HL Deb 11 March 1997 vol 579 cc253-94

House again in Committee on Clause 1.

Baroness Hollis of Heigham moved Amendment No. 16: Page 4, line 43, at end insert— ("() Any information supplied under this section to, or to a person providing services to, the Secretary of State or the Northern Ireland Department, shall also be supplied to the person to whom it relates, after the completion of any investigation to which the information is relevant, for the purpose of allowing comments on its accuracy.").

The noble Baroness said: This amendment seeks to hold the balance between the right of the individual as regards information which has been collected on suspicion of fraud and the public interest to ensure that investigation of that fraud is not impeded by the subject being tipped off, so to speak, that he is being investigated by being shown potentially incriminating evidence. We are trying here to hold the balance that, when the evidence has been collected in full but before any possible action has been taken, at that point only does the individual have the right to see it rather than to be shown the material incrementally, so to speak, as it is gathered.

I am moving this amendment at the request of the local authority associations. It is obviously not targeted at the so-called "little man", the aberrant tenant, but at serious, high value, organised, professional fraud; for example, of the landlord with several properties and dozens of fraudulent claims which may have taken weeks of investigation. If he is tipped off too soon, the books, the properties and the tenancies may be laundered, the case aborted and the recovery of moneys and the opportunity to prosecute for fraud are lost. It is vital in an almost quasi-police sense that the integrity of the investigation is not compromised or jeopardised because information has been released too soon to the suspect claimant for verification.

As I said, I have been pressed on this amendment by the local authority associations, which are at the cutting edge of such investigations. We believe that it holds the balance in that the suspect claimant has the right to verify information, but only when it has been fully collected and not incrementally, which would perhaps otherwise cause the loss of the opportunity to prosecute for serious fraud. I beg to move.

Earl Russell

This amendment comes extremely close to Amendment No. 17, which is in my name, and Amendments Nos. 30, 43 and 46, which make the same points but at different parts of the Bill. There is just one point where we differ, and here I believe that the noble Baroness has made a very convincing case for having worded her amendment differently from mine; namely, the words, after the completion of any investigation to which the information is relevant". I believe that I should have put in those words. So it may be for the convenience of the Committee if I speak to the points which relate to the issue on this amendment rather than on my Amendment No. 17.

The case for checking the accuracy of data is very strong indeed. Perhaps I may for a moment revert to the case of the American bank about which we had a little fun earlier this evening. The Minister told me that instead I should have relied on a good Scottish bank. I have now taken his advice and I am extremely glad that I have done so. But I was misled into doing the wrong thing by following market forces. I do not know whether the Minister would wish to comment on that. I should also say that that American bank announced that it was going to inform all credit agencies that my credit rating should be altered because I was unreliable.

Supposing that the bank had actually done that. It would really have been quite important that it should have informed me so I could have contested the point, as I can assure the Committee I would have done most vigorously. The same thing can happen with social security data. Suppose the benefit office possessed data that somebody had been guilty of social security fraud. They might find that their claims were scrutinised at a great deal more length than they would have been otherwise, and if they were destitute it would take a great deal longer to get food than it would have done in other circumstances. It can be extremely damaging to have wrong information about one publicly circulated. One needs to check the accuracy of it. One needs to be able to put forward a rebuttal. Indeed, I believe that the principles of natural justice bear on this issue. One of those basic principles is that one should hear both sides, which means that before any damaging decision is made against one, one should be able to contest it and make representations and put one's own side of the case.

In fact, failure to accept some amendment along these lines might possibly risk rendering proceedings under the Bill liable to judicial review. The noble Lord, Lord Lucas, will perhaps remember that we had some debate on the Housing Bill about the drafting of legislation in such a way as to make judicial review more likely. I believe that any government who do that are pickling a rod for their own back. So it might be wiser to accept an amendment along these lines and see whether the danger can be removed or at least mitigated.

As for the point on which our amendments differ, after the completion of any investigation", it is presumably the intention of the noble Baroness that those words might also mean before any proceedings are instituted.

Baroness Hollis of Heigham

I am grateful to the noble Earl for giving way. I believe I did say that the point we are talking about was after information has been collected but before prosecution may be instigated. At that point the person being investigated should have the right to comment on the accuracy of the data held.

Earl Russell

I thank the noble Baroness very much. That confirms me in my judgment that her amendment is better than mine and therefore I am happy to support it.

Lord Mackay of Ardbrecknish

This amendment would modify new Section 116A of the Social Security Administration (Northern Ireland) Act introduced by Clause 1 of this Bill. However, as we have heard, the issue goes a good deal wider than that.

The amendment would require that in each case where information has been supplied by the Inland Revenue, and after any necessary investigations have taken place, the person who is the subject of the information must be given a copy of the information for the purpose of allowing comments on its accuracy. As drafted, the amendment applies to the information supplied about any individual, whether or not use of the information for the purposes specified in the relevant section had actually resulted in an investigation. The proposition is a simple one: if relevant information about a person has been supplied to the Department of Social Security, a copy must also be supplied to that person.

