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Your Lordships will be aware that this Government have been actively striving to reform our corruption laws for a number of years—that was alluded to today. In 2003, we presented a draft Corruption Bill for pre-legislative scrutiny. That Bill was based on proposals made by the Law Commission arising from its work in the 1990s. It is now forgotten that those proposals were welcomed during consultation by the Law Commission and the Home Office. However, as noble Lords know, when the Bill was produced, it was heavily criticised by the Joint Committee that gave it its pre-legislative scrutiny. The Joint Committee recommended an entirely different basis for the scheme of offences, which the Government then found unworkable. It feels a little like Lords reform. We all agree that Lords reform is absolutely necessary; it is just that we seem to have real difficulties in coming to agreement on how it should take place.

Having had the delight of representing the Government on innumerable Bills, I know the challenge and interest that are created when there is no consensus in the House between the parties on the form that the Bill or amendments should take. We need to bear in mind the practical difficulties where there is no real consensus.

To take forward reform in December 2005, the Home Office issued a consultation paper. The summary of the responses to the consultation paper was published on 5 March. The consultation has revealed broad support for reform of our bribery law, but no consensus on how it should be reformed. It is clear that there is significant and influential opposition to the Government’s draft 2003 Bill, and we have therefore concluded that that Bill is unsuitable for presentation to Parliament. However, it is also clear that there is fundamental disagreement between stakeholders on which of a number of differing models should be adopted. The Government have concluded that there is insufficient support for any one particular model to justify its being presented to Parliament at this time.

I must take issue with the noble Lord, Lord Goodhart, just in one regard. He indicated that the Law Commission is likely to take about two years. The Law Commission has indicated that it will treat this review as a matter of priority. Its work should be complete by October next year. Every effort is being made to deal with this matter expeditiously. The Law Commission will have to look at all the different models that have been offered so far, together with any international models.

Lord Berkeley: My Lords, the Minister says that there are a lot of different opinions about the way forward. Does she not accept that there has been total consensus among those noble Lords who have spoken today? Who is against the Bill whom we have not heard about?

Baroness Scotland of Asthal: My Lords, I do not think that anyone is against the Bill’s purpose in principle; it is just that when we turn to the detail of how it should be implemented, what should be included and what the structure should be, we do not have consensus. I was intrigued, as I always am, to listen to

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the noble Lord, Lord Thomas of Gresford, who said that it is all so simple and that we all know what “bribery” means. However, we know from the experience of the past 10 years that it has been a little like herding cats: we do not all agree on what it means, which has been one of the difficulties.

Lord Goodhart: My Lords, I took the Minister to mean that the Law Commission will report by October 2008. While I am glad that the matter is to be treated as a matter of urgency, it seems that that is getting fairly close to the two years that I predicted.

Baroness Scotland of Asthal: My Lords, we hope that it will not take so long. The noble Lord will know that the Law Commission, particularly when there is an issue of such contention, tries during its consultation period to get everybody around the table to see whether it can come up with a solution with which the majority will be content. We now have a great volume of material from the different models with which it can work. We are a long way forward from where we were when the commission first looked at the matter. We are therefore hopeful that it will be able to build that consensus and come forward with a model that we all would then be able to endorse. If we were to be in that happy position, and since the whole House wants it to happen, I am sure that we would be able to come up with a speedy solution, particularly now that the Moses Room is in such active use, to make sure that we in this place, as well as perhaps those in the other place, could drive it through as fast as possible.

Lord Dykes: My Lords, could we not expedite the process by asking some of the OECD experts at the Château de la Muette to help us?

Baroness Scotland of Asthal: My Lords, we know that the Law Commission’s range is wide. I am sure that there will be no resistance to looking at all models, from whichever place they come, in trying to get this right.

We have a difficult situation, but there is, as has been said, total consensus that we need to do this and do it as speedily as we can. There is also consensus that, if we fail to do so, that will be deleterious in the long term, because there will be a lack of clarity. There is no disagreement among us about that. But the reform of our corruption law is not an easy task, as previous attempts have demonstrated. The truth is that bribery is a hard crime to pin down. It is vital that we get the reform right and that we do not inadvertently cover practices that are not and should not be criminal—an issue that was highlighted by the noble Lord, Lord Condon.

