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Baroness Thornton: My Lords, I listened to the debates both yesterday and today. Several noble Lords made contributions on the basis of how industry perceives the problem. I am worried about that. Clearly, future investment depends on how people perceive the framework around this issue. Noble Lords opposite say that the way in which industry perceives the matter is a justification for not making the kind of effort proposed in the legislation. But perhaps industry's perceptions are wrong and the issue that noble Lords should tackle is industry's perceptions. There has been a huge amount of lobbying from the Internet industry. Perhaps noble Lords should ask questions of the Internet industry. Perhaps they should say, "You perceive that there are these problems, these threats and so on that discourage people from investing. But what do you think are the answers to these issues?".

For example, yesterday, I visited the website of the organisation run by Mr Caspar Bowden. I looked at the organisations that are involved in his campaigning and the work that he has done on the Bill. I noticed that not a single childcare organisation or organisation involved with the education of the young and their relationship to the Internet is involved in his campaign. That is very worrying indeed. Does industry gain its perception from those who do not reflect the users about whom we are concerned--the children, the young and those who are vulnerable? I ask noble Lords to address the issue of the perception problem of which they have made so much in the past few days.

Lord Lucas: My Lords, with the amendment we come to what I see as the one remaining major difficulty with the Bill. How can a reputable international business be sure that its keys, or such keys as it keeps in this country, will be properly treated? When thinking where to place one's jewels in a safety deposit box, one might hesitate before choosing Harrods. All the systems, safeguards, contracts and guarantees can be in place, yet perhaps there remains an element of mistrust. That is what the Bill, as it stands, introduces into the thinking processes of international businesses. When an international business is faced with deciding where to place its centre of business, which is where the keys will be stored, generated and maintained, will it choose a country where those keys at all times remain in its possession and under its control, or will the keys be kept where a chief of police with a particularly pressing problem can unlock the whole security system?

The noble Baroness has drawn attention--

Baroness Thornton: My Lords, does it not rather depend on what one is doing?

Lord Lucas: Yes, indeed, my Lords. The noble Baroness has drawn attention to some very important

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problems. We cannot put structures in place which make it difficult or impossible for the police to deal with real crime and real criminals. But what we likewise must do is change the perception of business, in terms of an accurate perception of the risks which the Bill poses for the safety and the sanctity of its encryption structure, which is what it uses to protect its business and what it uses to guarantee its dealings with other people. We have to find a better way of dealing with that problem than is in the Bill at the moment.

The amendment addresses one possibility. For example, if Barclays Bank is faced with a raid on its keys, it can appeal to an interception commissioner. It can say, "This is entirely out of proportion. They ought to be satisfied with plain text". It gives a chance for a business to keep control of its keys. We shall come later to Amendments Nos. 62 and 63 and to other amendments which deal with other ways of achieving this purpose.

We do not want to see all the dangers and difficulties portrayed so graphically yesterday by the noble Lord, Lord Stevenson. We do not want to produce in the minds of international lawyers, who I suspect will be the people making these decisions, when they are questioning whether a business should put its headquarters in England, The Netherlands, Germany or Switzerland, the thought that they should cross out England because they cannot be sure of the safety of their key structure. We must avoid that kind of position; otherwise, as the noble Lord, Lord Stevenson, said, we will loose by stealth, without anybody knowing it, our core international e-business. That will be followed, as surely as night follows day, by the administrative infrastructure of those businesses moving out of this country.

It may be that this is not the right way of achieving our purpose. It may be that this amendment offers too many opportunities for the criminal to impose a day's delay and to use it. But we must in the course of today at least find some way to make it absolutely clear that a reputable organisation running a large international business will never lose control of its keys, will always be in a position of being able to maintain its security, and that it is absolutely clear to the most cynical of foreign lawyers that that is the case.

4.15 p.m.