The proposition is not only simple; it is also unnecessary and potentially very costly for the taxpayer. It is unnecessary because each individual already has a right, under the Data Protection Act, to ask for a copy of the details of personal data held about them on computers. The DSS provides print-outs of information held on all its computer systems on request. The requests are handled by the central Data Protection Unit, located in the Contributions Agency, which deals with all requests on behalf of the department. Individuals who want a copy of the information held about them may write to any DSS office. Although the Data Protection Act allows data users to levy a charge of up to 10 per request, the department makes the information available free of charge. The Act provides that the data user must respond to a request within 40 days of receipt. Similar arrangements apply in Northern Ireland.

The amendment is clearly concerned with the possibility that the information which has been supplied to the Department of Social Security might not be correct, and that the individual concerned should have an opportunity to comment on its accuracy. In the normal course of business we will normally contact individuals where there is an inconsistency or incompatibility of information which cannot easily be resolved; for example, where contributions have been paid at the wrong rate, or by a person who does not appear to be liable to pay contributions, or where the information from the tax authorities is inconsistent with the information given on a benefit claim. But to require a notification to the individual in every case where information was received—even in cases, which I suspect will be the vast majority, where the information is correct and is consistent with social security information already held—would he exceptionally expensive and, I would suggest, in many cases be just an irritation to contributors and claimants. For instance, the vast majority of information passed to the DSS and Northern Ireland department for use in relation to contributions is information about the amount of contributions which the individual's employer has deducted from their earnings under the PAYE arrangements along with income tax. For the UK as a whole, about 45 million items a year are posted to over 20 million individual NI accounts using information supplied by the Inland Revenue.

The amendment would require the DSS to notify each and every one of these individuals of the details provided by the Inland Revenue in order to enable them to check its accuracy. From the fact that the noble Baroness is shaking her head, I assume that the Opposition do not intend the amendment to do that, but I believe that that would be one of its unintended consequences. There is a problem because the Department of Social Security encompasses the national insurance contributions system. We get a lot of information from the revenue because we team up to collect the information. I do not think that that

Baroness Hollis of Heigham

I am grateful to the Minister for giving way. I am perfectly willing to concede that the amendment may be defective, but I did not think that it was quite as ambiguous as the Minister has suggested. The amendment refers to, the person to whom it relates, after the completion of any investigation to which the information is relevant". In other words, we are not asking for automatic print-outs on every species and sub-species of information which the DSS may hold. If there is a suspicion of fraud, the amendment seeks to ensure that before a prosecution is mounted but only when all the information has been gathered in, the person suspected of fraud may be able to check the accuracy of the information. It may then be that the prosecution for fraud is obviated. It may not be necessary because there may have been a mistake. This is an attempt to hold a balance between the claimant's right to know and the refusal to jeopardise what might be a successful prosecution because the person concerned has been tipped off too early because the information has come in incrementally in dribs and drabs.

The amendment is very much focused on the point at which one might start a prosecution. We are seeking to ensure that before a prosecution is mounted, the person suspected of fraud should have the right to check the accuracy of the information. I should have thought that the Minister would say that that was a good idea.

Lord Mackay of Ardbrecknish

Clearly—

Baroness Hollis of Heigham

If the amendment did not convey that, I can only apologise because that was our intention.

Lord Mackay of Ardbrecknish

Clearly, we read the amendment rather wider than the noble Baroness had intended. I accept that, so I shall leave my points about the Contributions Agency and go on to say that we are, however, all agreed about the need to ensure that the data held is correct, and that it should be accessible in accordance with the Data Protection Act. I appreciate what the noble Baroness said and that it is in no way her intention to force us to tell somebody about their data when we are in the midst of an investigation into a possible fraud. I understand entirely the point which the noble Baroness made during her intervention.

However, I believe that the amendment would prove unnecessarily expensive. It would mean that we were writing to people to say that the investigation was fairly straightforward and that although an error was discovered, we know that there was no fraudulent intent. I am not entirely sure that it is a sensible use of our resources to insist that we send a notification to everyone who is investigated when inconsistent data is found after data matching. Where it is necessary to contact the individual concerned, we shall, of course, do that. In fact, many individuals may well be contacted because that will be the quickest and easiest way to check the data. However, most people will not hear anything from us, which will simply mean that their records are all square and that there are no problems other than perhaps a few minor spelling errors, about which we shall not bother them, but which we shall take into account when making corrections. I accept that the noble Baroness would not want to require us to inform people of that.

Although the numbers informed would be considerably lower than I thought initially, I still think that the amendment would add to the workload of the department. It could be costly to the taxpayer because it could mean that a fair number of people—it is difficult to say how many—would have to have a letter sent to them telling them that we have looked into their records because we had found a contradiction but that we are now satisfied that those are their proper records. I do not want to carry on if—

8.45 p.m.

Baroness Hollis of Heigham

I apologise to the Minister. This is my fault—either in terms of the drafting of the amendment or my introduction of it. That was not the import of the amendment. As the Minister is usually so much better than I am at explaining my amendments, it is unusual for there to be such a passing of ships in the night.