We therefore announced, as your Lordships will remember, on the same day as we published the summary of the responses, that we were asking the Law Commission to undertake a thorough review of our bribery laws. It has been said that there was delay, but we do not believe that that is true. If one looks at the chronology, one sees that things have moved on, and moved on beneficially. I reassure those noble

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Lords who have been concerned that the 2003 Bill took too narrow a scope that the terms of reference for the new review require that the Law Commission makes recommendations that continue to ensure consistency with the UK’s international obligations. It will compare our law with that in other countries and, in looking at the full range of structural options for a new bribery law, will consider the merits of an offence dealing separately with bribery of foreign public officials. I also assure my noble friend Lady Whitaker that the Law Commission will consult business as part of its review.

We have also asked the Law Commission to look at the wider context on corrupt practices so that it will be clear how existing provisions complement the law on bribery. This part of the review will comprise a summary of provisions and not recommendations for reform. Referral to the Law Commission is the best course of action; the Law Commission is best placed to take forward and make a success of law reform in this field. We have asked the commission to prioritise its review and to prepare a draft Bill, so by the end of that period we shall have something to work on. In the light of that work, we will bring forward legislation as soon as we are in position to do so. Reform of our corruption laws is a difficult undertaking, but it is vital that we get it right.

I sympathise with the objectives of the Bill before us today and welcome the contribution that it can make in informing our work, but I emphasise that it is not the product of the extensive consultations and reviews that are necessary and which the Government are embarked on. As I shall explain, we do not believe that this Bill establishes a workable or appropriate new corruption law. It certainly does not deliver the clarity required in a new law.

Since I have only a few minutes left, I shall scan through in shorthand form some problems that will need to be looked at. I do not take issue at all with the Bill’s objectives; it is absolutely right to safeguard integrity, and so on. But, with regard to the clauses at the start of the Bill that deal with the bribery offences, the scheme for those offences is overlapping and duplicating. The formulation of the offences fails to deliver the clarity sought; a line is not easily drawn between what should be considered criminal and what should not. The proposed new corruption offence in sport is not necessary or required to tackle fixing; bribery and gambling provisions criminalise fixing sufficiently already, as I think noble Lords indicated during the debate. There are more effective means of demonstrating our commitment to tackling corruption in sport than the creation of a new criminal offence. However, I absolutely understand why the provision is there, and those are issues that we can look at.

We think, too, that the proposed new statutory duty to report public sector corruption may be somewhat problematic and not entirely appropriate. There is already a duty in the Civil Service Code, and similar provisions will exist for other positions. We do not believe that the offence of failing to report is justified, since we have disciplinary proceedings already, which are a more appropriate and proportionate sanction. The Law Commission concluded in its last report that

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the presumption was no longer justified or necessary and we sympathise with its conclusions. We are already tackling cross-border hard-core cartels that engage in bid-rigging, and we do not believe that a new foreign bid-rigging offence is the best way forward. I listened with interest to what the noble Lord, Lord De Mauley, said as to how the offences worked together.

There is a duty on United Kingdom companies to supervise their foreign subsidiaries. I heard what the noble Lord, Lord Chidgey, said about it not doing what we think it does, but we think that, if you disaggregate the way in which it is structured, it has that intent. However, I am very glad to hear that the noble Lord does not want it to have such intent. We can see that that needs a bit of work, too.

An amendment to the Serious Fraud Office remit is, we think, neither necessary nor justified. The remit covers cases involving serious or complex fraud, and major cases of bribery will normally involve that. The SFO has already demonstrated an ability to prosecute in bribery cases.

That was a quick canter through the issues. We agree in principle with much in the Bill but there is a lot of detail that we would have to unpack, and I think that there is agreement in the House that we would have to work very hard on it. But I make the commitment that this is not the Government being dilatory; we understand how important the matter is and wish to ensure that it is driven through. We are very conscious of the point that the noble Lord, Lord Jay, and others made about our reputation and the need to do all that we can, as we have always done—a point made by the noble Lord, Lord Neill of Bladen—to ensure that we are held in the highest esteem around the world. There is absolutely no difference between us on that. If at all possible, we would like to be the best.

