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Lord Cope of Berkeley: My Lords, it appears to be necessary to say once again that all noble Lords and those outside who have commented are of the opinion that the agencies of the police, Customs and so forth need to be able to access the Internet from time to time in a way which is similar to that in which they have been able to tap telephones and so forth. The key is the Internet equivalent of that.

We are not trying to prevent that, but we are trying to ensure that the mechanism is not such as to drive firms overseas. My noble friend, in his amendment, makes a valuable suggestion--he has done so in respect of this Bill and others--which is well worthy of consideration.

Viscount Goschen: My Lords, I hope that the Minister will give the amendment his fullest consideration. My noble friend has put forward an innovative idea of how we might overcome a problem which is vexing the industry and the representatives of agencies which are looking to have the fullest access, in appropriate situations, to encrypted material.

It is a genuine attempt to be helpful to the Government in producing a new mechanism and I hope that the Minister will be able to respond favourably. It is different from the original suggestion of a key escrow, for example. It is a much safer system whereby trusted third parties can act as intermediaries. There may be clear reasons why the Minister has difficulties with the amendment but, unless they are pressing, I urge him to welcome it.

Lord Bassam of Brighton: My Lords, I appreciate the sincerity with which the amendments have been tabled. They seek similar aims and build on pronouncements which the Government made about circumstances in which a key, as opposed to plain text, might be required. We have said on a number of occasions that one of the circumstances in which we may require a key is where profound concerns exist about the bona fides of the person served with a notice. As we have said continually, that is unlikely to be a consideration where the authorities are dealing with entirely legitimate organisations which have not provoked a profound security concern or been involved in criminality. In those cases, it will be the norm to ask for the plain text rather than a key. That is similar to what happens now when, for example, the police need to approach a bank for information.

Both amendments say that a burden may be placed on the recipient of a notice to prove that the plain text being disclosed is a faithful, intelligible version of the

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relevant protected information. I believe that there are difficulties with that. Amendment No. 62 made no reference to how the proof was to be obtained. Amendment No. 63 contains--it is attractive for this--an ingenious attempt by the noble Lord, Lord Lucas--and it is not the first time that he has been ingenious throughout our long debates on this subject--to close what he sees as a loophole. However, I am not sure that the whole approach which he offers is entirely workable. I shall go through the reasons for that.

The essential point is that the very circumstances in which the authorities might consider asking for a key to be disclosed are those which involve, for example, an individual or organisation suspected, as I said earlier, of involvement in some form of criminality. I am not sure that it would be possible or, more importantly, desirable in those circumstances to impose a direction for such persons to obtain proof either from a solicitor or from anyone else about the authenticity of the information they are being asked to disclose. If the high tests set out in Clause 49 for requiring that a key be disclosed are met--because, for example, someone is suspected of being a criminal--it does not seem to us to be appropriate or even sensible to trust that person to prove, by whatever means, the authenticity of the relevant plain text.

In addition, critical timing considerations may be involved in cases which involve a criminal investigation. We do not see how an additional proof stage could be built into the procedure without it damaging the effectiveness of the Part III power and having a profoundly detrimental effect on investigations. As in the case of other amendments, in putting these additions into the Bill I am sure that that was not the intention of the noble Lord, Lord Lucas, or of other noble Lords who are interested in this particular amendment and in the one which has not been moved. However, I am sure that they understand what the effect might be in putting this extra hurdle in the way because, effectively, that is what it amounts to.

This issue is bound up with the test for asking for keys set out in Clause 49. Although I understand the heartfelt plea on behalf of the industry, we do not believe that these changes are workable. On that basis, I ask the noble Lord to withdraw his amendment.

5.30 p.m.

Lord Lucas: My Lords, when I realise that the noble Lord is about to reply to one of my amendments, I often close my eyes and open my ears to discover whether I can hear the little sigh that he utters when he is of the opinion that what I have suggested is utterly absurd. On this occasion there was no sigh and I am comforted by that. Indeed, I believe that the reply which the noble Lord gave to the amendment was immensely helpful because he outlined what the Government see as its problems. I believe that I can see a way through that and will follow up that line between now and Third Reading.