The intent is that where the relevant authority—the DSS or the local authority—believes that the information that it has collected is sufficient to justify a prosecution but where the prosecution has not yet been formally instigated, the person suspected should have the right to review the information for accuracy. It may well be the case that there was a culpable or even a non-culpable error which can be explained and the prosecution may not need to be proceeded with, in which case a lot of fuss, bother and effort will be obviated.

However, this is a matter of simple natural justice. It is almost like the defence having the right to see the prosecution's information. However, local authorities want that revelation of information to occur only when the investigation has been fully completed and at the point when the prosecution would otherwise be about to be mounted. This would ensure that the person being investigated is not tipped off early because the information is shown to him incrementally, thus perhaps voiding the attempt at prosecution. I wonder whether the Minister accepts that what we are trying to do is virtuous. I think that he probably does.

Perhaps it might be sensible for me now to withdraw the amendment and perhaps the Minister will invite me to come back at a later stage with another amendment or he may prefer to return with an amendment of his own. Perhaps the noble Earl, Lord Russell, would like to contribute and invite the Minister to comment—

Earl Russell

Does the Minister wish to reply to the noble Baroness before I make any comment?

Lord Mackay of Ardbrecknish

This may well answer the noble Earl's point also because I think that I now have a better understanding of what the amendment seeks to do. We are agreed that information can be withheld from a subject if giving the information would prejudice a fraud investigation. There is a limited exception under Section 28(1) of the Data Protection Act 1984 if the data subject's access is likely to prejudice the detection of crime if data is held for that purpose. In that case a case-by-case exemption is available where necessary. I believe that that applies also to local authorities. I believe that that is the reassurance for which the noble Baroness is seeking—

Baroness Hollis of Heigham

Perhaps I may ask the Minister what the position would be if the local authorities said that that was not the case, which is the point that is being made here?

Lord Mackay of Ardbrecknish

Perhaps I should read the discussion we have had and see whether by means of a letter I can provide the noble Baroness with some reassurance about local authorities.

To round it up, if the anomalies can be described as harmless and there is nothing particularly sinister about them they will be checked, investigated and corrected by the process that goes on after the data has been matched and given over to the human element, as it were. As I understand it, the noble Baroness does not suggest that we should inform everyone whose data has been found to be slightly out of kilter. Where an inconsistency is found and further investigation takes place the safeguard is that in many cases, although not all, contact will be made with the claimant to seek his or her help in resolving it. Let us go one step further and assume that the information means that an adjudication officer must immediately decide on a change of award of benefit. The claimant is required by law to be informed of that decision and the reasons for it. Certainly the claimant will know that this has happened and he or she will be informed. I believe that that meets the need for natural justice.

If it reaches the next stage of a prosecution (I nearly said "persecution", which I had better not say), the claimant who is to be prosecuted will know why—because he has given false information. I am not entirely sure who will be left over. But I undertake to look at this, especially with regard to the position of local authorities, and either write to the noble Baroness or wait until she comes back with an amendment at the next stage.

Baroness Hollis of Heigham

Perhaps the example that the Minister had in mind was the individual claimant who might be making an inaccurate or even fraudulent claim for, say, income support or JSA when he or she was currently in work. The situation that I have in mind is landlord fraud in which there is a direct payment of benefit to the landlord and he is abusing the system. It may be that he is taking Giro cheques that have been forwarded from the Post Office or he is claiming for tenants who no longer exist in his property. Perhaps over a number of weeks the local authority has mounted an elaborate investigation. It may have reason to believe that substantial fraud is taking place which perhaps runs into six figures annually.

Clearly, what is required is that before the local authority mounts a prosecution, if it believes it is justified, the person to be prosecuted—the landlord—should have the right to comment in case there is an honest explanation for the information in the possession of the local authority which has led that authority to believe that a fraudulent claim has been made. What I seek to ensure in that situation is that the person who may be prosecuted has the right to check that information but that as far as the local authority is concerned it is not required to do that until all of the information is gathered in so that the landlord cannot launder his books or information to abort the investigation. That is the purport of it.

The original amendment was rather along the lines of the amendment in the name of the noble Earl, Lord Russell; namely, that anyone who had changed information should have the right to inspect it to see whether it was accurate. The local authorities asked us to put in that subsection to provide that they should not be asked to do that until the investigation was complete; otherwise, it might undermine the work that they had been carrying out perhaps for several weeks in order to catch the fraudulent landlord. The purpose of the amendment is to balance the right of the person being investigated to know what is being said about him and the requirement not to tip off that individual too early in such a way that the genuinely fraudulent can escape the net.

The amendment is not about general information, national insurance numbers or anything like that; it is not even about the little person claimant. One is concerned here with much more serious organised fraud in which the local authority may invest a good deal of activity. It may slip away at the last moment to the expense of everyone. Obviously, that person has the right, which we must protect, to know the information on which the allegation is based so that he is aware of the information that the prosecution has, but only at a certain point.