1.17 pm

Lord Chidgey: My Lords, I thank all those who took part in the debate for their contributions. I shall do my best to respond to the particular points raised by noble Lords in due course, rather than take up more time in the Chamber today. I thank the Minister, too, for addressing seriously the issues that have been raised—that is appreciated—and for her comments about the progress that we can probably make. Many areas of this issue and provisions of the Bill merit more detailed examination, which we may well achieve by careful scrutiny of the Bill in Committee.

On Question, Bill read a second time, and committed to a Committee of the Whole House.

Interception of Communications (Admissibility of Evidence) Bill [HL]

1.18 pm

Lord Lloyd of Berwick: My Lords, I beg to move that this Bill be now read a second time.

It is only a week since we last discussed intercept in this House, on the first day in Committee on the Serious Crime Bill. Noble Lords might think that

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nothing new of importance could have happened between then and now but, if they did, they would be wrong. On Monday this week there was a hearing before the Joint Committee on Human Rights at which two witnesses gave very important evidence for today’s debate. One was Sir Swinton Thomas, the retired Interception of Communications Commissioner, and the other Sir Ken Macdonald, the Director of Public Prosecutions.

Sir Swinton made a powerful case for maintaining the status quo, largely on the lines of the report that he published a few weeks ago, which some noble Lords will have seen. To my mind the case made by Sir Ken, the Director of Public Prosecutions, for a change in the law was overwhelming. I shall come back to what he said in a few moments. Sir Ken Macdonald is not the only one to support a change in the law. Last week I gave a long list of others who also support such a change: the noble and learned Lord the Attorney-General, Lord Goldsmith; Sir David Calvert-Smith, a previous Director of Public Prosecutions; Sir Ian Blair; the noble Lord, Lord Carlile, the independent watchdog in these matters appointed by the Government, and so on. I shall quote a former chief constable of the West Midlands and Inspector of Constabulary, the noble Lord, Lord Dear, whom I am very glad to see in his place. He said that he had for 10 years or more been in favour of admitting this evidence and added:

Quite so.

The first question that always arises in these debates is whether admission of intercept evidence would do any good: whether it would increase the number of suspects who can be brought to court and, it is hoped, convicted. Nobody, of course, suggests that it would lead to convictions in every case of serious crime, but it is common ground now that it would lead to more convictions in some cases of serious crime. That has been common ground ever since the Home Office review of February 2005; it is also the Minister’s own view. She has told us on many occasions that she is altogether in favour of admission of intercepts if it can be done safely. She described it last week as,

Sir Swinton Thomas is of the same view, though he expressed that sentiment in slightly more judicious language as becomes a retired judge. The question comes down simply to this: can we or can we not do it safely? Can we find a way of making evidence admissible without prejudicing what we already have? My answer is: yes we can.

Two arguments are always used the other way, and no doubt we shall hear them again today from the noble Baroness, Lady Ramsay, whom I am very glad to see in her place. The first is that if criminals knew that their telephone conversations could be intercepted, they would cease to use the telephone and we would thereby lose a valuable source of intelligence. I do not doubt for one moment that telephone intercept is a very valuable source of intelligence—that, again, is

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common ground—but I suggest that there is nothing in the argument that we would lose that ability. We are talking here, after all, of serious organised crime committed by sophisticated criminals operating across national boundaries. Of course they know that their conversations can be intercepted; otherwise, they would not talk in the guarded terms in which they speak so often. They know that in every other country that evidence can be used in court against them; yet, they continue to use the telephone for communicating with each other to hatch their conspiracies because they have no other means of communicating with each other. It is fanciful to suppose that the habits of these criminals would change because the evidence was at long last to be made admissible in the United Kingdom as well as in every other country in the world.

