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("( ) the Technical Advisory Board,").

On Question, amendment agreed to.

Lord Bach moved Amendment No. 16:

(c) for the purpose of facilitating the carrying out of any functions in relation to this Chapter of the Interception of Communications Commissioner;
but before determining for the purposes of the making of any order, or the imposition of any obligation, under this section what arrangements he considers necessary for the purpose mentioned in paragraph (c) the Secretary of State shall consult that Commissioner").

The noble Lord said: My Lords, on behalf of my noble friend I should like to move Amendment No. 16. During the Committee's deliberations on the Bill, we gave a commitment to consider how best to ensure that the interception commissioner and his staff are able effectively to scrutinise any interception equipment designed and maintained in obedience to a notice served under Clause 12. Amendment No. 16 is designed to deliver on that commitment.

The noble Lord, Lord Phillips of Sudbury, spoke to Amendment No. 50A during the debate in Committee, an amendment which would have enabled notices to specify what should be done to provide the commissioner with reliable and verifiable technical means of fulfilling his duties. I am sure that the noble Lord will be pleased to hear that this amendment goes wider than that.

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First, it may apply to both orders and notices made under Clause 12. Secondly, it does not restrict the additional material they may contain only to ensuring reliability and verifiability: it enables them to deal with any matter which may facilitate the carrying out of the commissioner's duties. I hope that the amendment will be welcomed by the noble Lord and by all sides of the House. I beg to move.

Lord Phillips of Sudbury: My Lords, speaking on my own part, I am entirely content with the way in which the Government have dealt with this issue. I am grateful to the noble Lord.

On Question, amendment agreed to.

Lord Cope of Berkeley moved Amendment No. 17:

    After Clause 12, insert the following new clause--


(" . There shall be a Technical Advisory Board consisting of--
(a) up to six members appointed by the Secretary of State from among persons affected by section 12 of this Act, and
(b) up to six members appointed by the Secretary of State representative of persons specified in section 6(2).").

On Question, amendment agreed to.

Clause 13 [Grants for interception costs]:

Viscount Astor moved Amendment No. 18:

    Page 15, line 12, leave out ("may, if he thinks fit,") and insert ("shall").

The noble Viscount said: My Lords, I beg to move Amendment No. 18 and speak at the same time to Amendments Nos. 19 and 20. These are simple amendments to Clause 13, in which the Secretary of State is empowered to make payments. In two places we wish to replace the word "may" with "shall" and the word "appropriate" with "fair".

In Committee we had what was for some noble Lords a somewhat misleading debate on this matter. The Minister was trying to be as helpful as possible, but, when referring to Clauses 12 and 13, he said that he,

    "could offer some assurance to Members of the Committee that the allocation of costs would be addressed very clearly in that order".--[Official Report, 19/6/00; col. 59.]

He was referring specifically to the order to be made under Clause 12. He went on to say, most helpfully, that he would consult in detail on how it would work and that he would bring forward the relevant legislation.

However, when one looks at the provision covering the order in Clause 12, it does not in fact refer to costs at all. Subsection (1) refers only to obligations and says nothing about costs. When discussing the order, the Minister confirmed that the Secretary of State would have to have regard to subsection (3) of Clause 13. That is perfectly correct, but the order will refer only to obligations. It will not refer to costs incurred by the industry. The Minister said only that when the Secretary of State brings forward the order he will have to refer to costs. However, that is all that he will have

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to do: he will need to talk about costs, but they will not form a part of the order. We feel it is important that Clause 13 is strengthened to take account of that.

The Minister has already put the Government's view on costs in our previous debate, which was helpful. I shall comment on it only briefly. The Minister said that not all ISPs will have black boxes. Although that may be true, one of the difficulties we face is that the Government seem not yet to know which ISPs will have black boxes and which will not. It is certainly the case that the industry does not have a clue. Indeed, the industry does not even understand how this is going to work unless a universal system is put in place. If that is not done, businesses will simply bypass the system.

We know, after holding discussions with ISPs, that they employ different systems; some are linked, some are compatible and some are not compatible. This area is different from that of telephone systems and exchanges which for a long time have contained equipment for interception. However, it has always been possible to fit such equipment at source; namely, at the exchange. The same does not apply to the Internet industry.

Internet service providers are diverse. Some companies are large while others are quite small. The Minister stated that, in the case of small ISPs, the Government would try to be more generous. However, while we acknowledge those kind words, we must return to the point that we have only the Government's own estimate of costs at £20 million spread over three years. That estimate has not been in any way agreed by the industry. The noble Lord, Lord Stevenson of Coddenham, who is the chairman of a large company involved in this technology, remarked that, "Nobody knows what it will cost". I think he is right. It is all well and good for the Government to declare that £20 million will be made available over three years, but one knows exactly how government systems work. The money will run out after the first year. A company will come along after that and be told by the Government, "We are very sorry. This is what we promised and we cannot go back to the Treasury".

