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Lord Marlesford: My Lords, perhaps I may support the noble Lord, Lord McNally, and my noble friend

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Lord Howell of Guildford by making one point. I do not necessarily blame the Government for trying to introduce this mistaken approach. I think it is possible that they have been badly advised by their officials. I am going to take two minutes of your Lordships' time to tell a story from the past, which in a sense illustrates that Whitehall officials are not necessarily the best people to advise on what the real electronic world is about.

Just before 1970, when I was young and enthusiastic about the capabilities of computers, I remember saying to a senior official in the Ministry of Health what a good thing it would be if the government were to start to make more use of computers in the administration of the National Health Service. The official said charmingly to me, "Mark, before we spend public money on computers, we have to be sure that they are here to stay".

I use that story as an example because the problem is almost certainly the advice that the Government have been getting. I would suggest that the advice that has been showered upon us from all sides is probably more relevant and should take precedence over the advice that Ministers have received.

Lord Lucas: My Lords, in speaking to Amendments Nos. 50 and 51, I should perhaps start by pointing out that my decision about what to do with the amendments will depend almost entirely on the answer to the question that I have now asked three times without receiving an answer. As Clause 49 is set out, is there or is there not a major hole in the Bill as a result of the ability of a police officer who holds encrypted information to refuse to provide that and instead make someone divulge the key? If there is not, perhaps we should give the Bill a chance to see how this will work in practice. However, if we are looking at a provision that contains a large hole about which the Government intend to do nothing, it is clear that we should not allow this part of the Bill on to the statute book without a long period of further reflection.

Part III covers a system for allowing the police and others to require keys. In practice, this will be largely ineffective. Anyone with a key will presumably carry that key in the form of a password inside their own head. Refusal to give up the key in circumstances where it might damage a person will, first, incur only a light sentence. In any case, there will be a powerful incentive not to divulge it in the first place.

Secondly, it must now be clear to the Government, following the judgment given in the speed camera case, that the Human Rights Act will be invoked on this matter. It is not possible to compel in statute someone to divulge a key held only in their head. That would amount to self-incrimination. If the Government have not yet taken detailed advice on that point, surely it is now time that they do so. As I said, it is clear from the judgment made in the speed camera case how a judgment in a case of this kind will be made. It may be that the Government wish to argue the toss here, but they must realise that the odds are stacked against them.

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This provision confers a right to require keys which is likely, at the end of the day, to reveal very little. It leads the police down a blind alley. It would be far better for them to try to acquire information through forensic hacking and by using conventional techniques such as intercepting communications at the computer; namely, by placing a bug, say, between the keyboard and the computer and collecting sufficient keystrokes to be sure that the password has been picked up during the course of such an operation. Many other procedures can be used rather than acquiring keys. I do not believe that this part of the Bill will, in practice, do much for law enforcement.

On the other hand, this part of the Bill may do immense damage to the economy of this country. If someone is considering where to site an electronic operation protected by keys, the security of that system will be of enormous importance. During the passage of the Bill, the Government have done a great deal to improve on the original legislation. I had thought that we were moving towards the point where we had something that was worth letting go. However, I am very disappointed by the consistent refusal of the Government to answer my one final question. The noble Lord, Lord Bach, points to his noble friend the noble Lord, Lord Bassam. However, I gave the noble Lord, Lord Bach, an opportunity to respond a little earlier. If he had so responded, I would not have had to make this speech.

Lord Bach: My Lords, I hope that the noble Lord will be a little patient.

Lord Lucas: My Lords, the difficulty about being patient at Third Reading is that noble Lords have only one opportunity to make a point. I want the noble Lord to be quite clear about why I place such importance on my question.

Many international businesses need to decide where to place their keys. Wherever those keys are placed, it is as sure as eggs is eggs that the administration systems will follow. Wherever administration systems are set up, that location is likely to develop into the commercial heart of the business. Over time, if people cannot trust the UK as a safe place in which to store their keys, businesses will flow out of this country. That loss will be felt first in concerns such as Internet service providers, but later it will affect anyone dealing with confidential information on a large scale. The damage will be slow and insidious, but ultimately it will cause devastation in our business community.

As the noble Lord, Lord McNally, remarked, we are sticking our neck out here. This is the only major country that has so far opted to confer powers on its government to acquire keys. If others do not follow that route, we risk allowing every other country to point at the United Kingdom and say to business, "Your keys are not safe in the UK. They will be safe with us. Come here instead". Others will win business as a result. Over time, they will win a great deal of business.