It seems to me that the Government need the flexibility that they have asked for and which the noble Lord has enlarged upon in his reply. There should be

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a way in which we can provide a mechanism whereby, on most occasions, if a key is required from a reputable company and there is no pressure of time, that key can be disclosed to a trusted third party rather than to law enforcement agencies.

As I said, that requires some thought and some drafting. So long as it is included as an option and not as something which the Government or their agencies are forced to do, then it should not be a burden to them when it is critical that they obtain possession of a key. However, it will be of considerable comfort to the companies and businesses concerned when the Government are able to go the extra step to provide reassurance that their security will not be breached more than is absolutely necessary.

As I said, I shall follow up this matter between now and Third Reading. I believe that it would fit particularly well with a later amendment in the name of my noble friend Lord Cope of Berkeley. Therefore, when we come to consider that, I shall return to the point in order to illustrate to the Minister how I believe they might work in together. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 49 [Cases in which key required]:

Lord Cope of Berkeley moved Amendment No. 64:

Page 55, line 43, leave out from beginning to ("that") in line 49 and insert ("the Secretary of State has issued a warrant directing").

The noble Lord said: My Lords, Amendment No. 64 is grouped with Amendments Nos. 66 to 68, 88 and 89. I believe that it is one of the most important amendments to be tabled. It returns to the question that we have discussed during debate on many of the amendments: the government agencies' access to keys for encrypted material. It is one of the most difficult aspects of this difficult Bill.

It is a matter of the greatest controversy, not only in the e-community, if I may call it that--the businesses which are Internet service providers, and so on--but also in the wider world of banking and commerce, and wider. The first and most obvious reason is perfectly simple and well known. The Internet is a very open system--an international system in the fullest sense. So far as concerns banks and companies, the keys protect information of the highest value--contracts, negotiations in progress, current transactions, and so on. So far as concerns individuals, the information is personal and, in many cases, of the most delicate character.

I believe that if one says to a bank, "We must be able to access the keys of your electronic information systems", that is very similar to saying, "We must have a spare set of the keys to all your safes and all your strong rooms so that we can enter them by ourselves at any time". That would not encourage people to leave their valuables in bank safe deposits or, for that matter, to deposit their money with those banks, particularly if they could just as easily deposit them in a safe deposit box elsewhere.

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Essentially, the Internet is a worldwide system and it is easy to use an overseas service rather than one in the United Kingdom. The Bill started off by almost completely overlooking that fact. People can move to a country where they have more confidence in the security of their valuable information more easily than they can move their valuable property from one safe deposit box to another. That is why companies and similar institutions talk increasingly about moving.

Earlier, Ministers were rather dismissive of the idea that companies were worried or would move operations overseas. However, I hope that our debates during previous stages of the Bill helped to convince the Government of the seriousness of that threat. For obvious reasons, some companies have been unwilling to talk about it, but increasing numbers have been willing to talk either directly or through their organisations.

The open letter that the noble Lord, Lord McNally, referred to a few minutes ago showed that concern is not confined to companies, but extends to all sorts of charities and campaigning organisations. Apart from the organisations that the noble Lord mentioned, I notice that some of the many other signatories of the letter included Amnesty International, Unison, the Manufacturing, Science and Finance Union and the Medical Foundation for the Care of Victims of Torture. The letter says:

"We urge the Government to withdraw the Bill".

That is going a lot further than us. The letter continues:

"The ability of the Government to demand decryption keys creates a dangerous precedent which will affect the rights of all computer users. Surveillance of website visits will undermine confidence in the Internet as a means of communication".

In response to the noble Baroness, Lady Thornton, I also mentioned the statement made the other day by the Internet service provider Poptel. I do not want to embarrass the Minister or Poptel, which is only one of a number of companies to have expressed concern, but among its customers are a number of large unions, including Unison, as well as the Labour party. Poptel's website says:

"The Labour party decided to connect up its offices ... and activists into a private network run by Poptel with access to the Internet. This became a key campaigning tool for the 1997 General Election. Tony Blair was one of the first MPs on-line and the e-mail address [e-mail] soon became one of the most famous in the country".

In a public statement the other day, the chairman of Poptel said:

"We are concerned that under the proposed regulatory regime we will not be able to guarantee the integrity of communications for our clients".

He also said that if the Bill was not withdrawn,

"We will have no alternative but to actively look at moving at least some of our services overseas".