We know that costs will be incurred by the industry to maintain and upgrade the equipment. Clause 13 contains no "right of appeal" against those costs unless one opts for judicial review. Noble Lords know how expensive and time-consuming is that process. The powers contained in Clause 13 have been described by some as a form of "Internet tax". The Government might consider that a little unfair, but that is how the provisions are perceived.

If we are to satisfy some of the concerns expressed by the industry, we must look again at Clause 13 where it states:

    "The Secretary of State may, if he thinks fit, make such payments".

That is too wide. The industry must know that the Secretary of State will do it. Noble Lords will be aware that, with the best of intentions, Ministers express an intention. However, it is only an intention--not

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something that is to be found in primary legislation. Therefore, the amendments to which I have spoken are necessary for the purposes of the Bill. I beg to move.

Lord Phillips of Sudbury: My Lords, I support entirely the words of the noble Viscount. These amendments are absolutely minimalist. To contend with the immense underlying unease about the sharing of cost, if it be shared, these amendments could not be more modest. If the Government are not prepared to accept these amendments, we shall be on a collision course, not least because there is no requirement under the clause to lay any kind of order. In any event, the amendments do not impose on the Secretary of State any specific requirement but merely tighten up to a significant, but not excessive, degree the objectivity of the judgment that he or she must bring to bear in deciding what grants to make under the clause.

I shall be grateful if in his response the Minister can confirm my impression that the words of the noble Lord, Lord Bassam, a few minutes ago were intended to reassure the House that the recommendations of the Smith report with regard to these wonderful black boxes--namely, that the Government would pay for the design and software development--have been taken on board by the Government. The noble Lord did not make specific reference to that, and I should be grateful if he would deal with the matter in his response. Plainly, that is germane to the burden which business may be called on to shoulder.

Lord Cope of Berkeley: My Lords, before the noble Lord sits down, does he agree that paying for the initial development of the software and so on is one thing? The Minister was not even specific about that because his comments were hedged about with all kinds of subsections. The Minister said specifically that the Government would not pay for the upgrades at all. In times of rapidly changing technology, upgrades can in some cases be the expensive bit.

Lord Phillips of Sudbury: My Lords, I am delighted to confirm entirely what the noble Lord says. That is another reason why these minimalist amendments should be accepted without demur.

7.15 p.m.

Viscount Goschen: My Lords, I agree with the noble Lord, Lord Phillips of Sudbury, that if the Government are not prepared to accept these amendments we shall have real difficulties. These amendments still provide considerable scope for interpretation. The word "fair" cannot be pinned down and defined very well. If the Minister uses that as his only defence, I suggest that it is a self-defeating argument which will encourage my noble friends on the Opposition Front Bench to return with much stronger amendments than the ones we are considering tonight.

I welcome the initiative of the Government in trying to inject additional clarity into their approach to funding the equipment, the running costs and the whole process of interception. It was helpful that the

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noble Lord came before the House and said what he did. It was very strange that at previous stages of the Bill the Minister was unable to make any comment on the Government's approach to funding. However, by putting forward the figure of £20 million he has set more hares running than he has managed to corral. As we have heard around the Chamber at this and previous stages of the Bill, there are greatly differing estimates of the cost of installing the interception equipment. The figure of £20 million may be a very small percentage of the overall cost and put the burden fairly and squarely on the operators. Like the noble Lord, Lord Phillips, and my noble friend Lord Cope, I find it difficult to square that with the Government's more generic statements about their approach.

I am at a loss to understand the noble Lord's argument about the number of ISPs to which these provisions will apply. The noble Lord approaches the matter in a vague manner and makes the generic statement that we should not worry because it will involve only a few, without saying which ones it is likely to be. He says that perhaps it is just a sample. I do not see how the Minister can make such vague statements and yet come up with a specific funding proposal of £20 million. If the provision is to apply to only a small percentage of ISPs, £20 million may or may not represent a significant percentage of the cost. The provision may apply to many more ISPs than the noble Lord indicates. The Minister puts forward no evidence at all to justify his stab (if I may so describe it) at the number of ISPs which will be required to install the equipment. We are groping in the dark. The noble Lord simply lights a very small candle and tells us not to worry because it will show us the way. My noble friend's amendments are modest. The amendments inject a greater degree of clarity about the burden on the Secretary of State and I wholeheartedly support them.

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