At the moment local authorities do not believe that they have the requisite safeguards in place. If the Minister agrees that this is a virtuous cause, he will be in a much better position than I am to come back with an adequately drafted amendment. But I should like to know whether the Minister shares our concerns on this matter and whether we need to go down this path.

Lord Mackay of Ardbrecknish

I appreciate the point but I am still in some difficulty in understanding the scenario in which somebody who is engaged in pretty serious fraud is approached to check the data in such a way that he has time to unscramble it and escape the force of the law. It seems to me to be much more likely that if the local authorities are suspicious of somebody, and when the data is matched it is clear that there is something very suspicious, both the local authority and the department will know about it. The local authority will require information from us to help build up their case. At some stage it will interview the person. He will be asked, perhaps under caution, "What do you have to say about it?" Just thinking on my feet, surely it is at that point that if there is something profoundly defective in what we have found and we are chasing something that is not fraud the person will be able to say that because of such and such there is something very badly wrong with our information and give an answer. If that squares up with all of the evidence in the possession of the local authority and the information that we have, clearly the issue will be taken no further. I am not sure whether that helps the noble Baroness. However, I would have thought that that was a more likely scenario of an investigation into what the authorities initially believed to be a serious fraud but which turned out not to be. It might simply be a matter of inadequate data. I shall study this exchange and see whether I can help perhaps by putting something in writing to try to clarify the position.

Earl Russell

I do not want to be pushed into moving Amendment No. 17 which I had hoped not to do. The Minister gave a thought-provoking reply. Not all of the thought was necessarily to his advantage. I confess to being a little taken aback by his cavalier reference to casual spelling errors. Casual spelling errors in a name very often result in confusion of identity.

Both the Minister and the noble Baroness have correctly construed my Amendment No. 17 as having the purpose that the noble Lord and I originally perceived in the noble Baroness's own amendment. I am capable of being persuaded that the noble Baroness's more restricted way of going about it is the better way, but I have not yet been so persuaded and I should be grateful to hear an argument that might persuade me. The case for making it everybody is the good old principle that what is sauce for the goose is sauce for the gander. If one checks the accuracy of data for the benefit of the department equally one should check the accuracy of the data for the benefit of the claimant. That equality between the state and citizen is quite difficult to preserve for those on benefit, and it may be a matter of some importance.

The Minister says quite rightly that it will be extremely costly. Clearly, that point has force, and I hear it. Equally, to do what is proposed in the Bill will be extremely costly. The Minister makes out a public interest case for doing it, which I hear; but if the public interest case is valid in one respect, is it not perhaps equally valid in the other?

The Minister also makes the point that where the department finds something surprising, it will try to check it and put it right. I am sure that that is true, and I do not contest it for a moment. But where the information is inaccurate but yet on its face is entirely plausible, how is the department to know that there is an error which requires to be checked? I return to the case of my American bank. I regret to say that if it had informed all credit rating agencies that I was a bad risk that would not have been entirely implausible, if they knew nothing about me. There would be no reason for me to go off and check it because it seemed to be such an extraordinary piece of information. A great many things may be errors and no one will know it. We know from the rate of error in such matters as the administration of income support, on which I have heard the noble Baroness many times, that a lot of information in the possession of the DSS is erroneous. If by informing the claimant of this information one could put it right, would it not be rather a good thing?

9 p.m.

Lord Mackay of Ardbrecknish

I believe that the noble Earl does have on board the main point of my argument about everyone being informed. It was an argument about cost, and many letters being sent needlessly to people who may just think that it is another bureaucratic letter and wonder what they are playing at, and, "Why are they wasting money sending me all these letters?" I believe that the noble Earl understands that argument. Whether or not it holds water with him, is not for me to say. I hope that it holds at least a little water, because the cost of these schemes must be borne in mind.

On the noble Earl's second point, in trying to answer the noble Baroness I tried to explain that in most circumstances, unless an error can be tidied up without too much trouble internally, and it is clear that it is a mistake which is easily resolved, the likelihood is that someone in the local office will contact the individual saying, "We have these two pieces of information on you, which is correct?", and just checking it. Those people—not all—will largely be made aware of the fact that we have come across an inconsistency in their records when they are asked about them.

Then we go to the next step where we may be much more suspicious of the inconsistency. We then get into the answer that I tried to give to the noble Baroness. I understand the point. It is one of the problems about data of all kinds, but we cannot constantly and at all times know what data are being held on us. That would mean that the whole computer world in any organisation would just cease to function. I hope that the noble Earl is moderately satisfied with my joint explanation on Amendments Nos. 16 and 17.

Baroness Hollis of Heigham

Will the Minister tell us how many people currently ask for a print out from the DSS?

Lord Mackay of Ardbrecknish

It is funny that the noble Baroness should ask that question.

Baroness Hollis Heigham

Why did you not tell us if you knew already?

Lord Mackay of Ardbrecknish

I did not tell you previously, because of the caveat I am about to put in, and it did not seem to me to be particularly germane to the argument that was being put to me. Under the Data Protection Act 1984 about 20,000 people will have asked for copies of their records this year. The caveat is that the majority are seeking copies of their national insurance contribution records. I did not use the figure because it did not seem entirely relevant to the discussion about data that we were having. I do not think that we were considering part of that data as relating to national insurance contributions.