There are plenty more quotes from other companies in a wide variety of fields, including banking and commerce. There is a danger that the Bill will make this country an e-commerce pariah, not the centre of e-commerce, as the Government wish. That would be bad not only for Internet service providers and other similar companies based in this country, but for every

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company, because, from the smallest to the largest, every company uses the Internet to some extent and some of them rely on it heavily.

We all agree that the police, Customs and Excise, and the intelligence services must be able to do their duty and catch criminals, including paedophiles, drug barons and terrorists. To do that, they need the Internet equivalent of telephone tapping. They are losing the ability to keep track of communications because of the growth of the Internet. That is the dilemma that we all face.

The Minister was kind enough yesterday to recognise the constructive spirit in which we have tried to approach the problems of the Bill. The amendment is another example of that constructive approach. We are pressing the principle on the Government, although I am not wedded to the drafting. Changes could still be made at Third Reading if necessary. However, the principle is important.

Those who signed the open letter, as well as many other companies and organisations, are pressing for the Bill to be withdrawn, whereas we are trying to produce a solution to the dilemma. The proposal in the amendment is that, as with the tapping of telephones, a warrant from the Secretary of State should be required for the police and other authorities to access a key.

Throughout our debates, the Government have tried in two ways to reassure us and all those who are concerned. First, they have said that they envisage keys being required only rarely, although that is not how the Bill was originally written. That reinforces the case for the Home Secretary to be the person to authorise access to keys. If there are not going to be many cases, it will not be a huge additional burden for him and his officials.

Secondly, because we have pushed so hard in earlier debates and because of outside pressure, the Government have tabled Amendment No. 66, which says that access to keys will be granted not on the say-so of a police superintendent or the equivalent in the other organisations, but on the say-so of the chief constable or his equivalent, such as a brigadier in the Army.

I assume that no superintendent would be likely to do such a rare and difficult thing as demand access to keys without knowing that he had the support of his chief constable. I do not suppose that many chief constables would let their superintendents go around demanding keys without laying down carefully when it should happen. Welcome though Amendment No. 66 is, it is not a great advance. I am not much reassured by it and I do not think that the companies concerned will be either.

The Home Secretary is asking for exceptional powers, so he should take responsibility for authorising their use. He is answerable to Parliament and to the nation in a way that no chief constable is answerable on operational matters. Like the tapping of telephones, it should be a ministerial responsibility. I beg to move.

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5.45 p.m.

Lord McNally: My Lords, as the noble Lord, Lord Cope, has said, a number of arguments will reappear during this evening, particularly on Clause 49, which is a symbolic crunch clause. We want to test the Government's intention that the powers being sought are to be used only in exceptional circumstances by returning the responsibility for exercising them to the Secretary of State.

Almost from the beginning, the Government have tried to disarm their critics by denying that they would ever use the powers that the cold print gives them. By accepting the amendment, the Government would do much to reassure the public and industry that their intentions were limited and specific. We have repeated time and again that we do not want to obstruct the Government in the proper pursuit of wrongdoers of various kinds, but we have emphasised that in giving them those necessary powers, we do not want to allow government agencies to intrude into the private lives of ordinary citizens or to undermine at its inception the e-commerce industry, on whose potential the Prime Minister and other Ministers have put such emphasis.

It really is no use the Minister trying to belittle the range of criticisms which have been made of this Bill. They have been catholic, in the full sense of that word. I have never seen such a range of concern about a piece of legislation.

And it continues. In the past 24 hours, the Data Protection Commissioner has voiced concerns about this Bill's compatibility with the Human Rights Act. I understand that the Better Regulation Task Force has recently written to the Minister pointing out that the extra regulatory burden of the Bill is onerous indeed. The task force has expressed concern about its implications.

So Ministers must face up to the fact that the level of criticism of the Bill has been intense. The argument that the Bill should be taken away and looked at again carries weight. It really is a deeply-flawed Bill. The Government should be grateful to your Lordships' House for the good fist which has been made of trying to improve it.

I see that the noble Lord, Lord Bach, is becoming agitated, as he always does, by this stage in one of my speeches. It is rather like having a spaniel and a Rottweiler on the Government Benches. Half the time, we are being licked by the noble Lord, Lord Bassam, and the rest of the time, the noble Lord, Lord Bach, is snarling at us.

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