Lord Phillips, as a lawyer, will back me up on that point. Moreover, judicial review rarely works. People do not have the time or the money to make it work.

If I am right in thinking that there is no form of mechanism that the Government and the industry are going to negotiate, what would be fair for both sides? Will the Government consider some form of mechanism being added to the Bill which will then give some assurance to the industry that it will be treated fairly?

6.45 p.m.

Lord Phillips of Sudbury: I have one comment to add. We agree with Conservative noble Lords about the unsatisfactory nature of the Government's reply to the amendments within the grouping under Clause 13.

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Is it fair? No, I shall rephrase that: it is fair. Can the Minister tell us in time for an amendment to be tabled and, if necessary, divided upon, just what the Government's broad strategic proposals are vis-a-vis the sharing of costs under this Bill? That seems to me to be entirely proper and right. Will the noble Lord please give a commitment to do so?

Lord Lucas: I entirely support what the noble Lord, Lord Phillips, has just said. The Government have said that they will disclose this information to the industry, so they must disclose it to Parliament. If they are going to open negotiations with the industry and discuss draft secondary legislation, that must involve revealing their position as regards what they believe they will do when faced with the question of who should bear the capital costs.

I have one question to ask and two points to make. Will the Minister let us know before Report the current capital costs of telecommunications interception? The noble Lord made much of the fact that these costs are currently borne by the industry, but how much are they? As far as concerns suggestions about what to do with this clause, as I said previously, it does not fall under anyone's supervision. Might it provide a way forward if we brought the Secretary of State under the supervision of the interception and communications commissioner as regards his reasonableness? Alternatively, if we changed the word "appropriate" to "fair", would the noble Lord consider that to be fair?

Viscount Goschen: I suggest that the mood of the Committee on the matter is very clear in terms of agreement with the noble Lord, Lord Phillips, and the extremely simple and straightforward proposition that he put to the Minister. The Minister must be in a position to come to this Chamber and give, as the noble Lord, Lord Phillips, put it, his overall strategic view on the matter. We are not talking about cutting this down into fine detail; we are talking about how the Government would handle the matter. Without that information, how can noble Lords do anything but fear the worst? Indeed, the noble Lord may even find himself facing an amendment that attracts a good deal of support in the Chamber. That situation could be avoided if the noble Lord were to agree to come forward with more information.

Lord Desai: I do not wish to tackle the problem of the cost and who pays it; indeed, that does not really concern me very much. But I should like clarification on one point. As an economist, I imagine that some ISPs are fitted with intercepting machinery. It would pay any criminal to find out those concerned and then go to other ISPs. So, behaviourally, it would seem to me that you cannot have some people with intercepting equipment and not others. That would actually defeat the purpose of the legislation which is to find out where criminals are sending their messages across. They may currently go to the 10 largest, but, as soon as they are intercepted, the 90 smallest will suddenly become large. That is the logic of the

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situation. I am worried about that more from the point of view of meeting the purpose of the Bill, rather than on the question of how much it will cost.

I have one further technical point to make. Marginal costs have been mentioned. It will very much depend on whether or not the marginal costs include the depreciation of capital equipment. The fast obsoletion of equipment and not the cost of it may go into those marginal costs. If something becomes obsolete in two years, you could easily write off 50 per cent as a marginal cost. Marginal cost is a very tricky concept, as are many others in economics. When my noble friend enters into negotiations, I hope that he will play a cool game.

Lord Bassam of Brighton: In speaking to Clause 13 stand part, I shall attempt to address the points that have been reasonably and fairly made from all parts of the Chamber. I begin with the issue raised by the noble Viscount, Lord Astor, as to whether there is some form of independent arbitration under the Bill. The noble Viscount is right to suppose that no appeal mechanism is available. However, it is important to point out that there is the possibility of a Secretary of State's decision being judicially reviewed. It is also fair to point out that the Secretary of State can enforce that decision only through the courts. So the Secretary of State has to weigh up such issues most carefully. However, I do not think that that will happen. I repeat that we shall be reasonable and proportionate in considering how costs are apportioned.

I have read Clause 13 and subsection (3) of that clause. I can understand that the Committee does not like the term "appropriate". However, it is a flexible term and has been included for that purpose.

Lord Phillips of Sudbury: I am grateful to the noble Lord for giving way. He provokes my legal instincts. It is rare to hear a Minister of the Crown encouraging the Opposition to beat a hasty retreat to the High Court for a judicial review. I am also astonished that the Minister should hold out any hope of anyone obtaining a remedy in the High Court under Clause 13 of the Bill. The wording is so woolly that I do not think even a shepherd on the hillside would give a remedy. Clause 13(1) states:

    "The Secretary of State may, if he thinks fit, make such payments . . . as [he] considers . . . an appropriate contribution".

That provision is so heavily weighted in favour of the Minister's virtually uncontrolled discretion that I would not advise any client to pay me money to go anywhere near the High Court for a judicial review, whether it was a question of tuppence ha'penny or £200 million.

Lord Bassam of Brighton: I am disappointed in the noble Lord's lack of confidence and faith in the judicial process.

Lord Cope of Berkeley: It is a question of his faith in the Bill, not in the judicial process.

Lord Bassam of Brighton: That may well be part of it but it seemed to me that the noble Lord rather

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doubted that any court would give fair consideration to the case brought before it. Knowing the strength of our judicial system, I cannot believe that that would be the case.

Viscount Goschen: I am not a lawyer. I am as far from being a lawyer as it is humanly possible to be. I have listened to the discussion with great interest. However, the Minister must accept that we in this building are making the law which the courts will then interpret. I do not think that he can put the blame onto the courts for the badly worded Bill and say that the courts are no good if you cannot get the right judgment out of them. We have the opportunity in this Chamber at this and subsequent stages of the Bill to rewrite the provisions to make the wording less woolly and to enable the judicial process so beloved of the noble Lord, Lord Phillips, to work properly.

Lord Bassam of Brighton: I live with a lawyer and she always argues that these questions can be subjected to the important test of reasonableness. I intended to be a little more helpful. I ask the Committee to bear with me. I shall be unhelpful initially but I shall be helpful later.

I believe that the noble Lord, Lord Lucas, encouraged me to reveal the capital costs of telephone interceptions that are currently met by PTOs. On consideration I cannot tell him that for two reasons. First, it would compromise the commercial confidentiality of those who are involved. Secondly, from a security point of view, it would become obvious who does not have that capability. Those two points bear careful consideration and thought.

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