As I said, I had hoped that the Government had moved sufficiently to allow us at least to give them a chance. However, I shall listen carefully to the

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Minister's remarks. If he has not satisfied my concerns, I shall return to the matter when we reach Amendment No. 50.

6.15 p.m.

The Earl of Northesk: My Lords, I am sure the Minister is aware that I could--I am tempted--make a long and impassioned speech on this point. I hope, therefore, that he will be pleased to hear that I intend to limit myself to only one observation.

I hope that the noble Lord will not resort to the argument that the recent announcement from the White House Chief of Staff, John Podesta, that the Clinton administration is considering similar legislation to the Regulation of Investigatory Powers Bill, is proof of how clever has been the United Kingdom in this area. The fact is that Mr Podesta's intervention concerns far more the protection of the dubious legality of the FBI's use of its cyber surveillance system, Carnivore.

My feeling here is that they would be much better advised to rely on the words of Esther Dyson as a commentary on the true position of the United States.

Lord Desai: My Lords, I am a little puzzled about this point. Noble Lords know that I did not much like this Bill in the first place, although my concerns lay more in the area of civil liberties rather than the effects on business. I do not feel any particular loyalty to the Bill. However, it is clear that the Government have moved a long way to clarify, accommodate and adjust the Bill. As a result of those efforts, the measure is now far better than it was when it began its journey through the House.

Two arguments have been advanced here. First, the technology is progressing so fast that it is not worth passing the measure. Secondly, the provisions are so dangerous that business will be driven away. Can a Bill be dangerous and ineffective at the same time? That appears to be a very strange combination. Either the Bill is ineffective, so it does not matter all that much, or it is dangerous, but no one has yet convinced me that it is dangerous.

If the noble Lord seeks to divide the House on this clause, I shall not be able to join him in the Lobby. I hope that he will not choose that course. If we stick by the improvements that have been made, we may yet pass a good Bill.

Lord Cope of Berkeley: My Lords, I think it is a little late to say that we shall still "get a good Bill". Only a few short debates held under strict rules--of which we have been reminded by the noble Lord, the Lord in Waiting--separate us from the point at which the Bill will pass into statute.

At the start of our debates I was impressed, and I remain impressed, by the sustained opposition made against the clauses permitting the police and others to demand keys. That opposition has come from many different groups, ranging from civil liberties organisations through to organisations in the City, the

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CBI, trade unions and so forth. All those groups have expressed their extreme worries about the provisions as a whole.

Nevertheless, while dealing with the Bill, I have adopted the policy of doing my best to improve it. Others have done so as well, both on this side of the House and, it must be said, on the Government Front Bench. I believe that it is now a better Bill for that. However, the point of principle here--the amendment goes to that point--remains as to whether, even though the Bill has been improved and more safeguards have been put in place, the Bill is still dangerous.

With respect to the comments made by the noble Lord, Lord Desai, I do believe that the Bill can be both ineffective and dangerous at the same time. One must consider the different aspects. Should the police and other law enforcement agencies discover that they cannot use this provision to acquire information, it will be ineffective. Criminals may be able to avoid the provisions simply by locating e-mails offshore, forgetting their passwords and so forth. If criminals can take such steps, the Bill will be rendered ineffective from the point of view of law enforcement. However, the Bill will still prove to be dangerous to the economy if it frightens away people who would otherwise consider investing over here.

The Prime Minister, along with everyone else, supports the notion that Britain should be at the forefront of the e-economy. We aim to support not only the e-commerce companies themselves, but all kinds of companies using the Internet and the Web to improve their businesses. That is the way forward. If we include in the Bill a provision for government agencies to demand keys--the only one in the world--even if it is not often used, it could frighten off business. It could be dangerous from a commercial point of view, even if it is not effective. Although we have improved the Bill immensely, there remains the valid question of whether this legislation will prove both dangerous and ineffective.

My noble friend Lord Lucas has returned several times to the question of whether there is a hole in the Bill--not in terms of its effectiveness for the law enforcement agencies, but in terms of the safeguards that we have so carefully piled up in an attempt to better the Bill's provisions. Will those safeguards in themselves be ineffective? If they are, we have wasted our time adding more safeguards. We have an indication that we are about to be reassured on that point by the Minister. However, without it, we may have wasted our time in attempting to improve the safeguards, even though on the face of it we have succeeded in doing so.


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