The second argument is that if intercept evidence were allowed in court, criminals would soon discover the methods by which it was obtained. This is what worries the security service and GCHQ. I assure your Lordships that I understand their concern, but the courts are not quite so na├»ve in this respect as some may imagine. In common with every other common-law country, we have developed a means of protecting sensitive information that is thought to be at risk in some way. The principle is called public interest immunity; there is nothing new about it. It is well understood in the courts. I do not say that it is used every day but it is used very frequently. The procedure is set out in Part 25 of the Criminal Procedure Rules 2005. If lawyers for the defence demanded to see documents that might disclose methods of intercept, the application would come before the judge who would hear the case and decide whether the documents should be disclosed. It is inconceivable that a judge would order documents to be disclosed, or information to be discovered, that would reveal methods used by GCHQ and other agencies. If the judge went off his head and did so order, the prosecution would at once appeal to the Court of Appeal, which would put the situation right. If the Court of Appeal went off their collective heads, there would always be an appeal to your Lordships’ House. There is therefore nothing in the two main arguments against allowing intercept, which have been used so often.

If anybody doubted the utility of intercept evidence, or our ability to use it safely, I hope that your Lordships will look at the position in the United States and Australia, on which the evidence of Sir Ken Macdonald is very revealing and important. In September 2004 he visited his opposite numbers in the United States and Australia. He talked to eight agencies in the United States and 12 in Australia. Everywhere he got the same message: it would make an enormous difference. I should like to read out a great deal of his evidence but I cannot; however, I shall read just two or three sentences:

That evidence given by Sir Ken is amply borne out in the report by Justice, which refers to an observation of Mr Damian Bugg QC, the Australian federal Director of Public Prosecutions, who says:

It is evidence of that kind which makes it difficult to understand the statistics which the Minister gave, as reported at col. 310 of Hansard.

Sir Kenneth was asked about something that the noble Baroness said last week. It was put to him that the noble Baroness had said that,

When asked whether he agreed with that, he said that he disagreed profoundly. Nowhere in those other jurisdictions has it been suggested that, because of the use of intercept in this way, the methods of those carrying out the interceptions have been revealed. The question then is: if those other countries can do it safely, why cannot we?

Another arguments used by the noble Baroness last week was that, if we use intercept evidence, the prosecution would have to disclose everything, there would be a great mass of material, and that would add greatly to the length and cost of trials. That is not the case. Of course there is an obligation to disclose material that would help the defence or undermine the prosecution, but there is no obligation to disclose material described as neutral. That was the decision of the House of Lords not long ago in R v H, reported in 2004 Appeal Cases. Then there was the argument that we might run into difficulties under the European Convention on Human Rights. There was a reference to the principle of equality of arms. That does not touch on this question. The court of human rights has made it clear that there is no absolute right to disclosure; disclosure is always subject to the overriding interest of national security. That was decided in Rowe and Davis v United Kingdom in 2000.

The noble Baroness said that, in a few years’ time, present methods of intercepting conversations would be out of date and obsolete. Instead, we will have voice over internet protocol, or voice over IP. I am sure she is right that that is the way in which it is moving, but I am not sure how it affects the question that the House is debating now. To find out more about that, if I could, I had a conversation only last night with David Craig, who works for a Scottish company called Agilent Technologies. He was in San Francisco, and I was at home. The conversation took place by means of voice over IP. I could not notice any difference between that conversation and any that I have had over the telephone. He told me that voice over IP can be intercepted; it is more difficult to intercept than mobile phones or landlines, but it can be done. The problems are not insuperable. Indeed, about 150 companies worldwide have the capability of doing that. Whether or not that is so, I cannot see that

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it really affects this question. If there is to be new technology and we are going to be able to get intercept from it, by all means let us use it in court.

Two other arguments were advanced by the noble Baroness. First, that the admission of intercept in court would in some way imperil the close relationship between the intelligence agencies and the law enforcement agencies. I have heard that argument advanced on numerous occasions, but I have never begun to understand it. She said that the intelligence agencies might not be willing to co-operate with the police once intercept was used evidentially, or at least that co-operation might be endangered. They are both government agencies; surely if the national interest requires the use of intercept to secure convictions, the intelligence agencies can be persuaded to co-operate with the police.

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