The Earl of Northesk: My Lords, I rise to support the amendment. Perhaps I may say to the noble Baroness, Lady Thornton, that this matter is not only one of perception; to a certain extent it is all fact. To try to illustrate the point, I should like to quote from someone called George Hall, Director of Corporate Affairs at ICL. He had just announced a 10-year, £350 million contract to supply--the irony is lost on me--the Home Office's IT services and support. Yesterday he said:

    "We trade in many countries and most are not going down this road because the governments there realise they need to encourage the growth of e-business. There is a strong industry view that this legislation casts doubt on the UK Government's commitment to e-business".

That is a factual response: QED, my Lords.

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Lord Bach: My Lords, I delayed rising to my feet because I thought we would probably hear something from the Liberal Democrat Benches on this important issue. Obviously, we shall not.

I am grateful to noble Lords for having had a proper, decent debate on this important amendment, which stands in the name of the noble Lord, Lord Cope of Berkeley. The amendment would mean that if a recipient of a Clause 47 notice believed that complying with it would breach a confidentiality agreement, he or she could refer the matter to the interception commissioner for a ruling on whether the notice should be withdrawn.

That is a difficult issue. We discussed it in Committee. Obviously we appreciate that the noble Lords, Lord Cope and Lord Lucas, expressed some continued reservations then about the position. We have received some representations from industry about the question of potential breach of confidentiality arrangements and we have sought to explain the position to them. We do not believe--indeed the noble Lord, Lord Cope, and other speakers have suggested that this may not be the exact or right solution--that the suggestion proposed in the amendment about referring any case to the interception commissioner where there is doubt about breaching a confidentiality agreement would be workable. The interception commissioner would not be the right person for such a referral in all cases. It does not seem to us right that the commissioner should be the one who has to decide whether confidentiality should outweigh the reasons for seeking access to the information. That is part of the proportionality exercise, and properly one for the person authorising the notice and the person giving it.

I should add two other points which may offer some comfort. First, we do not think that the commissioners should have a formal role here. But their oversight function will be crucially important, especially perhaps in the early years of these provisions, in ensuring that the proportionality tests are properly applied. Secondly, there is always access to the tribunal. The tribunal will hear cases under the Human Rights Act concerning these powers. It will also hear ordinary complaints. It will have power to grant interim remedies, following an amendment we made in another place to Clause 65(6).

As we said in Committee, we have looked at the possibility of reflecting the secure position of persons acting in obedience to disclosure notices served under the Bill. Our reassurance, again for the record, is that we believe a contractual term will be unenforceable if it puts someone in breach for meeting a statutory requirement and we expect the criminal law will be construed similarly. We have looked at other relevant legislation--for example, the Drug Trafficking Act 1994--to see whether there is a precedent for offering some protection on the face of the Bill. But the Drug Trafficking Act situation is different from that under this Bill. That Act deals with a person acting on a subjective suspicion. Under this Bill, the person obeying the Clause 47 notice is obeying a statutory requirement which unequivocally applies to their

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situation. In short, there is no doubt as to the lawfulness of what the person who obeys a notice is doing.

I have to be even more circumspect about litigation in another jurisdiction, on a contract governed by foreign law. I can, however, confirm what the Minister of State said in another place. He said that a person's duty of confidentiality to another, however it arises, will always be compromised to a greater or lesser extent by national rules requiring the disclosure of information. In this respect, Part III of the Bill does no more than the many disclosure requirements approved by Parliament over the years.

There are difficult issues here. The representations we have received on this point have largely come from industry. But we have continually said in discussing the Bill that, for legitimate businesses not themselves suspected of criminality, the disclosure of plain text rather than keys must be the expected norm. This information is no more than information to which a variety of authorities have lawful access now under a variety of statutory powers. That is the reality.

Perhaps I may make two other brief points. We shall come shortly to government Amendment No. 70, which specifically requires that a person asking for a key must consider how much more data may be revealed than is strictly required. That offers some reassurance on the issue. We shall come to that amendment later. Even later than that we shall come to Amendment No. 87, which stands in the names of the noble Viscount, Lord Goschen, and the noble Lord, Lord Cope. While I do not want to reveal everything at this stage about how the Government will respond to that amendment, it may be that the noble Viscount and the noble Lord will receive some good news. In the light of what I have had to say, I hope that the noble Lord will feel able to withdraw the amendment.

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