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The other amendments in my group are also probing in nature. Amendments 24 and 25, on which Amendment 31 is consequential, would remove GCHQ from the lists of bodies in Clause 12(1)(b) that may use that defence. The report of the Constitution Committee queries why GCHQ might need to be able to bribe for a legitimate purpose. While I do not think I would expect the noble Lord to go into the minutiae of Security Service operations, could he say something here to justify the scope of Clause 12?

Amendment 27 is more concerned with the mechanics of the defence, by which I mean the practicalities of raising it. In paragraph 13 of the Constitution Committee's report, it is recommended that the use of the defence

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should require prior authorisation from-in the case of the intelligence services-the Secretary of State. I hope the Minister can explain how any officers who have been required to bribe others received their authorisation. If officers for agencies of the state have acted legitimately, why do they require the defence in Clause 12? Is it not the case that the relevant Secretary of State should know what is being done on his instruction? If that is so, why would charges be brought? At what point in the process does ministerial responsibility take hold? I hope the Minister can address those points. Again, as I stressed in speaking to earlier amendments, these are probing amendments and we hope to hear what the Minister has to say.

Lord Williamson of Horton: My Lords, I am well aware that the noble Lords, Lord Thomas of Gresford and Lord Goodhart, take the view that we do not need the clause at all. That will still be tested because the question of whether Clause 12 should stand part has not yet been reached. I understand that. I will concentrate on the key point in Amendment 22-that is, how we define, if we so decide, the extent to which the defence is available to the intelligence services. In the draft Bill, the definition was much tighter than what we have now for two reasons. First, there was an authorisation. Secondly, you cannot find in the draft Bill the phrase "any function". It is not there at all. In the draft Bill it depends on what is authorised by the Secretary of State. That is relatively restrictive.

In the text that we now have, it is relatively unrestrictive-if the word exists in English. It is almost challenging to say "any function". It means that whatever you come across is covered by the defence. That has, of course, been challenged by the Constitution Committee. I think it is a mistake to extend it so widely. Like other noble Lords, I would like to hear what the Minister has to say about ministerial authorisation, and whether he would be prepared to think again about the reference to "any function". There are various ways in which that could be corrected; some were mentioned in the Constitution Committee report and some in the amendments before us. As it stands, before any of these amendments are decided, the definition is extraordinarily wide and we need to query whether that is justified.

Lord Thomas of Gresford: My Lords, the use of the expression,

may well introduce some form of restriction. I would like the Minister to focus on the word "proper"; I have a simple question for him. My noble friend Lord Goodhart has pointed out that, under the OECD convention, protection of the economy of Great Britain is not an excuse for bribery. Could the performance of a function by a member of the Security Service for the protection of the economy of Great Britain-for the safeguarding of the economic well-being of this country, which is one of the Security Service's functions-ever be a proper exercise when it would contravene the convention to which we are signatories? In other words, are we not, by using the words "proper exercise", confining ourselves to precisely the wording that my noble friend has put forward?

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Viscount Colville of Culross: My Lords, I will look at Amendment 27 in the group. Does the Minister really know how this works? Let us suppose that we are talking about a paid informer who will give information to an enforcement agency-it does not matter which-about what is going on in his workplace. That is done at the moment under RIPA. Authorisation is obtained for a person to act as a CHIS-a covert human intelligence source-to find out what is going on and to be paid for it. The authorisation does not come from the Secretary of State, but from an authorising officer in the law enforcement agency. The officer will probably be of some seniority, but not necessarily at government level. It is just not practicable to put the burden of that authorisation on the Secretary of State. There are hundreds of informers and it simply could not be done that way: one must be able to rely on the provisions of RIPA, or the Scottish equivalent, in order to provide the defence. If that is what is intended, it is a very different matter from the warrant that is available to GCHQ or the intelligence services. That is carefully looked at by the Secretary of State and signed by him, or by a senior official in his absence. We are talking about two entirely different things. The scale is completely diverse. I hope that the Minister realises that this is not the same sort of situation as the one dealt with under the 1994 Act.

Lord Pannick: My Lords, I, too, will comment on Amendment 27 in the name of the noble Lord, Lord Henley. It raises an issue of fundamental importance about the need, as the Constitution Committee saw it, for a prior authorisation procedure, which was the safeguard contained in the draft Bill. A prior authorisation procedure would provide much greater certainty and place responsibility where it properly belongs: with the Secretary of State and his or her senior officials. It is unacceptable that any intelligence officer should decide for themselves to carry out an act of bribery subject only to the risk of a criminal prosecution. Cases of bribery by public officials in order to achieve an intelligence or security result would-I hope we can all agree-be very rare exceptions. Any such official act should be carefully considered in advance by very senior officers of state, not least to ensure that there can be no later dispute about whether the officer was genuinely acting for official purposes. I have very good authority for the proposition that it is an important safeguard that authorisation should be given by the Secretary of State or by a senior official. The authority is the noble and learned Baroness the Attorney-General, who I am delighted to see here. Paragraph 200 of the Joint Committee report refers to her evidence in which she told the Joint Committee that the prior authorisation procedure was "an important safeguard". I respectfully agree with her.

