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Lord Rooker: I do not accept that for one minute. We should prefer to have a voluntary code and, in view

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of our contacts with the industry, we have every expectation of securing that. I am not going to give details of that consultation tonight because I am in no position to do so.

I turn to the points of substance that have been raised. I do not deny that they are points of substance, but I do not agree that the amendment should be added to the Bill. The amendment would have two effects: it would guarantee that an unreasonable burden was not placed on service providers, and it would prohibit the retention of data that are not needed for business purposes.

The first issue is dealt with in Clause 105. The Secretary of State is required to ensure that arrangements are in place to make appropriate contributions to service providers if he judges that it is right to do so. So far as I am concerned—I shall also take advice on this—the terms in the first two or three lines of Clause 105 are standard and are used in other Bills. I recall that form of words from my time at the DSS when we consulted with industry. They came up when we were, as it were, paying for something to be done or that had been done at our request. The phrases, Xas he thinks appropriate", and, Xas he thinks fit", involve a tried and tested formula in legislation and I am not aware of any complaints about the words. That also mirrors the payment arrangements in the Regulation of Investigatory Powers Act, which covers access to communications data.

It is absolutely crucial that we work with information providers to ensure that the arrangements do not cause British industry to lose out to competition from abroad. We are not seeking to damage British industry in any shape or form in relation to its competitors. That will not satisfy Members of the Committee but it certainly answers the first point.

The second issue concerns the type of data to be retained. That will be discussed in detail in the consultations on the code of practice. Individual agreements with the service providers will specify exactly which types of data are kept and will ensure that current retention practices are taken into account. There will not be a Xone size fits all" arrangement. Some providers may end up retaining more data than they currently do. We want to take that into account.

The provisions are flexible enough to distinguish data that are of use to law enforcement and should be kept, and data that are of no interest to national security or the detection of crime. Records of standard operational procedures or the product of the functioning of computer systems, for example, should not be kept because that has nothing to do with the purpose for which the codes allow data to be kept. The provisions apply only to communications data that are already held by providers. We have no intention of asking them to retain data that are not collected in the normal course of their business. They are being asked to do nothing new. I see that the noble Lord is nodding, for which I am grateful.

The information that I have is that, in relation to our international partners, there have been negotiations on the EU draft communications data protection

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directive. My notes contain a word that I cannot read, but it starts with, Xcyber"; it could be Xcyber-active forum". Last week, that forum was devoted entirely to data retention. I shall get a translation of the word in due course. There are ongoing European Commission discussions with the United States authorities and the matter arose at the G8 Florence summit two weeks ago. Home Office officials have met counterparts from France and the Netherlands. I now learn that the word I could not read is, Xcyber-crime", and the body is the Xcyber-crime forum". Okay. The writing is much better than mine. I am not making a criticism.

Last month Home Office officials met counterparts in France, the Netherlands and Sweden to discuss what each country is to do on data retention to meet the 11th September crisis. France has just introduced emergency legislation to retain data for up to one year for law enforcement purposes. I hope that that brief overview answers the noble Lord.

Amendment No. 176A seeks to ensure that equity is maintained between service providers and that they are not made to bear unreasonable burdens. We are committed to ensuring equity between comparable service providers. If it is necessary to introduce a mandatory scheme—I hope that it will not be—discussions about how equity can be observed will take place during consultation before directions are made.

Payments are dealt with in Clause 105. The Secretary of State is required to ensure that arrangements are in place to make appropriate contributions to service providers, if he judges that it is right to do so. That mirrors the payment arrangements in the RIPA provisions which cover access to communications data. The second issue concerns the type of data to be retained. That will be discussed during the consultations.

Amendment No. 176E introduces a test of reasonableness to directions issued under Clause 103. There is a requirement to consult communications providers before issuing directions. That will ensure that they are able to express what they can or cannot reasonably do. The Secretary of State will then need to balance those considerations against what is necessary to safeguard national security and to prevent and to detect crime.

We are committed to considering what help may be given to service providers that may take the form of capital investment or running costs. We shall work with the service providers on that and, in particular, we shall ensure that that does not cause British industry to lose out to competition from abroad. Noble Lords have raised a crucially important point on which I hope I have satisfied them.

The Earl of Northesk: I am grateful to the Minister for his explanation and comments. The noble Lord, Lord Phillips, may be more optimistic than I, but I concur with his wish and expectation that this part of the Bill will eventually be appropriately constrained, which will render these particular amendments redundant.

