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Lord McNally: Just in case those on the Conservative Benches have another rush of blood to the head, if a Division is called, we shall support the Government. But before those on the Government Benches become too ecstatic, I should say also that if the Government's reply to this debate is not suitably constructive, we shall consider pressing this matter very firmly indeed on Report.

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The noble Lord, Lord Cope, has put his finger on the central dilemma that we have in dealing with this Bill. As I believe I said on Second Reading, it is quite clearly a pantomime horse of a Bill. It is a regulatory Bill dealing with old post and telecommunications legislation and it is a regulatory Bill to deal with the new world of e-commerce. The e-commerce part of the Bill is extremely difficult for Parliament to deal with.

Mr John Norton thinks that we are "boobies" dealing with this matter. Again, at the beginning of our proceedings, I said that it might have been better had we resolved into a Standing Committee which could take evidence from the experts. It is very clear that many of the matters which we are discussing and the powers for which the Government are asking need "future-proofing" so that we do not pass legislation which is almost immediately out of date because of changes in technology.

I must say, too, that I am rather worried about the Home Office assuming regulatory powers over business in that way. Again, one's suspicion is that it was too hot for the DTI to handle and the good old Home Office, fulfilling its Lord Mayor's Show role, comes along to sweep up this matter.

Certainly, the Home Secretary has become extremely tetchy with business. Not only has he fired off letters to the Financial Times, but there have been extensive and detailed briefings about how much industry is over-egging the pudding and exaggerating the costs and burdens. If the Home Secretary has friends in the e-commerce industry who are genuinely expert on the implications of the Bill and who agree with him that the costs and burdens are reasonable, those friends had better speak up fairly quickly because the array of informed business opinion against the Home Secretary is considerable. This House should seriously take account of that.

Also, the noble Lord, Lord Bassam, and Ministers in the other place have promised that they are in listening mode. Again, my advice to them, before we reach Report, is to get alongside the industry--those in the industry have a number of reputable umbrella bodies to which they can talk--and to get the industry to say what are reasonable burdens, because then the criticisms of these Benches in relation to cost will melt away.

However, I do not think it is enough for the noble Lord, Lord Bach, simply to look irritated from a sedentary position when every informed source in e-commerce says that the burdens are too much and that they will have long-term damaging effects on our hope of becoming a world centre for e-commerce. That is a serious charge which the Government must treat seriously and answer if they are not to find that this House lacks confidence in this legislation.

The suggestion of a technical approvals board has considerable merit. For the same reasons, I am extremely worried about the Home Office taking on judgments without proper and expert help, not least because, as was mentioned by the noble Lord, Lord Cope, we are trying to deal with a rapidly changing,

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highly technical industry. The technical approvals board is a reasonable and practicable suggestion for "future proofing" the legislation.

Today, we on these Benches are in listening mode. However, we hope that the Ministers and the Home Office take seriously our belief that in this matter there is a case to answer.

Viscount Goschen: I support the amendments moved and spoken to by my noble friend Lord Cope. There seems to be little difference of view among all parties who have contributed to this and previous debates in this Chamber and, indeed, among independent commentators and figures from industry about support for the objectives of the Bill.

We all want to prevent crime on the Internet and ensure that the Government have at their disposal the maximum tools reasonable to combat the sort of hideous crimes that we have seen and heard about taking place on the Internet. I do not believe it is possible to do that efficiently without the support of the industry. However, it is clear that high levels of concern are being voiced from all quarters within the industry.

Industry knows more about e-commerce than do the Government, and will continue to do so. As has been stated, the technology is moving extremely fast; faster than the time it will take for the Home Office to consider all the implications. I would also suggest that the competitive balance within this new industry is changing extremely rapidly. National borders present one of the interesting challenges faced by the Internet. Clearly, this is an international industry and an international solution needs to be found.

The amendments tabled by my noble friend do not claim to solve the problem. However, they go some way towards allowing industry a statutory position to contribute to the debate and to ensure that those who seek to regulate the industry do not take precipitate action, or at least advise against that. In the final analysis, the decisions will be with the Government.

I believe that industry genuinely wants to help. It does not want to be associated with a pariah sector known to be a haven for crime. Industry will be in the best position to ensure that government regulations can be made as effective as possible. Clearly, the Bill poses a very real threat to the competitiveness of the e-commerce industry of the United Kingdom. I support the objectives of the Bill. However, mechanisms must be found to ensure that the concerns of industry are minimised, its support garnered and the regulatory regime made as robust as possible. I strongly believe that the amendment will contribute to that.

Lord Desai: I did not speak at Second Reading, so I beg indulgence to speak in Committee. This group of amendments is crucial to the whole nature of the Bill.

My main concern is about the civil libertarian aspects of a blanket licence to intercept. I have been following the debate in the newspapers. I should like positive assurance that just as telephone tapping is used carefully and only under strict conditions,

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interception powers will be so used. It is alarming that employers can get away with reading their employees' e-mail. We are living in a country in which everyone can be hacked into by everyone else. If the Government were also to enter into that game, in possession of enormous powers, I would worry about the civil liberty aspects of the Bill.