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Baroness Whitaker: My Lords, my noble friend himself said that Clause 12 casts the net too widely. The net is very overstretched here. I strongly support all the amendments. I will not repeat what I said at Second Reading-the noble Lord, Lord Goodhart, set out the case impeccably, and the reference to the

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OECD convention and the Constitution Committee echo the amendment of the noble Lord, Lord Henley, on authorisation. I simply deduce from the proceedings so far that the government text has been assailed on all sides. I do not see how it can survive Report. My noble friend also referred to a concession about width. I urge him that the concession should cover the subject of these amendments and thus make a good Bill an excellent Bill.

Lord Mackay of Clashfern: My Lords, I am glad that the noble Baroness, Lady Whitaker, spoke first, because what I shall say is on the same line. First, I want to comment on the situation that the Minister developed in discussion of the previous amendment on the possible need for bribery. My understanding of the law of confidentiality, as it is also part of employment law, is that confidentiality does not protect someone in respect of crime. In other words, if someone who is bound by the obligation of confidentiality reports a crime, that is not a breach of the confidentiality requirement. Therefore, the Minister's description or analysis is more likely to apply to a case where information is being sought without any real knowledge of whether or not a crime has been committed by someone who is employing a person to whom the advantage is given. It is that situation, against the definition used in the Bill, which could give rise to a question of bribery.

A little more than 20 years ago, I was given the responsibility of introducing the Security Services Bill to the House of Lords, which acknowledged the security services for the first time. Among its provisions, as your Lordships know, was the provision about interfering with property rights, which, I suppose, was at least part of the motivation for the Bill. The authorisation procedure was introduced for that purpose. I suggest to the Minister that if there is any risk of a crime being committed on behalf of the agencies-if that is likely or possible-the best protection for the rule of law is a prior authorisation either under RIPA, for cases that are sufficiently ordinary, or by the Secretary of State.

I would hope that the occasions on which such a thing would be allowed would be very few indeed, so it would be right for it to be the Secretary of State, on the whole-as noble Lords know, there are exceptions when the Secretary of State is not available. But certainly in relation to the security services, the authorisation should be at the level of the Secretary of State, in accordance with the general provisions of the Security Services Act. In any case, if there is a real risk of bribery being committed within the definition of Clause 1 or the other clauses, that should be subject to prior authorisation at the appropriate level.

Lord Bach: My Lords, these amendments are all concerned with the Clause 12 defence as it applies to the functions of the three intelligence services. They reflect the concerns of the Constitution Committee and seek to limit the operation of the defence in various ways: first, by excluding bribery in pursuit of certain of the intelligence services' functions from the ambit of the defence; secondly, by removing GCHQ from the scope of the defence-I know that is the subject of a probing amendment-and, thirdly, by

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providing that the defence can be deployed in proceedings only with the prior authorisation of the Secretary of State, which is likewise the subject of a probing amendment today.

Let me deal with these three aspects in turn. Amendment 22 seeks to restrict the application of the defence to conduct required in the exercise of the intelligence services' national security function only. Amendment 23 is not as restrictive as it would enable the defence to be deployed in cases engaging the intelligence services' national security and crime prevention and detection functions.

The purpose of subsection (1)(b) of Clause 12 is to provide a defence in circumstances where the Security Service, the Secret Intelligence Service and GCHQ may have to use financial inducements or rewards to carry out their relevant functions. As we have just been reminded, those functions are set out in statute. It is right that the Bill should mirror them and not take a selective approach which would undermine the ability of the services to discharge their legitimate purposes as previously endorsed by Parliament.

Moreover, in order to be effective, the defence cannot be focused on only part of the intelligence services' statutory functions. All of the statutory provisions under which each of the services fulfil their respective roles refer to the three purposes on which their work focuses. These are national security, the economic well-being of the nation, and the prevention or detection of serious crime. Each of the relevant statutes deals with how the services exercise their functions in slightly different ways. The position of the Security Service is slightly different, but certainly the Secret Intelligence Service and GCHQ need to exercise their statutory functions across the entire range of the three purposes. That range is intended to cover matters that are of significant national importance but not necessarily matters that relate simply to national security. There is-this is the point I am trying to make-considerable overlap between the three purposes. They are not neat silos and it is not practicable to seek to distinguish one as being more important than another. It is true that the national security category is quite broad and would cover many operational needs.