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I am also grateful for the comments of my noble friend Lord Goschen. He put the issue with much more clarity than I managed. His point about potential migration via CSPs is well made. The Government should not lose sight of the fact that that could happen as that would damage their ambition to make the UK the best place for e-commerce among the G7 by 2005 and aspirations of that kind.

I hasten to add that thus far I have tried to avoid muddying the waters of the debate with references to preparation of and negotiation over EC directives. My suspicion is that we have probably successfully confused too many people already without adding that into the matrix. I am particularly grateful for reassurance from the Minister that the requirement for retention of data shall not include anything outside CSPs' normal business practice and use. That is extremely helpful. Tomorrow I shall read carefully in Hansard what the Minister has said. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 102, as amended, agreed to.

The Deputy Chairman of Committees (Lord Geddes): Before calling Amendment No. 173, I must advise the Committee that when that amendment has been disposed of I shall call Amendment No. 173B before Amendment No. 173A, as Amendment No. 173B has been incorrectly marshalled. I must further advise the Committee that if Amendment No. 173 or 173B is agreed to, I shall be unable to call Amendments Nos. 173C to 174 inclusive due to pre-emption.

Clause 103 [Directions about retention of communications data]:

9.45 p.m.

Lord Phillips of Sudbury moved Amendment No. 173:

    Page 62, line 36, leave out subsection (1) and insert—

X( ) If, after reviewing the operation of any requirements contained in the code of practice and any agreements under section 102, it appears to the Secretary of State that it is necessary to do so to safeguard against terrorism, he may by order made by statutory instrument authorise the giving of directions under this section for as long as it takes to revise the code in consultation with the communications providers to whom the code will apply or, as the case may be, who will be affected by the revisions, or with the persons appearing to him to represent those providers."

The noble Lord said: The amendment seeks to soften the impact of Clause 103. As the clause stands, if the Minister has compulsorily to act—that is to say that he fails to reach the agreement which we all accept he and the Government will be earnestly seeking—one moves into a position where directions can be given for an initial period of two years. That is renewable ad nauseam.

We on this side of the House—there are several names attached to the amendment which cover the spectrum—feel that a better solution to the circumstances which give rise to compulsion would be

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for the compulsion period to end as soon as a satisfactory code has been developed. That is the simple purport of Amendment No. 173. I beg to move.

The Earl of Northesk: It may be convenient to the Committee if I speak to Amendments Nos. 173A, 173B and 174B. I begin by supporting the words of the noble Lord, Lord Phillips. Both Amendments Nos. 173A and 173B offer alternative approaches to the amendment so eloquently explained by the noble Lord.

Our view is that it is inappropriate that the Secretary of State should have absolute discretion in invoking reserve powers. To that extent, we are of one mind in the conviction that this part of the Bill is in need of improvement.

I turn to Amendment No. 173A. It seeks to introduce elements again of a proportionality test against which the Secretary of State's giving of directions under the clause can be measured. It is important to realise that it is not unwillingness on the part of business that can make compliance with data retention requests difficult, be they voluntary or mandatory. As the Minister said, the response of communication service providers in the wake of September 11th has been excellent. There are often sound commercial reasons for non-compliance; for example, the data required might be available only on a service that is subject to another jurisdiction. That point was made previously by my noble friend Lord Goschen.

I hazard a guess that understanding of these kinds of issues is perhaps a little cloudy. Thus, without some form of test and the pro-active involvement of business in the process, it is conceivable, if not likely, that directions emanating from the Secretary of State alone will entrench the ineffectiveness of the code rather than address it. In the context of a mandatory code, that has the potential of being positively harmful to the sector. Amendment No. 173A seeks to address that problem by making business a party to the preparation of any revisions in the code.

I turn to Amendment No. 183B. That too introduces a threshold test for the reserved powers by obliging the Home Secretary to show that a direction under Clause 103 is necessary and justified for the purposes of the Bill by linking it back—again— to Clause 102(5). That is consistent with the proportionality principle highlighted by the Information Commissioner in her memorandum on the Bill. She stated:

    XThe scope of the powers proposed to be given to the Secretary of State is immensely broad. The lack of any overt safeguards against abuse of such powers indicate a lack of proportionality such as to render the prospective legislation incompatible with Convention rights".

Amendment No. 147B picks up that thread and applies it equally to any directions that the Secretary of State may issue to communication service providers. As so often with the Bill, the objective is to

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establish appropriate consistency with the principles of proportionality present in data protection and human rights law and in RIP.

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