Baroness Hollis of Heigham

I am going to ask the Minister whether he will give an undertaking to consider whether he might want to bring an amendment back. We all recognise that there will be huge logistical problems if every time there was the most trivial amendment of data, such as alteration of a postcode or telephone number, because the code had changed from 0171 or whatever, that had to be done as a print out. That would clearly be a heavy burden. There may be practical ways around it. One could perhaps say that there would be an annual print out sent if, but only if, the information had changed since the previous print out. One might be able to bureaucratise it in that way. I wonder whether some path like that could be taken.

If information is being held by a central spine of IT which is then in the process of replicating, almost amoeba like, that information into a whole series of satellite daughter computer systems, it is crucially important that error be detected. On the whole basis of freedom of information and so forth, people should be in a position to correct those errors, because that is in everyone's interest. I do not believe that there is any dispute between us that those errors should not be multiplied, because the opportunity to correct them has gone by. It may be that an annual print out if, and only if, information appears to have changed, is the way to do so. I wonder whether the Minister will say that he is happy to think along those lines.

On the grounds, first, of natural justice; and, secondly, that it is in the mutual interest of government as well as taxpayer and claimant to ensure that the information held is accurate, the best person to check that accuracy is the person about whom that information is collected. If the Government would accept that we need some mechanism to ensure that that information is, so to speak, regularly spring cleaned visually by the claimant perhaps, as I say, on an annual basis, if, but only if, the information has changed since the previous time there was a print out, that may be one way of doing it.

The second issue is the point at which the local authority—I say it is the local authority here—must reveal it. The point at which it goes in for the heavy interview that the Minister gave as an example is, in my book at any rate, the point at which it is about to mount a prosecution. That is the point at which the person complained of is entitled to see the information held. With the amendment I was seeking, on the one hand, to ensure that people could spring clean information but that they could not spring clean it so early that they laundered themselves in the process as well as the information held on them.

We have spent some time on this amendment, but it has been useful. I wonder whether the Minister can say that he sympathises with our objective here, and might be persuaded to come back with an amendment of his own which allowed, not merely at the request of the claimant, some version of an automatic print out which was not logistically too expensive, cumbersome or bureaucratic, but which ensured that there was not a multiplication or duplication of error which might otherwise lead to abortive efforts elsewhere.

Lord Mackay of Ardbrecknish

After all the legislation I have done with the noble Baroness I should know better than to rise to that particular fly and try to go a bit further, but I will. Anyone who feels that they need to know their data has a right of access under the Data Protection Act. While that is a reasonable protection, I can understand why the noble Baroness is asking for another step. However, I believe that the other step would be bureaucratic and expensive. I shall look over the exchanges that we have had, and for reasons which will not have escaped her notice, I may choose to write to her on the subject.

Baroness Hollis of Heigham

I thank the Minister, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment 17 not moved.]

Clause 1 agreed to.

[Amendment No. 18 not moved.]

Lord Carter moved Amendment No. 19: After Clause 1, insert the following new clause—

SUPERVISION BY THE DATA PROTECTION REGISTRAR

(" .—(1) It shall be the duty of the Data Protection Registrar to monitor and keep under review compliance with the provisions of the Data Protection Act 1984 whenever personal data is to be—

  1. (a) supplied to any person by virtue of any provision in this Act; or
  2. (b) processed for use in the prevention, detection, investigation or prosecution of offences in relation to social security; or
  3. (c) processed for use in checking the accuracy of information relating to benefits, contributions or national insurance numbers or to any other matter relating to social security and, where appropriate, amending or supplementing such information.
(2) In pursuance of the duty under subsection (1) above, the Registrar shall have the power to require the provision of any information necessary to discharge this duty. (3) The Registrar shall prepare and publish in such manner as he considers appropriate guidelines in connection with the processing of personal data as set out in subsection (1) above. (4) The Registrar shall report on the performance of his duties under this section at the same time and in the same manner as he performs his duty to report annually under section 36(5) of the Data Protection Act 1984.").

The noble Lord said: With this amendment we return to the first debate of the day about the code of privacy, because in that debate the Minister made it clear that the Data Protection Registrar has an important role to play. He emphasised the reliance upon the registrar, and the crucial role that he will play. He told us that the Government will propose a non-statutory code of practice. which emphasises further the importance of the role of the registrar. I still believe that the Government will have to reflect on the point which was made in the earlier debate about the use of Section 38(2) of the Data Protection Act regarding the protection of the Government from prosecution.

Amendment No. 19 deals with supervision by the registrar. The amendment provides in subsection (1) that it is the duty of the Data Protection Registrar to monitor and keep under review compliance with the provisions of the 1984 Act. Subsection (2) gives power to require the provision of any information and subsection (3) gives the registrar the power to issue guidelines. Subsection (4) sets out a requirement to report in the same way that the registrar reports annually now under Section 36(5) of the Data Protection Act, which states: The Registrar shall annually lay before each House of Parliament a general report on the performance of its functions under this Act and may from time to time lay before each House of Parliament such other reports with respect to those functions as he thinks fit".