The noble Lord, Lord Williamson, for whose general support I am more grateful than he knows, issued a gentle word of criticism about the expression "any function", and said that there was no such reference in the draft Bill. However, the expression "a function" appears in Clause 13(4) of the draft Bill. I argue that it has effectively the same meaning as "any function" in the context of this Bill. What we are referring to here are the statutory functions contained in the Security Service Act and the Intelligence Services Act.

I shall give an example of the response of the services to a planned terrorist outrage. It is obvious from this that it could fall within two or three of the statutory functions that I have just outlined. If there were a planned attack on a power station, the response might amount to action to protect national security and to protect, quite legitimately, the economic well-being of the nation. Other operations might fall entirely under one or other headings.

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Similarly, information-gathering on the part of GCHQ or the Secret Intelligence Service, in support of a number of linked investigations into large-scale fraud or other financial irregularities that are of significant relevance to the economic well-being of the UK, may not naturally fall within the scope of the national security category. Perhaps of even more significance is the fact that a single operation may comprise a number of parts, each of which may fall to different categories.

The point is that it will not always be clear, at least not always initially, what precise function the conduct in question related to. Moreover, it would be wrong to deny the defence where the conduct occurred in the pursuit of one of the functions that Parliament had actually conferred on the services because it appeared, on a later analysis, that the case did not fall within the scope of one specific function. Our proposition is that reliance on the national security category alone would be inflexible and, frankly, operationally ineffective.

I know that some noble Lords will be particularly concerned about the inclusion within the scope of the defence of conduct on the part of the services in order to protect the economic well-being of the nation. There is nothing particularly mysterious about this category of work by the services. Under this heading, the services might act to safeguard and/or obtain intelligence in the interests of the national economic interest. Clause 12 expressly excludes any offence involving bribery of a foreign public official, thereby complying, we would argue, with the OECD convention.

To go back to economic well-being, the services may, for example, employ conduct that amounts to bribery under the Bill in order to monitor events and trends that might have a serious effect on the UK economy as a whole. That would include intelligence on instability in a part of the world where substantial British economic interests were at stake or where the economic well-being of the UK was threatened by hostile states seeking to undermine this country's economy or to use economic levers as hostile policy tools. The services may exercise their functions in support of UK foreign policy where adverse economic or political developments overseas pose a serious risk to UK or global economic security.

Another example would be to provide warnings of threats to the supply of energy, commodities or raw materials on which the UK is especially dependent, or perhaps to identify external attempts to manipulate commercial markets, especially when such actions could undermine confidence in the City of London or affect the stability of other financial markets.

I hope that the Committee-especially those who have been Ministers; the noble Lord, Lord Henley, reminded me that many noble Lords here have been very senior Ministers in the past-will appreciate that I cannot give examples of actual operations. I hope that noble Lords can surmise that the UK intelligence and security services may seek to identify, recruit and run sources in a manner that may sometimes involve the use of conduct that would amount to bribery under the Bill in order to allow reporting on these intelligence requirements. This would be done only where such conduct was assessed as necessary and

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proportionate in accordance with the services' respective statutory functions. Further, in all cases the matter must be one of national significance, and the aim of operations conducted under that heading is to allow the Government to take actions appropriate and consistent with obligations under national, EU and international law.

Amendments 24, 25 and 31 would exclude GCHQ from the operation of the defence. GCHQ can exercise its intelligence function only in relation to national security, the economic well-being of the UK and the prevention and detection of serious crime. In other words, the exercise of this function is exactly limited in the same way as those of the Secret Intelligence Service and the Security Service.

Despite GCHQ's focus and expertise on all matters relating to communications monitoring, it would be wrong to assume that the organisation does not also fulfil a more active operational role. It is true that, compared to the other intelligence and security services, there are far fewer circumstances in which GCHQ would need to do things that would be an offence under the Bill; in particular, the scenario of rewarding an agent for information of intelligence value would seldom arise. However, I emphasise that that does not mean that there are no relevant circumstances that could apply to GCHQ.

In order to maintain a strategic interception capability and to continue to provide intelligence on certain targets critical to our national security, GCHQ may need to provide equipment or assistance to individuals who are in a position to support its interception mission in challenging environments. The Committee will of course understand that it would be potentially damaging to intelligence capability to provide particular examples. However, I can indicate that, in some cases, the provision of equipment or other assistance would be likely to constitute the conferring of an advantage as an inducement to undertake, or reward for, conduct that would amount to a breach of an expectation that the person will act in accordance with the position of trust owed to their employers; in other words, it would be an offence under the Bill.

