Select Committee on European Union Minutes of Evidence

Examination of Witness (Questions 1371 - 1379)




  1371. Good morning, Minister. Thank you very much for coming to see us at relatively short notice. As you are probably aware, we are undertaking an inquiry into e-commerce, primarily the way in which policy is developed and the communication and co-ordination of policy, mainly in Brussels rather than in the UK but inevitably it has led us into examining what is happening on e-government here. As we come towards the end of the inquiry, we have had quite a barrage of lobbying put to us on the issue of RIP which has all been one-way traffic, opposing what the Government is doing, and the Committee thought it was appropriate therefore the Government should be given the opportunity to place on record its views. I am wondering if you would like to open up with a short statement before we move to the questions?

  (Mr Clarke) Thank you, Lord Brooke. Firstly, can I say I appreciate the opportunity to give evidence to your Committee today. Could I introduce Mr Hugh Ind, who is the official in the Home Office who is responsible for the Bill team and has been carrying through this Bill in its stages in the Commons and Lords? The purpose of the Bill, as I think the Committee will know, is to up-date existing legislation in the light of two major developments. Firstly, the Human Rights Act, which comes into effect on 2 October this year, and there has been a great deal of surveillance taking place at different times, not in the e-commerce regime specifically, where there has not been necessarily a Human Rights Act compliance, and we want to ensure that everything is completely clear on that front. Secondly, and this is where your Committee's work is particularly relevant, in relation to the very substantial technological development which is taking place in communications throughout the world, so that the old regime of interception of communications, bugging telephones and so on, has to be addressed in the modern era. The balance which we have been trying to seek, both in the legislation and in the debate as it has proceeded through the Commons and the Lords, is between the very real imperatives of law enforcement, on the one hand, where what we have is very serious international organised crime—most recently, for example, illustrated with the tragedy at Dover this week—where you have major international syndicates dealing in trafficking in people but also extended to drugs, money laundering, other international activities such as paedophilia and so on, who are very technologically advanced, very effective, and where surveillance is a major device for challenging their illegal activities, and, of course, individual human rights and civil liberties on the other. In this, more than just about any other area of legislation, this tension is always there. We believe we have the balance right. We have a lot of experience of working with the telecommunications industry on previous legislation but of course we are not extending it to Internet Service Providers and others in the whole e-commerce area. We have made a large number of amendments as the Bill has gone through its stages in the Commons and we have already in the Lords said we are prepared to make further amendments in the Lords, and it is under very active consideration by the Government in the light of comments made by your Lordship's colleagues in Committee and indeed at Second Reading here. We have sought to work extremely closely with business. As the Committee will be aware, the significant part of this legislation affecting e-commerce started out as part of the DTI E-Commerce Bill and was switched over to a Home Office Bill. Mr Ind and his colleagues have developed a very substantial partnership with business and we have discussed very fully and very frankly the various issues of concern, and we have been prepared to make a number of changes to the legislation to give reassurance where reassurance seemed to us necessary. So that is our stance and that is our approach. We strongly believe that the passage of this Bill will strengthen the position of e-commerce in this country and by reassuring everybody it is not a vehicle for strengthening the law of evasion by these international criminal organisations. So that is our stance and, as I say, I am happy to answer any questions you may have.

  1372. Can I start by saying that the whole of the Committee share the need to meet the principles you enunciated at the beginning, there is no division amongst us on that. We have been focusing primarily as part of this review on the promotion of e-commerce and we started with the very happy position of seeing what was viewed generally elsewhere, in Europe certainly, as a very close relationship between industry and the Government, but I think it is probably true to say that over the course of the last six months there appears to have been a feeling that some rift and division is starting to arise, and that has been brought to a head now with this particular Bill where, as I say, it has all been one-way traffic from industry to us that they are unhappy with what you are doing. We understand you have made some proposals to meet some of the concerns which have been expressed but industry is still opposing the Bill, primarily because of the capital costs and on-going costs of setting up the black boxes. Could you tell us what you will be doing to further try to meet that continuing criticism, try to assuage it, and try to bring the Government and industry closer together, because, as we perceive it, there is still a quite clear division existing?
  (Mr Clarke) I would say there are three areas of opposition to the Bill we have seen. The first is the general civil liberties argument which I will put to one side, since that is not the principal concern of this Committee.