Therefore, the proposed new clause will empower the Data Protection Registrar to monitor the data-matching operations under the Act and to issue guidelines for compliance with the data protection principles of the 1984 Act.

Despite the assurances which the Minister gave earlier—and of course we believe him—there is no reference in the Bill to the need for compliance with the principles of the Data Protection Act 1984 nor to the rights of individuals under that Act. That is surprising when the Bill is to permit an unprecedented extension of the powers to data match personal information between government departments and local authorities.

It is noteworthy that the proposals for data-matching programmes in other countries, which generated wide public debate, resulted in specific privacy controls in the enabling legislation. That was referred to earlier. An important point is that in those countries legislation has always provided for active privacy supervision by either a privacy or data protection commissioner. In this country, the Data Protection Registrar has no general auditing powers. She may undertake an investigation only after a complaint. In Australia, the privacy commissioner is under a duty to monitor data-matching activities to ensure compliance with comprehensive guidelines. That duty is carried out by way of auditing inspections to assess both procedures being used and the outcomes of the data-matching operations.

The guidelines require the matching agency to maintain a technical standards report with reference to security features within the programme to minimise and audit access to personal information. At the same time, the agency must operate a programme of protocol to ensure the data quality, integrity and security of the conduct of the activities.

During 1995 and 1996, staff from the privacy commissioner's office inspected no fewer than 39 states and regional offices. In the annual report—and this is the point of the amendment—the commissioner must report on the number, extent and nature of data-matching programmes, the extent of public notification of programmes and consultation and information on the operational experience and effectiveness of programmes. Under specific legislation in New Zealand the privacy commissioner has similar powers.

We believe that data matching raises very particular privacy threats which cannot be covered adequately by present data protection legislation. Therefore, the need for specific powers of monitoring by the registrar and the power to issue guidelines has been shown to be necessary by the experience of other countries. Safeguards should be included in this legislation and not left to the vagaries of proposed but undrafted legislation to implement the EU directive.

There is a serious flaw in the present data protection laws in that the registrar has no independent monitoring powers, especially in the public sector. That was referred to earlier. The registrar is entitled to undertake investigation only after a complaint. In the letter from the registrar to Mr. Peter Lilley, which has been mentioned already on earlier amendments, she says: In my view public confidence in the efficacy of a statutory Code would be further strengthened by the introduction of a mechanism whereby compliance could be formally monitored. In this context you may think it appropriate to include an express obligation to allow the holder of my post access to such information as may be needed in order to monitor compliance effectively".

We referred earlier to the joint opinion from Mr. Richard Drabble, Q.C. and Dinah Rose. I am sure that the Minister knows that at the end of that opinion, the Q.C.s state their reasons for believing that there should be provisions in the Bill to improve it. Their third recommendation states that, some independent person or body should be appointed to supervise applications being made, in order to prevent abuse of the provisions". Also, in the 18th report of the Delegated Powers Scrutiny Committee of your Lordships' House, it quotes the department as saying: We recognise that this is a wide power and believe, therefore, that the affirmative resolution procedure is appropriate". The report then states: The Committee agrees with this assessment, and considers that a cautious approach is particularly important given the comparative novelty of data-matching and the fact that the subject of the data-matching will often not know that the process is being carried out".

It will be the registrar's role that that comparative novelty is monitored properly. Moreover, in the letter to Peter Lilley, which has also been mentioned before, Elizabeth France, the Data Protection Registrar, said: As the government has recognised in the Green Paper 'government direct' public confidence in the way their data is handled is a key requirement of government strategy on the use of information technology".

Indeed, that has already been quoted, but the letter goes on to say: In my view public confidence in the efficacy of a statutory Code would be further strengthened by the introduction of a mechanism whereby compliance could be formally monitored. In this context [it] may be appropriate to include an express obligation to allow the holder of my post access to such information as may be needed in order to monitor compliance effectively".

I referred earlier to the Australian experience. Their Privacy Act of 1988 states that the Privacy Commissioner, may, and, if requested to do so, shall make reports and recommendations to the Minister in relation to any matter that concerns the need for or the desirability of legislative or administrative action in the interest of the privacy of individuals".

The National Committee on Information and Technology and Civil Liberties in France studied the information on the subject compiled in America, Australia, New Zealand and in Canada in the province of Ontario, together with our own experience in the UK. It is interesting to note that the French, with a typically Gaelic flourish, do not refer to data matching: they refer to "interconnections", which seems to me to be much more romantic and vaguely risqué than the boring old words, data matching.

In this country the Data Protection Registrar and her predecessor have frequently drawn attention to the need for caution and regulation in the area. In his eighth annual report in 1992 the then DPR warned that data matching without sufficient safeguards carries with it the serious risk of breaching a number of the data protection principles, and considered that it was time to call for adequate safeguards for individuals.

