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The Earl of Northesk: Does the noble Lord accept that the phraseology of my noble friend's amendment is entirely consistent with the Data Protection Act? Therefore, there is existing legislation which almost obliges the Government to comply with what my noble friend's amendment seeks to achieve.

Lord Bach: I can really only repeat to the noble Viscount, Lord Goschen, what I have already said on this point. If the warrant is taken out for a particular purpose and another warrantable purpose is discovered—for example, serious crime—then it would be ridiculous to shut one's eyes to that other serious crime. But the authorities would not be allowed to take advantage of a warrant obtained for one purpose if what was discovered—I use the noble Viscount's words—were some minor misdemeanour. It will not be possible to use the warrant to achieve justice in that case.

Lord Lucas: I am comforted by the words of the noble Lord, and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord McNally moved Amendment No. 35:

The noble Lord said: In introducing this amendment let me say what a pleasure it is to see the noble Lord, Lord Mackay of Ardbrecknish in his

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place. I am glad that he has come for the night shift. He is probably jealous that this is not a DTI Bill because then he could have had all the fun.

These are probing amendments which look at the terms "national security" and "economic well-being". National security and economic well-being are vague and subjective ideas. The Bill defines neither. If activity is so great a menace to society as to justify interference with the fundamental rights of the citizen, one would expect it to be prohibited by the criminal law, with the definitional certainty that that attracts. Subject only to well-defined exceptions, prevention or detection of serious crime should be the sole ground for authorising interception.

In the field of national security, crimes of espionage, terrorism and conspiracy cover an enormous range of harmful conduct. In the field of economic well-being, offences covering fraud, evasion of fiscal and Customs regulation, insider dealing, false accounting, counterfeiting and so forth, prohibit an equally broad range of objectionable activity. If Parliament has not judged an activity sufficiently grave or insidious to justify bringing it within the criminal law, then it should not generally be regarded as a legitimate basis for interception or surveillance.

It is as to why these vague terms are inserted into the Bill that we probe. In case Members of the Committee think that this is just the concern of the civil liberties lobby, I was interested to receive a fax from the Alliance for Electronic Business which consists of the Computing Services & Software Association, the CBI, the Direct Marketing Association and the Federation of the Electronics Industry. It says that the clauses which provide that,

    "the Secretary of State to have access to information 'for the purpose of safeguarding the economic well-being of the United Kingdom' ... would give the government an unprecedented right of access to information on legitimate business activities. We believe this proposal could damage the UK's ambitions to becoming the global leader in e-business.

    The generic use of 'economic well-being' in this context is potentially a highly onerous burden upon business, allowing the Secretary of State to force an intercept requirement on a business on spurious grounds.

    It is essential that there is clear guidance, for example in the Code of Practice. We believe the only circumstances in which such a power should be exercised would be to carry out regulatory activities already authorised under existing legislation, for example, Financial Services legislation. It is absolutely vital that the guidelines have clear criteria to ensure business understands what is a legitimate requirement".

There we have both from the civil liberties lobby and from business a concern that there have been slipped into the Bill two very vague terms of "national security" and the "economic well-being" of the United Kingdom, which could be used as "catch-alls". We probe to find out why they are there.

Lord Cope of Berkeley: As far as I am concerned, I think that warrants can readily be justified if necessary in the interests of national security. That is covered by Amendments Nos. 35 and 122. I am not sure where national security is defined. It is not defined in the Bill. By definition, it would seem to be national security not involving serious crime, because serious crime is

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covered under Clause 5(3) (b). So it is national security of some other character. There are national security considerations of another character essentially covered in the jargon, as it were, by the word "spy" as opposed to "terrorist activity", which involves potentially serious crime. I am content with that.

Where I start to wonder what it is all about is when we come to (c), the subject of the second of the two amendments in this group, Nos. 36 and 123. It talks about safeguarding the economic wellbeing of the United Kingdom. That is an enormous phrase. When I was a Member of the other place I had a great deal to do with the aircraft industry and from time to time we were concerned about whether defence orders from the UK and from overseas went to British companies or to American or other companies. A great deal of time was spent on trying to make a case on behalf of our constituents and for neighbouring constituencies as well, in order that the UK could gain from these defence orders.