Whatever the fate of this group of amendments, I see that the technical approvals board will include industry representatives and security representatives but no citizens representatives. I refer to ordinary users such as myself--people who are not Internet service providers but who are worried that their communications will be exposed. That is the first point on which I should like to lay down a marker.

Secondly, there is the much more contentious problem of whether or not such provision will mean an enormous cost to e-business. I have not read the report published by my colleagues at the London School of Economics. However, I have read the newspaper summary and heard the reply given by my right honourable friend the Secretary of State. I am not satisfied with either. As the noble Lord, Lord McNally suggested, we need expert judgment on whether the LSE report is valid. If it is not valid, it is no good just saying, "It is flawed". That sort of Oxbridge talk will not do. We need to know where it is flawed, point by point. We need alternative estimates of cost, subject to examination by an impartial evaluator, perhaps from abroad, who can tell us whether we are correct. That is important.

I am not such a great admirer of self-regulation as I used to be. We have seen the many mistakes made in the financial sector. I do not believe that e-business should be self-regulatory in this respect. However, if costs are to be imposed for such regulation, which is important for crime prevention, they should be independently assessed.

Finally, I refer to technical progress. I believe that things will change rapidly. In one sense, that cheers me up immensely. It means that if governments are behind the times, any legislation will soon be obsolete and I will have more civil liberties protected. However, unless we build in a provision to take care of technical progress, we will be back here in two years' time with another Bill of this kind. I hope we can prevent that.

Lord Swinfen: Many years ago, when the Data Protection Bill passed through this Chamber, it was handled by the Home Office. At that time it became apparent that the Home Office did not know how computers were being used or that they could talk to each other internationally. I wonder whether the Home Office today know as much about computers, their use and what they can do, as the professionals mentioned in Amendment No. 54. I refer to those who are technically-up-to-date and aware of new initiatives which are likely to come onstream in the near future. That is not the task of the Home Office. It is not a commercial organisation. If the Government do not like Amendment No. 54, I strongly advise them to table a similar amendment at a later stage.

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Civil liberties have also been mentioned. I am concerned about medical confidentiality. I should declare an interest. I run a trust which sets up international tele-medical links using e-mail to help people who need expert medical advice in far-flung corners of the world. Knowing that their medical details can be intercepted, seen and examined will not please a number of those individuals.

4 p.m.

The Earl of Northesk: I support the amendments of my noble friends. Few of us involved in the legislative process have time to keep pace with our mailbags, let alone keep up to speed with technological change. It has to be said that many of us, from senior members of the Cabinet down, are honest enough to confess that, although we are full of admiration for new technology, we do not really understand it, and are content to leave it to our children to, as it were, programme the video recorder. Under no circumstances should we underestimate the problems and difficulties that this poses.

Last week's report from the British Chambers of Commerce states:


    "The Government has substantially underestimated the cost of compliance by ISPs. The most realistic estimate is in the order of £640 million over the next five years".

As the noble Lord, Lord McNally, has pointed out, the gulf between that opinion and the Government's is huge. The important point is that if business and the ordinary citizen, even governments, are to have faith in e-solutions, the associated burdens, particularly in terms of costs and security, have to be seen to be both accurate and proportionate. To my mind, this gets to the heart of why a technical approvals board is so necessary. In every sense it would ensure the proportionality and functionally of e-solutions from an independent position of technical expertise. That has to make sense.

Having said that, I should now like to speak to my amendments in this group, Amendments Nos. 51A and 53A. With regard to Amendment No. 53A, in the event that the Government accept the wisdom of my noble friends' suggestion of a technical approvals board, it strikes me that their thoughts as to the practicality of obligations imposed by Clause 12 should, as a matter of course, inform the process; hence the amendment.

Regarding Amendment No. 51A, Clause 12(6)(c) refers to,


    "such persons with statutory functions in relation to persons falling within that paragraph".

I assume that this refers to Clause 12(6)(a). Perhaps the Minister could confirm that assumption. It is not immediately apparent from that text whether that is the case. I simply ask whether the clarity of the drafting would be improved by having the paragraph referred to expressly specified rather than asking the reader to rely on his intuition. I hasten to add that I have no problem at all with the sense conveyed by paragraph (c); of course, the category of persons defined are appropriate consultees for the purpose.

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This leads me to the phrase "as he considers appropriate" in line 31. It will come as no surprise to the Minister that I have a more deep-seated objection here. It strikes me that this form of words sits uneasily with the intention expressed by,


    "the Secretary of State shall consult".

As I read subsection (6), it imposes an obligation to consult. That is explicit in the use of "shall" rather than "may". All good and well. But the phrase "as he considers appropriate" could be taken to represent an unnecessary and unwelcome dilution of that obligation. Perhaps the Minister could offer some explanation for that.


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