More recently the DPR, in her evidence on data matching to the Home Affairs and Social Security Committee in 1995, emphasised that it is essential that adequate safeguards are put in place to protect individuals. It is noteworthy that other countries, especially Australia and Canada, when faced with the same debate have, after wide public consultation, laid down specific regulations to cover data matching procedures (particularly in the public sector) which have always included a provision for monitoring.

We believe that the serious flaw in the present data protection laws is the absence of any effective power of investigation and audit by the registrar. All those reasons, together with the lack of specific regulation for data matching in the UK Data Protection Act, strengthen the need for the registrar to be given statutory monitoring powers over the data matching exercise in the Bill. Perhaps the Minister could tell me why, when everyone else—namely, Australia, America, France, New Zealand and Canada—requires a procedure for monitoring, for inspection and for reporting, that is apparently not the case in the UK. I should be interested to hear the Minister's response. I believe that the Government have a case to answer. If they do intend to produce such voluntary guidelines, there must be some means for the registrar to intervene, to inspect and then to report. I beg to move.

9.15 p.m.

Earl Russell

I am happy to support the amendment because I believe that it would do a fair amount of good. Obviously I do not think—and I am sure that this is the case for the noble Lord, Lord Carter—that it would achieve everything that we desire. However, it would go a very long way towards meeting the charge that the DSS carries out its duties entirely to its own satisfaction. It would provide an independent monitoring; in other words, someone else would decide whether it is adequately done. It would mean the department would be protected against the danger of being entirely judge and party in its own court. That might possibly be in the department's interest, just as it is in everyone else's interest.

Further, the amendment would go a little way, although only a little way, towards meeting the point made earlier this afternoon by the noble Lord, Lord Carter, when speaking to the first amendment about the effect of Section 38 of the Data Protection Act. If the registrar is to intervene in monitoring or supervising the activities of government, she will need specific statutory authority. The Government must take that point on board because, as I understand it from the Minister's reply to the first amendment, they clearly intend that the registrar should be involved in the matter. Therefore, if the registrar is to do what the Government want and what we want—something which, in my view, she does not presently have sufficiently clear statutory authority to do—a provision like the amendment must be passed. The Minister will defeat his own argument if he does not accept the amendment, or, alternatively, suggest coming back with one worded rather more to his satisfaction which performs the same function. That point deserves serious attention.

Lord Mackay of Ardbrecknish

We have been over much of this ground when discussing earlier amendments and in our discussion on the first set of amendments regarding a statutory code of practice. I appreciate the concerns that have been expressed not only in this Chamber but also elsewhere about the need for appropriate safeguards, both statutory and administrative, to ensure that personal information about individuals is held and processed securely and that the provisions in the Data Protection Act are fully complied with. I have pointed out at various stages that the DSS has considerable experience in handling and storing sensitive personal data, and that there are extensive management and technical measures in place to ensure that only authorised people have access to our systems. The DSS, the Northern Ireland Department and authorities administering housing benefit and council tax benefit also have many years' experience in holding and processing sensitive personal data, and in doing so securely.

The Data Protection Registrar already has a duty under the Data Protection Act to promote the observance of the data protection principles by any data users, including government departments. As with other organisations, the registrar can issue an enforcement notice where she believes a government department has breached the data protection principles. I explained earlier in the Committee stage that she has never had a need to issue such a notice to a government department. Moreover, the registrar already has the ability to lay before Parliament, from time to time, reports about specific issues connected with data protection issues as she sees fit, in addition to the existing requirement to lay an annual report before Parliament on the performance of her functions under the Data Protection Act. She has commented in the past on matters relating to the use of personal data in social security administration, and I have no doubt she will do so again if she considers there are matters that ought to be brought to Parliament's attention.

We have recently concluded a consultation on the way to take forward the provisions of the EU Data Protection Directive. This must be implemented by October 1998 and your Lordships' House will have an opportunity to discuss the Government's proposals in due course. It is in the context of this general revision of the law relating to data protection that it may be more appropriate to look at the powers and duties of the registrar.

In addition, some of those who commented on the government.direct green paper considered that the Government's longer term electronic service delivery strategy would require the registrar's role to be widened. As the Government said in their response to the comments on the green paper, we are not convinced that that is necessary but we will certainly consider the arguments put forward.

I have already advanced my next argument and I have been warned by the noble Earl, if not by the noble Baroness, that they will not be greatly persuaded by it when they hear it. I am afraid that they will hear it. Perhaps when I say it, my powers of persuasion will be better than they think. It seems to us illogical and inconsistent to create a special set of duties for the registrar in relation to social security which do not apply to the use of the same techniques in other sectors. It does not seem sensible to try to put in place new responsibilities for the registrar so close to the time when there will be a wider reconsideration of her role. As I have said, that is necessary so that we can implement the EU Data Protection Directive by October 1998.

