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Viscount Astor: My Lords, I am grateful to the Minister for his reply. The Delegated Powers and Deregulation Committee looked at this matter which is subject to the affirmative procedure. The committee looked at it from a powers point of view. I was asking the noble Lord to explain the Government's thinking as to why they might need that power. I have been given an explanation. The noble Lord explained that it will be limited by Article 8 and so on and why the Government need the power. That is extremely helpful and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 22 [Form and duration of authorisations and notices]:

Lord Bassam of Brighton moved Amendment No. 34:

The noble Lord said: My Lords, in moving this amendment, I shall speak also to Amendment No. 35. As the Bill stands, both authorisations and notices to access communications data may, subject to the other requirements placed by Clause 22, take such form and be granted in such a manner as the authorising officer thinks fit.

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Government Amendment No. 34 would remove that subsection relating to authorisations to access communications data, which we now believe is unnecessary. Although it would have provided extra flexibility to authorising officers, we believe it is better to provide central guidance, including standard forms where possible, in the code of practice. That will also be beneficial from an oversight point of view.

Amendment No. 35, tabled by the noble Lord, Lord Cope, would have precisely the same effect in relation to notices served upon holders of communications data, and for that reason I am happy to accept it. Although a specimen notice does not appear in the preliminary draft of the code which we have published, we have made it clear that following consultation regarding the precise form of the notice, a specimen will be included in the draft which goes out for public consultation.

I believe that the noble Viscount and I are as one. Our amendment will be helpful and effective and the amendment tabled by the noble Viscount adds to it. We are happy to accept his amendment. I beg to move.

Viscount Astor: My Lords, I am always delighted to be as one with the Minister. I am extremely pleased that he considers that Amendment No. 35 adds to his amendment. This is an important issue. In paragraph (f) we were concerned that there were wide powers that were not subject to the scrutiny that existed on the previous amendment that we discussed.

On Question, amendment agreed to.

10 p.m.

Viscount Astor moved Amendment No. 35:

    Page 26, line 8, leave out paragraph (f).

On Question, amendment agreed to.

Clause 24 [Interpretation of Chapter II]:

Lord Grabiner moved Amendment No. 35A:

    Page 27, line 25, at end insert--

("( ) the Commissioners of Inland Revenue;").

The noble Lord said: My Lords, before explaining the purpose of this amendment, I apologise to the noble Lords, Lord McNally and Lord Phillips of Sudbury, for not having discussed it with them in advance. Yesterday I briefly mentioned it to the noble Lord, Lord Cope of Berkeley. It has only just come to my attention that it may be appropriate to use this Bill to deal with this point rather than for it to be dealt with through the exemption procedure under the data protection legislation or in the Finance Bill, or by way of delegated legislation under paragraph (f) of Clause 22(2). So there are other ways in which the matter could be dealt with.

The purpose of the amendment is to give effect to one of the recommendations that I made in my report on the informal economy to my right honourable friend the Chancellor of the Exchequer in March this year. The amendment would provide a primary statutory authorisation that would enable the Inland Revenue to conduct reverse searches of telephone

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number databases; in other words, the Inland Revenue would be able to obtain the name and address of a person holding a certain telephone number.

I should say something about the background. Currently the Inland Revenue has wide powers to access information from outside government, for example, details of payments (names, addresses and amounts) made by a business for the supply of services; names and addresses held on statutory registers, for example, vehicle registration details from the DVLA; and full particulars of interest credited to bank or building society accounts in the United Kingdom.

If Inland Revenue investigators were entitled to reverse search in the way that I have described, they would be able to follow up advertisements for goods and services that give contact telephone numbers but not personal details. We are all familiar with advertisements in local newsagents, local newspapers and, unfortunately, advertisements in telephone kiosks. It would be possible for the Inland Revenue to check whether the subscriber was registered for tax or perhaps claiming statutory benefits. It would be a quick and effective method of targeting investigations.

For noble Lords who know about such matters, it will come as no surprise to hear that telephone directory databases can already be purchased on the Internet and stored on CD-ROM in a format that can be searched and reverse searched using a standard desktop computer. That practice has raised some concern about data protection; that is, that reverse searching is interpreted as not constituting "fair" processing under data protection law on the footing that the personal information, absent specific informed consent, was not supplied for that purpose in the first place.

There are obviously circumstances where that concern must give way to an overriding public interest, which may be, for example, to contain fraud or to protect the public purse. Accordingly, the data protection legislation contains public interest exemptions; for example, the Data Protection Act 1998, Section 29. As a result, the emergency services are able to carry out reverse searches on all numbers which have been used to dial 999. It is also the case that Customs and Excise investigators have been making reverse searches of the telephone directory for many years, and all requests for a search are channelled through a single point of contact at the Customs and Excise National Co-ordination Unit.

It seems to me that it would be a desirable and valuable extension to the existing investigatory powers of the Inland Revenue to have the benefit of Amendment No. 35A. I believe that it is in the public interest that the Revenue should not be hamstrung in its endeavours to protect the public purse. In accordance with the procedures which have been adopted under the existing data protection legislation, it would be desirable to have suitable guidelines in the form of a code of practice. I beg to move.

Lord Cope of Berkeley: My Lords, the noble Lord, Lord Grabiner, is obviously particularly experienced

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in these matters because of the report he prepared, to which he referred, on the so-called "informal" economy--an odd way to describe the phenomenon, but we will not go into that at the moment. In particular, he made a clear case for the Revenue to be able to undertake reverse searches of telephone data.

But I am not sure that that is the effect of Amendment No. 35A. I am now becoming hesitant because the rules of Report stage mean that I am supposed to speak before the Minister, who will be much more authoritative than I on this matter and it is possible that, closet lawyer though I may be, I have misread the Bill. Amendment No. 35A seems to give the Inland Revenue access to all communications data and not just traffic data. I am not quite sure where reverse searches of the telephone directory fall, whether under traffic data or communications data. Now that we are rewriting the Bill to distinguish between those two, it becomes important.

One other aspect of this issue caught my eye; that is, the contrast between the Commissioners of Customs and Excise and the Commissioners of Inland Revenue. To those of us who have been involved in conventional types of business, Customs and Excise is seen mainly in terms of VAT and it may seem odd that the department which collects VAT, excise duty and so forth, is to be given these powers and, according to the Bill, the Inland Revenue is not. I fancy that, as much as anything, the reason is historic. Customs and Excise is a considerably older department and that is why Customs and Excise provisions appear first in finance Bills. Also it has a long history as an anti-smuggling agency, which at one time was an extremely rough business, and still can be. It was an armed service. Most of the older Customs Houses have a glass case somewhere with the odd musket or two and cutlass in it. The Inland Revenue never had powers of that character whereas Customs and Excise traditionally had.

The situation is partly historic but partly also has to do with the fact that those working for Customs and Excise spend a great deal of their time engaged in international matters--anti-smuggling matters--of a very important nature, which include drugs and all things relating to excise duty, and so on. Given that it is in part historical, it also partly reflects the international nature of many of the operations of the Customs and Excise by comparison with those of the Inland Revenue. However, when one considers the VAT/income tax comparison, it is still odd that the two departments should be treated differently. I am not sure that I can logically justify such treatment in those terms.

I spoke earlier about the difference of treatment as regards external and internal communications, which has continued into this Bill. That is perhaps another example of treating our own citizens within the country more softly, as it were, than those who are doing international business and who are, hence, potential smugglers, so to speak. Customs and Excise is not called the "Outward Revenue" or the "Overseas Revenue", but, in a sense, that would be the true

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contrast to the Inland Revenue. It would also express the historic role of the service, though not its current role.

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