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Lord McNally: My Lords, I should like to associate myself with the concerns expressed by the noble Lord, Lord Cope. As he said, we have moved a long way from the Bill's starting-point and the implication that the police, the security services and others could specify whatever equipment they thought necessary and the service providers would pick up the bill. There is now much less of a "blank cheque" approach.

However, the Alliance for Electronic Business has raised the point that service providers will, as their part of the bargain, be responsible for hardware and software, opportunity cost, IT development time and the costs of planning and management time. Is it clear, in return, that what is on offer from the Government is a Treasury-capped £20 million over three years? If that is what is on offer, the approach seems rather churlish. As all sides concede, we are entering unknown territory. It is difficult to understand how it is possible to be "fair" while capping and restricting the nature of the Government's commitment in advance. Industry is eager to know whether its understanding is correct; namely, that it is a hard fact that all that is on offer is £20 million over three years, capped by the Treasury.

Viscount Goschen: My Lords, I welcome the fact that the noble Lord, Lord Bassam, and his department have taken so constructively the decision of this House when this matter was put to a vote on Report. It is definitely an improvement to have the word "fair" included in the Bill, and to have some further explanation of what that means.

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Building on points raised by the two previous speakers, surely the £20 million mentioned previously by the noble Lord, Lord Bassam, is only an example for reference purposes. Clearly, we cannot say on the one hand that it is impossible to specify the amount of money that is to be set aside for this purpose when we do not yet know what the total bill will be, and, on the other, have a categorical statement in the Bill that the contribution by the Secretary of State will be "fair". Estimates of the total bill range from the upper hundreds of millions of pounds to some tens of millions of pounds, as put forward by the Government.

I should be grateful if the Minister will confirm that the figure he mentioned was a Treasury estimate and that it in no way binds the Government, or at least is in no way meant to be used by the courts in interpreting a "fair" contribution.

Lord Desai: My Lords, perhaps I may make one small point. As time moves on, the technology in this field becomes cheaper, not more expensive. That will be of some consolation to my noble friend.

3.45 p.m.

Lord Lucas: My Lords, I support what my noble friend Lord Cope said. It is enormously important that we do not get ourselves into the reverse position of that on flood defences--where people campaign to have the Government spend millions of pounds on defending properties worth a few tens of thousands because they are not required to make any contribution to saving their homes. The situation is to some extent reversed, although it is much better now than it was under the Bill as originally drafted, whereby the contributions required from industry could have been out of all proportion to those asked for from the Government.

It is important that the Government pay their fair share of the cost. It is important, however, that industry should pay something. The idea of people being able to charge the police for helping the police with their inquiries is undesirable. But we need to see the Government making a fair and, in concept, at least an equal contribution to the costs. That will keep the Government honest in terms of what they are asking for. I very much hope that the noble Lord will be able to give us that comfort.

Lord Bassam of Brighton: My Lords, the noble Lord, Lord Lucas, has almost made my argument for me, and I am grateful to him.

A number of valuable and valid points have been made in this brief exchange. I shall try to give such comfort as I can. We believe that the regulatory impact assessment figure of £20 million which we made plain last week is the best possible estimate in the circumstances. It can only be that. But spending up to that figure is in the gift of the agencies involved in carrying out the work. In a sense, how much they require must be their decision. That will obviously affect the amount of money spent.

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As I said, we believe that £20 million is the best estimate in the circumstances, and there is a degree of reassurance in that. I do not always think that we get it absolutely right, but we believe that that is the figure that we need to pay in these circumstances and that it is fair. Although we do not have a precise mechanism to determine "fairness" in each and every case, the fact that our approach is on a case-by-case basis in terms of the individual circumstances of the service provider means that we shall endeavour to operate the regime as fairly as we possibly can. A number of points have been made, but they all come back to the issue of what "fairness" will mean in each circumstance. We shall have to see how the regime works out.

The noble Lord, Lord Lucas, was right to say that it will come down to ensuring that people pay a reasonable price in the circumstances. We believe that we have got it right, but we shall continue to listen to those who make representations to us. We now have a mechanism for achieving that objective.

In the early stages of the debate there was--I shall not say a degree of hysteria, but certainly overblown concern about the costs. We have tried to keep a sense of proportion and we believe that, on balance, we have got it about right. The £20 million will work for a three-year period. During that time we shall have further opportunity to reflect carefully on how the system is working. We do not want to put UK companies at a competitive disadvantage. The noble Lord, Lord Cope, was right to raise that issue. For that reason, the smaller companies will be given rather greater assistance. Clearly, we do not want to do anything that stifles their growth and activity at the outset. We shall take very careful account of matters such as the planning costs of smaller companies, which I am aware is an important issue.

I am grateful to all noble Lords who have made constructive comments. I am aware that there is a great deal of concern about this issue. I believe that we were right to bring fairness into the legislation and to qualify it in a sensible way. I congratulate those who have played a part. I hope that we can now agree these amendments and carefully monitor the operation of the arrangements to ensure that they work in the best interests of industry. In this way we can guarantee the security of the system and combine fairness with a sense of proportion so that in future this part of the legislation works for the benefit of everyone.

On Question, amendment agreed to.

Lord Bach moved Amendments Nos. 9 and 10:

    Page 16, line 43, at end insert-

("( ) For the purpose of complying with his duty under this section, the Secretary of State may make arrangements for payments to be made out of money provided by Parliament.").

    Page 16, line 44, leave out subsection (3).

On Question, amendments agreed to.

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Clause 16 [Extra safeguards in the case of certificated warrants]:

Lord Phillips of Sudbury moved Amendment No. 11:

    Page 19, line 12, leave out from ("necessary") to end of line 13 and insert ("for the purpose of preventing acts of terrorism; and").

The noble Lord said: My Lords, Amendment No. 11 harks back to Amendment No. 22 which I moved, at inordinate length, on Report on 12th July at cols. 317 to 320. In response, the noble Lord, Lord Bassam, spoke at appropriate, not inordinate, length, at cols. 322 to 324. It would be a form of cruel punishment to go through all the issues again. None the less, I shall not be deterred from trying one last time to clarify, for those who must hereafter understand this piece of legislation, exactly what this clause, and the provisions which lock into it, provide in relation to trawled, or indiscriminate, as some would call it, interception of communications. I make no apology for that. We are told by all concerned beyond these walls that these parts of the Bill are of particular concern and potential importance to the industry and ordinary citizens so-called.

When I spoke at Report stage the noble Lord, Lord Bassam, kindly said that he would read Hansard, consider the various questions that I raised and come back to me. I fondly looked forward to discussions with the noble Lord and his officials. That did not take place very long ago. Unfortunately, in the interim I have been abroad and, therefore, there has been no discussion or correspondence.

Lord Bach: My Lords, I am to answer for the Government today on this issue. It is a shame that the noble Lord has been unable to take advantage of the offer made by my noble friend to facilitate further discussions and briefings on these matters. I am aware that the noble Lord, Lord Cope, took advantage of that opportunity which was also available to the noble Lord, Lord Phillips of Sudbury, and his party. It is a minor shame that the noble Lord and the noble Lord, Lord McNally, were unable to take advantage of that offer. I hope that when I come to explain the Government's position all will be put right.

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