  1373. We will raise some questions on that aspect.
  (Mr Clarke) Fine. I did not mean to presume what were your concerns. There is a genuine civil liberties issue which was made very fairly by those who are concerned about the relative role of the executive and the judiciary in relation to this area of activity. There is a conventional view from governments of all parties that this is the responsibility of the executive subject to judicial review, but there are others who take the view that judicial authorisation is the key approach and ought to be what we ought to do. I cannot see us making significant concessions in that area since it is an important point of principle and approach. The second very weighty opinion is all business, not simply the ISPs, the Internet Service Providers, but also bankers and others, has been exercised about the impacts on their businesses of this legislation. We are very much prepared to make compromises either in terms of the presentation or the substance of the Bill, or indeed in terms of the actual reality to meet their concerns, since, as I have said both in the Commons and elsewhere, this Bill will simply not work unless there is an effective partnership between business and Government in this area. The two principal areas we have looked at are first, as you mentioned, concerns in relation to costs, and the arguments about where the costs should be. We are authorised in the Bill, and we made changes in order to make clear we are prepared to do this, to meet the costs and ready to meet the costs. We produced an exemplification which has been very much exaggerated in some of the commentary there has been, and I will not go through the various issues which have been exaggerated, but we are prepared to meet costs and to discuss with the industry precisely what can be done. In that area we are actively considering what we can say to your Lordships at Report Stage to give further reassurance on that point. We regard it as very important to give further reassurance on that point and we are ready to consider how best we might do that. We are already very clear we will meet marginal costs involved, we are prepared to look at other costs of the process, though I would say that we believe the actual estimates which are floating around in the public arena are very, very much over-blown, but we nevertheless acknowledge the real concern that some parts of business have and we want to meet them rather than go by another route. It may be important to emphasise here that we have made clear under Clause 12 that the capability in this area and the costs allocations issues will come back before Parliament as part of an Order for Affirmative Resolution—not Negative Resolution—when we come to that point, so there is a reassurance to Parliament there will be a direct consideration of that issue before we finally take it further.

Baroness O'Cathain

  1374. Excuse me, may I just ask about that process? That means it will not be on the face of the Bill then?
  (Mr Clarke) We are actually considering making further amendments on the face of the Bill to give the reassurance that people ask, and that is what I was referring to, what we might or might not do at the Report Stage when that issue is considered. So the answer is, yes, we are considering what we can do on the face of the Bill.

  1375. It would help a lot if there was some `comfort' on the face of the Bill.
  (Mr Clarke) I understand that and business has made that point and we are trying to see how we can find a wording which might offer the reassurance that is sought. But I am then saying, above and beyond that—because that point is obviously right, if I may say so, with respect—there is also the Affirmative Resolution procedure which exists at a subsequent point.

  1376. Can I just make the point that from a business point of view, if I may, Lord Chairman, when you get into statements like "Affirmative Resolutions", it does not give a lot of comfort to business? Business actually wants things fairly clear on the face of the Bill. I have to say, down the line, working with business, you realise it takes an enormous amount of senior management time for people to try and get to understand what is really meant. Those of us who work in the Palace of Westminster have a fairly clear idea about Affirmative Resolutions but it is not like that when you are trying to run a factory.
  (Mr Clarke) I think that point is a critically important point and I accept it without any qualification.

  1377. As a hint to you, Minister, if you could actually make it as simple as possible and as much as possible on the face of the Bill, you would have a much easier ride.
  (Mr Clarke) I accept that point and think it is well made. There is a hierarchy from the face of the Bill, through the codes of practice, through statements on the floor of the House, and it is obviously ridiculous to ask senior managers in particular businesses to trawl through that pile.

  1378. Exactly.
  (Mr Clarke) That is why I acknowledge the truth of the point, that whatever we do on the face of the Bill is a better way of doing it, and we are looking actively at how we can do that and offer the reassurance you are mentioning. My only qualification is that it is quite difficult to see how we can do that. We had a very good letter yesterday, for example, from the CBI which put a number of very important points about ways in which we could do that.

  1379. If I may just make another suggestion, it is fine for the CBI to do that and it is, if you like, a composite view, but if you could pick out two or three leaders of major companies in this country and just say cosily, "This is the situation, we want to make it as easy as possible, what are your views?", I think that would help. It is just a suggestion.
  (Mr Clarke) It is more than a suggestion, Lord Brooke, it is a powerful proposition which I accept. One of our difficulties in the PR argument which has been going on about this is that there are a number of very vociferous people in a relatively small area who have made much of the PR agenda to which we have had to respond positively, but many of the big players to whom you are referring we have had good dialogue with and they are generally very supportive of what we are trying to achieve, but they see no advantage to themselves, and I quite understand their position, in engaging in the arguments about that. Why should they get engaged in that position. That has been the difficulty we have had in these discussions, if I can be frank with the Committee.

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