To avoid doubt, and in order to allow GCHQ to reassure its staff that any such activity that is a proper exercise of its functions is within the law, the Government believe that the defence in the Bill should be available to GCHQ on the same basis as the other services. Moreover, this role may of course be fulfilled in partnership with the other services. The inability of GCHQ to deploy inducements where it is necessary in order to fulfil its operational role could obviously potentially compromise operational effectiveness of all three intelligence services. It would therefore clearly be wrong to exclude GCHQ from the scope of the defence,

Finally, Amendment 27 would limit the use of the defence by requiring the Secretary of State to authorise its use in proceedings. A similar proposition has been put forward by the Constitution Committee, which argued that,

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by the Attorney-General or Secretary of State. As the Committee will recall, the Government put forward an authorisation scheme in the draft Bill. However, it did not find favour with the Joint Committee when it examined the Bill; we have already had that paragraph read to us. That authorisation scheme provided for a system of authorisations prior to the conduct in question. A different approach would be to require authorisation after the conduct had occurred but before the defence was deployed.

Having reflected on our original proposals in the draft Bill and the Joint Committee's response to that Bill, our view is now that the defence in Clause 12 is preferable to an authorisation scheme, whichever of the two models, prior or post, is adopted. In contrast to the authorisation scheme in the draft Bill, the Clause 12 defence is case-specific and ensures that the necessity or otherwise of the conduct is tested by reference to the roles of individual people and the particular circumstances of individual cases. Ultimately, whether the defence is made out could be a matter for the court or jury to determine.

Noble Lords will remember that the draft clause referred to class authorisations and authorisations that lasted for a long time; it was unspecific and wide. The proposals here are preferred. We are not persuaded that the defence should be augmented by an authorisation scheme of the kind provided for in Amendment 27. That would require the Secretary of State to authorise the use of the defence in a particular case. Such a scheme would have some of the same drawbacks as a reliance on prosecutorial discretion; there would be no certainty at the point at which an offence was committed that the defence would be available. It would be an unwelcome and ill-advised development in our criminal process for a Minister of the Crown to decide whether a statutory defence should be available to an individual charged with an offence in a particular case.

Such an arrangement would be all the more objectionable if prior authorisation had to be given by the Attorney-General. The Attorney-General would have an overall responsibility for the prosecuting authorities who would be bringing the case and would be put in an invidious position if she were also to have the role of deciding whether a person being prosecuted could or could not rely upon a defence. In any event, we are not aware of any other example where a law officer or a Minister is given a power to decide whether or not an individual who is being prosecuted for an offence can rely on a defence to a charge. Moreover, we consider that to combine the defence with an authorisation scheme would introduce unnecessary duplication into the Bill. A prior authorisation would negate the need for the defence and vice versa. The scheme proposed in the Bill represents the most appropriate response to this issue.

I hope that the noble Lord, Lord Goodhart, having heard the arguments I have employed, is persuaded to some extent. Under the rules, he will have to withdraw his amendment today but I hope I have persuaded him to do a little more than just that.

Lord Mackay of Clashfern: My Lords, how does the Minister anticipate that the system he is advocating in the Bill will operate in relation to the security

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services? Is it feasible that security services' operations should be considered in detail in a criminal trial? It is like the situation with intercept evidence. How will it work? I know there is a possibility of closing the court in certain situations, but details coming into an open court, whether in private or in public, involves a degree of difficulty at the least.

Lord Bach: The noble and learned Lord makes a good point. We should not forget that prosecutorial discretion always exists under the law. When considering the case in or his or her independent way, the prosecutor will obviously have to have in mind the defence in the Act in deciding whether or not a prosecution is appropriate in the circumstances. Given that the defence will be on the statute book-I am being frank with the Committee-we expect that many cases might end there. However, it would not preclude a trial if the prosecutor decided that a prosecution was appropriate, in which case the issues raised by the noble and learned Lord would come about and the court would have to find a way of dealing with extraordinarily sensitive evidence. However, we do not anticipate that that would happen very often.

Lord Goodhart: My Lords, once again we have had an interesting debate in which there has been no support for the Government. There is criticism of what the Government are proposing in Clause 12 in the powers covered by Amendment 22. I have made my arguments on that and I do not want to resume them, but I want to mention some of the other amendments in the group.

Amendment 23 is more limited than our Amendment 22, because it does not eliminate the right to legitimate bribes in cases involving serious crime. However, it strikes out the provisions of Clause 12 that extend to cases where there is potential bribery for the purpose not of preventing damage to national security or of preventing crime, but of preventing something that will damage the British economy. Both my Amendment 22 and Amendment 23 of the noble Lord, Lord Henley, remove the possibility of legitimating bribery for economic reasons. I believe that that is required by the OECD convention, which we should plainly stick to.

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