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Lord McNally: There were a large number of reassurances in the Minister's reply. As I said, the intention of these amendments was to try to tighten up and clarify these procedures. Some of the amendments have indeed been overtaken by the Government's own amendments.

Regarding the amendments tabled by the noble Earl, Lord Northesk, they look similar and are probably better than ours. I beg to leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 146 to 149 not moved.]

Lord Bach moved Amendments Nos. 149XA and 149YA:

("( ) must specify the office, rank or position of the person who for the purposes of Schedule 1 granted permission for the giving of the notice or (if the person giving the notice was entitled to give it without another person's permission) must set out the circumstances in which that entitlement arose;").

    Page 50, line 34, leave out paragraph (e).

On Question, amendments agreed to.

Lord Lucas moved Amendment No. 149ZA:

    Page 50, line 36, at end insert--

("( ) may contain a requirement as described in section 50(1), and may in exceptional circumstances forbid the taking of action to preserve the confidentiality of other communications;").

The noble Lord said: I shall not press the amendment. If the Minister wants to comment on it, that is up to him. Neither shall I speak to Amendment No. 162A in the group; we have covered that subject. The amendment merely suggests another way in which, in the tiny number of cases in which the key will be demanded, we can obtain high-level authorisation. If it cannot be obtained from a judge, it should come from the interception of communications commissioner.

I shall speak to Amendment No. 176ZA with Amendment No. 171 because the two go together. If the Minister wants to comment on them now, I shall listen to him with great interest. I beg to move.

Lord Cope of Berkeley: My Amendment No. 178 refers to the secrecy of a key once it has been obtained. It is most important that all concerned should be reassured about that. If the Minister can point to a provision in the Bill which places a duty on the authorities concerned to maintain the secrecy, I shall not press my amendment. However, it is important that the provision is written into the Bill somewhere.

Lord McNally: Amendment No. 179 is almost identical to Amendment No. 178. I say merely that the

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representations I have received indicate a real concern about the security of the key once it enters the government machine, partly because it undermines international confidence. Part of the problem with the Bill relates to differences of perception. The men or women in Whitehall are confident that their remarks and assurances will satisfy any reasonable person who knows how Whitehall or public bodies work, but it is not reassuring to those who are dealing with international companies or trying to maintain business confidence. These are important issues and, like the noble Lord, Lord Cope, I look for guidance and assurance from the Minister.

Lord Bassam of Brighton: I shall deal with all the amendments in the group, from Amendment No. 176ZA onwards. That amendment covers ground to which we will come when we discuss the amendments relating to the tipping-off offence. I believe that the concern is that some legitimate action will be caught by the tipping-off offence. When we come to the group of amendments, I shall explain why, for example, revocation of keys--a device for ensuring the confidentiality of systems--does not fall foul of the offence. Similarly, Clause 51 does not prevent or penalise other legitimate action taken to preserve confidentiality.

Amendment No. 149ZA is most perceptive. I believe that the noble Lord is seeking to be helpful with his proposal. We had thought about including such a provision in the Bill, but, in the event, we decided against it. We believe that there would need to be some kind of additional test for forbidding such action, perhaps including "reasonable" and "proportionate", as well as "exceptional". Again, it is a question of the delicate balancing exercise which we hope we have constructed properly.

In some instances we are simultaneously criticised for being too draconian in the Bill and for not giving law enforcement officers sufficient powers. It is difficult to get the balance right. Certainly it is difficult to satisfy both ends of the argument. Therefore, we decided not to proceed with a provision along the lines of that set out in the noble Lord's amendment. However, we hint at it in Clause 50(4)(b) as part of the defence where particular software is designed to disclose the fact that a key has been revealed. However, I am grateful to the noble Lord for having raised that particular point.

From my understanding, Amendment No. 162A tries to add an extra safeguard in cases where keys may be required under a disclosure notice. However, the interception commissioner will not necessarily be the appropriate oversight point for all cases where a key may be demanded. We believe that that nullifies the intended effect of the amendment.

I turn to Amendments Nos. 178 and 179. I appreciate the spirit behind these amendments. In particular, I take the point made by the noble Lord, Lord McNally, about international confidence. He is right. It has much to do with perceptions. Perhaps we have embarked upon this erroneously, but I believe that all Members of the Committee can be helpful in

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trying to add that reassurance to the Bill. That is why I particularly welcome the spirit behind the amendments.

As Members of the Committee will be aware, we resisted a similar amendment in another place. However, as with the other issues connected with Part III, we recognise fully that the question of secure handling of keys is of critical importance. I am happy to set out our position again.

First, it is worth stressing that we understand the need to store securely all sensitive material obtained under the Bill. As regards keys obtained lawfully under Part III, Clause 51 already sets out strong safeguards which govern the retention, copying, destruction and treatment generally of material otherwise obtained under the new powers. I believe that the safeguards are described in very practical terms.

We are not convinced that the addition of the word "safely" is at all necessary. As I said, we set out in practical terms the safeguards provisions which must be in place; for example, with regard to limiting the extent of disclosure. Similar considerations apply to the sensitive material obtained under interception warrants. It is the case now that material obtained lawfully under existing interception powers is held very securely. The reasons for that are plain to see. However, as with the case for Part III, the relevant safeguards provisions which cover interception in Clause 14 of Part I do not contain a specific requirement for material to be held safely. I believe that that point was debated earlier in Committee.

The safeguards arrangements in Clause 51 will be overseen by independent commissioners who will have a statutory responsibility to examine the adequacy and veracity of the arrangements and to report on inadequacies to the Prime Minister directly. However, that said, industry and the public at large will undoubtedly wish to be reassured that, over and above what appears on the face of the Bill, the Government are taking very seriously the issue of protecting keys. As I said, we believe that to be of fundamental importance.

Deploying the highest level of protection for keys and other sensitive information relating to key holders is a specific objective of the technical project to establish the dedicated resource--the Technical Assistance Centre--which we are putting in place to assist law enforcement in relation to encryption.

As Members of the Committee will have seen, the Chancellor of the Exchequer has made available to the Home Office £25 million of modernisation capital to establish that facility. Work is in progress. Security is paramount, including the security of data and keys being transported to the centre, whether physically or electronically. The commissioners will have access to the facility. It is essential to provide reassurance that it is properly executing functions derived from the legislation.

Clause 51 already sets out strong safeguards governing the handling of keys. We take the issue seriously. Questions of technical, physical security are being taken forward by the project to establish the

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TAC. I hope that, with that fairly lengthy explanation, for which I apologise, the noble Lord will feel able to withdraw the amendment.

9.30 p.m.

Lord Lucas: I am grateful for that explanation. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Earl of Northesk moved Amendment No. 149A:

    Page 50, line 37, leave out ("the time by") and insert ("a period, not exceeding 40 days, within").

The noble Earl said: With your Lordships' leave, I shall speak also to Amendment No. 150A.

I concede that my choice of 40 days is arbitrary. I am not wedded to it. Indeed, dare I say it, I am more comfortable with the Liberal Democrat amendments.

The fundamental point on subsection (4)(f) is that the timetable for compliance should be reasonable. At least to that extent, these are probing amendments. I should be grateful to hear the Minister's views on the appropriate timescale. The underlying principle--that a Section 46 notice should have a reasonable timetable for compliance--is a sound one. I beg to move.

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