I believe that it was, and still is, in the interests of the economic wellbeing of the United Kingdom that these orders should have gone to UK companies. It would have been of great advantage to the companies concerned, and indeed of the Government in some respects, to have known what overseas firms were doing in respect of such contracts. To have a warrant to inquire into that kind of thing seems to me entirely consistent with the permission being given in this subsection. I hasten to add that I do not think that is what this Bill should be all about: it should be about combating terrorism and serious crime. However, they are already covered by (a) and (b) and do not need covering by (c).

These days there are other considerations, like exchange rates and other financial matters, in which it would be greatly to the advantage of British interests, both in the national sense and in the sense of British companies and institutions, to know some of the things that were happening in respect of foreign financial institutions. Safeguarding the economic wellbeing of the country is extremely important. One can argue about things like exchange rates, the euro and so on, but I am not going into all that. Is interception to be used for this purpose? Is that what is intended by safeguarding the economic wellbeing of the country?

It is not only a question of interception which is covered by Clause 5 and the first of the two amendments. Intrusive surveillance might also be used, and that is covered by the second of the two amendments. If it is thought by foreign companies that if they had a British partner, whether to do with defence, aerospace, finance or anything else, they might be subjected to the interception of their e-mail and so on, they would be much less inclined to have a British partner as their own interests might be placed in jeopardy.

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It seems to me that this is an extremely wide power, going well beyond what this Bill should generally be about. Perhaps the noble Lord the Minister will be able to reassure us.

Viscount Goschen: May I associate myself with the remarks made by my noble friend Lord Cope with regard to (3)(c)? We can see what the Bill is driving at, but the way it has been drafted is incredibly broad. There is a very substantial power here for the Government to intervene, not necessarily where they see lawlessness taking place, but for the purpose of safeguarding the economic wellbeing of the United Kingdom. That could take into account a broad variety of circumstances. For example, one can think of currency speculators acting against the pound, or of bugging Mr Greenspan's conversations and so on. One thinks of serious takeovers involving national interests, employment and so on. One does not have to stretch one's memory back too far to think of serious corporate activities in the United Kingdom in the past year or so that would have fallen within the scope of the Bill.

The Government must be more specific and tighten Clause 5(3)(c). One difficulty that the financial community and industry have with the Bill is the prospect that it may drive commerce overseas. Clause 5 has that risk written all over it.

10.45 p.m.

Lord Bassam of Brighton: I am grateful to the noble Lord, Lord McNally, for raising his probing amendments in the way he did, to flesh out concepts.

Threats to national security change over time and, as yet, Parliament has not enacted a definition. It may help if I describe our understanding of the term "national security", which has been the subject of numerous debates in Parliament over the years. Ministers and parliamentarians have defined threats to national security as any substantial threat to the nation as a whole; matters that relate to the survival or well-being of the nation; protecting the security of the nation and safeguarding its economic well-being from outside threats; any contribution to the protection of the nation's security that is clearly necessary; and the protection of freedom for us all.

Other definitions might include the safeguarding of the state and community against threats to their survival or well-being; defence of the realm and of government defence and foreign policies involving the protection of vital national interests in this country and abroad; and defence of the realm against potential enemies.

The term "national security" can refer only to matters relating to the survival or well-being of the whole nation, not political, sectional or lesser interests. As we see it, the term is concerned with espionage, terrorism and subversion, and with the acquisition of intelligence in support of the Government's defence and overseas policies. We take it that "national security" includes, but is not necessarily confined to, protecting against threats of espionage, terrorism and sabotage; the activities of agents of foreign powers;

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and actions intended to overthrow or undermine parliamentary democracy by political, industrial or violent means. Those may all reasonably be described as being in the interests of "national security".

Similarly, the term "economic well-being" could include identifying warnings of threats to the supply of energy, commodities and raw materials on which the UK is particularly dependent; identifying attempts by rogue traders or others to manipulate commercial markets, especially when such actions could undermine confidence in the City or affect the stability of financial or other markets; and developing better government understanding of events and trends that could have a serious effect on the UK economy.

The meaning of the phrase was debated at length during the passage of the Interception of Communications Act 1985, and the description used then by Ministers remains valid. Safeguarding the economic well-being of the United Kingdom does not mean industrial espionage or intelligence gathering on behalf of UK companies. In all cases, the aim of work carried out under this heading is to allow the Government to take such protective actions as are appropriate and consistent with obligations under national, EU and international law.

It is a crucial part of the UK's foreign policy to protect the country against adverse developments overseas which may have grave and damaging consequences for our economic well-being and future. Therefore, by definition, the matter must be one of national significance and cannot be what one might accurately describe as being of a trivial nature—

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