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Lord Bach: And we do not know, my Lords, which is the Rottweiler and which is the spaniel! Perhaps noble Lords will make up their minds after I have made this point.

The noble Lord said that the Bill is flawed and should be taken away because of the criticisms received. If that is so, why did his party vote for its Third Reading in the House of Commons? The party of the noble Lord, Lord Cope, did not do that. It voted

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against the Bill. That seems to me to be rather more consistent with the attitude that it has taken during the course of these debates.

But the party of the noble Lord, Lord McNally, voted in favour of the Bill. Indeed, the speech of his honourable friend, Simon Hughes, praised the Bill, as did the speech of the noble Lord, Lord McNally, on Second Reading. Has the Liberal Democrat Party changed its mind about the Bill? Do his colleagues in the House of Commons know that?

Lord Cope of Berkeley: My Lords, perhaps I may intervene while the noble Lord, Lord McNally, is thinking about the answer to that question. On Third Reading in the House of Commons, my party did not vote against the Bill as a whole but voted for a reasoned amendment.

Lord McNally: My Lords, the noble Lord, Lord Bach, is obviously more used to the confrontational give-and-take of the court room than he is to the parliamentary process. In the House of Commons, yes, my honourable friend Simon Hughes supported the Bill on Third Reading as I did on Second Reading.

However, this has been an amazing process. First, there was a full-page spread in the Observer just before Second Reading. But then there has been a growing rumble of discontent from all sections of the community, the noble Baroness, Lady Thornton, excluded. In the Commons now they would be shouting, "Give her a job", but I would not do that.

We had speeches from noble Lords on the Cross-Benches last night, a number of which made the point that they had come late to the concerns about the Bill. I take tremendous pride in the way in which this House has dealt with the Bill. It has exposed flaws in the Bill. We still say that we want to see a Bill passed and we want to try to improve it as it goes through. We are not in the business of wrecking; we are in the business of improving.

But Ministers must face the fact that at the end of this process, we shall be the only G8 economy with this kind of legislation and the only economy in the world, other than India and Singapore, with this kind of legislation. Oh, I see another government loyalist rising to his feet.

Lord Desai: My Lords, hardly! I stand up to correct the noble Lord because he said we are the only country in the G8 to have this kind of legislation. I am told that Russia has had legislation like this. It is even alleged that we used it as a model, but I am not sure of that.

Lord McNally: My Lords, I never argue with an LSE professor on these matters. This legislation has a case to answer and it certainly has a case to answer in relation to access to keys. Much of the debate today is about raising the threshold for the agencies and raising the level of justification in respect of this matter. In

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moving the amendment, the noble Lord, Lord Cope, made a very strong case for the Government to accept the amendments.

Baroness Thornton: My Lords, I want to comment on the speech of the noble Lord, Lord McNally. On Second Reading and throughout our proceedings on the Bill, I have spoken from the point of view of my experience of working with children's organisations. I am concerned about the opportunities which this industry and the Internet provide in relation to children because I want those children to be safe. My knowledge of this subject is based on my experience over many years of working for NCH Action for Children, which is the leading children's organisation in this field.

I am extremely concerned about the methods which have been employed by the Foundation for Information Policy Research which has been taking a leading part in the activities and comments against the Bill. I have already mentioned one concern which is that it does not feature children's organisations or children's concerns at all among the list of people who support it.

Indeed, when it was founded, it said that it wanted to face the challenges of dealing with the debates on technology and its accessibility and to focus on social concerns. I do not believe that the organisation does that at all. It is funded and backed by Microsoft and the industry and they want this Bill to fall.

It is beholden on noble Lords who are using the lobbying material and literature of that organisation to understand where it and its supporters are coming from. They do not want the technology to be available to all or for it to be safe. They would like to have the regime which exists in America, which is protected by the First Amendment and which has no constraints at all.

I do not want the industry to grow in this country under that regime because, in America, children are kidnapped. In America, there is no restriction on the paedophile activity which can take place. In America, there is no restriction on the Nazi propaganda, bomb-making and all the other things that can take place on the Internet because the authorities in America are hamstrung by the regime under which they work. I do not want the Internet in the rest of the world to operate under that regime. This country must take a lead in ensuring that that is not the case.

This debate is not just about what happens in the UK, but it concerns us taking a lead on this issue. It is about us ensuring that the environment under which the Internet and its industries work in this country is the one that we want under our laws and under our regimes. That is why I am quite passionate about this subject, particularly as it concerns the future and our children.

6 p.m.

Viscount Goschen: My Lords, it is worth emphasising that we are now at the Report stage of the Bill. The noble Baroness, Lady Thornton, has made

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some valid points about the overall discussion of the kind of regime that we should have. The amendment is not concerned with the sanction available. Indeed, from all sides of the House, noble Lords have said that this ultimate sanction should be available should the special circumstances specified by the Minister arise.

If those circumstances are as exceptional as the Minister says, the regime should require the highest level of authorisation: that of the Secretary of State. The noble Baroness made some impassioned remarks about a sensible foundation and one that we all support in preventing the terrible criminals who have utilised electronic means to further their ends. However, I doubt that she would object to an amendment that stated that the Secretary of State should authorise this unusual event. I am prepared to give way to the noble Baroness if she wants to contradict me on that.

There is no need to rehearse the arguments about the dangers to the economy, particularly the e-commerce economy, of this country, which were so ably put by my noble friend Lord Cope in introducing the amendment and by other noble Lords throughout all the stages of this Bill. The Government should understand that noble Lords are trying to assist them in making what was a bad and unacceptable Bill which would not have worked into one which, although there are still reservations in relation to it, could have a greater level of support and confidence from industry. That support will be absolutely vital in making the Bill work.

I can think of no better way of giving that comfort to industry than to acknowledge the seriousness of what the Government are asked for, the power to access encryption keys. Once given, there is no going back. For this high level of disclosure, the approval of the Secretary of State should be given. I can think of no valid reason, if it is as unusual as the noble Lord, Lord Bassam, has repeatedly assured the House, why that should not be the case.

Lord Lucas: My Lords, it is quite clear that this Government's Bach is worse than their Bassam! I do not believe that even the noble Lord, Lord Bach, could accuse me of having become harder on this Bill as time has gone by; indeed, I find myself becoming softer on the Bill as time goes by because the Government have done so much to improve it.

I support completely this amendment in the name of my noble friend Lord Cope of Berkeley. The analogy that he made between the effect of disclosure of a key and the effect of having one's telephone tapped is good. Indeed, the disclosure of a key is potentially much more damaging to a business than is having its telephone tapped. If the Secretary of State's authorisation is required for telephone tapping, the Secretary of State's authorisation should be required for key disclosure.

If the Government agree to this amendment, they could look again at the principle underlying my Amendment No. 63 and say that the Secretary of State is required to authorise key disclosure but, if the police

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are happy that the key should be disclosed to a trusted third party, that a lower level of authorisation would be required because the danger to the company would not be the same. That would make it possible in non-urgent cases, or cases where there was not another particular difficulty, for the whole process to take place without risk to the company and without involving the Secretary of State. That would leave the Secretary of State to deal with those crucial cases where it is necessary to break into a company's vaults and to lay open the whole of the company's security network. I believe that that would be the appropriate level of authorisation for those extreme cases.

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