The data protection registrar's existing powers as a watchdog are adequate and appropriate for the purposes of this Bill. Her existing role, plus the code of practice—I have made it clear that she will be involved in the setting up of that code of practice—and other measures which I have announced, will ensure that there are adequate safeguards on the use of personal data supplied under the provisions of the Bill. I hope that with those points in mind the noble Lord, Lord Carter, and the noble Earl, Lord Russell, will feel able to withdraw their amendments. I add that, where the registrar has reasonable grounds to suspect that an offence under the Act has been, or is being, committed as regards any of the data protection principles, she has the power under Section 16 and Schedule 4 to the Data Protection Act to seek a warrant enabling her to investigate the matter further. So, if she thinks that there is something which should be investigated—perhaps people are not co-operating—she has the powers to seek a warrant in order to allow her to further the investigation.

My main point is that later this year or early next year we shall have to look at these issues across the whole field of the data world, data protection and data matching when we consider what we have to do as a Government to bring forward the EU data protection directive in time for its implementation in October 1998.

Earl Russell

The Minister expressed the fear that I might not be persuaded. I must confess that I am not yet persuaded. I would not wish to say that I am totally unpersuaded. He stated that in relation to his argument that we should not introduce a whole raft of safeguards about the use of data in social security which do not apply anywhere else. If he wishes to persuade me, he would need to answer the argument I put against that position. He may remember it, but perhaps I may refresh his memory.

His argument would have a great deal more force if we were not at one and the same time introducing a raft of extra powers to match data in social security which do not exist in any other field. I invoke the same principle that I have invoked before: that what is sauce for the goose is sauce for the gander. His argument would be entirely valid if the Government sought no more powers over data in social security than they do over anything else. But if they have extra powers, with those powers should go extra safeguards. That seems to me an entirely logical argument. If the Minister can convince me that it is not, I really shall be persuaded.

Lord Mackay of Ardbrecknish

I rather hoped that I had gone at least a little way to convince the noble Earl by explaining carefully on previous occasions that what we shall do after the Bill becomes an Act will be within the powers of and obeying the principles set out in the Data Protection Act.

I know that I did not go as far as the noble Earl wished. However, I should like to think that my setting out a code of practice which we would have in place before we started any of the data matching, and on which we would consult with the registrar, might help. I hope that some of the other points made in response underline that if the registrar has reasonable grounds to think that something is wrong she has powers to do something about it. Section 36 of the Act gives her statutory authority. Section 38 also expressly states that a government department is subject to the obligations of the Act except only in regard—I was about to say to persecution—to prosecution. The idea that the Government should be persecuted by anyone is alien, although sometimes as I stand at this Box I think that there is a little more persecution than prosecution!

I dealt earlier with the legal point about the Crown. I rather hoped that I would go at least some way to negate not only the noble Earl's fears on this, but also those of the noble Lord, Lord Carter, and the noble Baroness, Lady Hollis. It is not as though I am kicking the issue completely into the long grass because we shall look at all these matters across the whole field; and we have to do so to be in a position to implement the directive by October 1998. Part of that process, as indeed is the government.direct Green Paper, will be consideration of the issues of the registrar and whether she needs her powers widened.

Earl Russell

Perhaps I may reassure the Minister. I welcome the reassurances that he has offered me. They go a considerable way. At present my position is that those reassurances are like the good report: good, but not quite good enough. However, it is possible that the gap between us could be closed in future and I hope that it will be.

Lord Carter

We are all beginning to worry a little about the Minister. First, he cannot tell the difference between myself and my noble friend Lady Hollis—which is a mistake that anyone could make! Then he mixes up "persecution" and "prosecution". However, I have good news for him. After a certain date in May we plan to let him have a very long holiday.

The Minister referred specifically to monitoring and reporting. Incidentally, when I hear Ministers at the Dispatch Box responding to amendments, I so often feel that they have been injected with Section 1 of the Data Protection Act, which refers to: information recorded in a form in which it can be processed by equipment operating automatically in response to instructions given for that purpose". It seems that the Minister is entirely happy for the DSS to be, as it were, judge and jury in its own case. He makes the fair point that the registrar can promote observance; she can serve enforcement notices on departments. But the point is that at the end of the day she has no powers to enforce enforcement. The Minister then relies on the general revision of the law in line with the EU directive, etc.

He says that the Government always listen to the registrar. But they do not. They are in fact ignoring her. She wrote to Mr. Lilley and said: In my view public confidence in the efficacy of a statutory Code would he further strengthened by the introduction of a mechanism whereby compliance could he formally monitored. In this context you may think it appropriate to include an express obligation to allow the holder of my post access to such information as may be needed in order to monitor compliance effectively". The Government say that they listen. Yet when she gives them the direct advice that she should have this power, they ignore her and turn the proposal down.

The Minister says that these are special duties and that is why we have a special Bill to deal with them. The Minister began to sound rather like St. Augustine, as did the Government. Their belief is: "Data chastity, oh Lord—but not yet!".

There are extra powers in the Bill and these are extra safeguards. This is an important point and one about which we feel strongly. We do not believe that it can be left until 1998. We believe that the Government are not prepared to move on this matter. We have tried under the code of privacy. The Government say that they do not intend to have a statutory code despite all the arguments that were advanced. We have tried to protect the position with the role of the registrar. Again, the Government will not move. We are very disappointed, and I believe we are entitled to ask the opinion of the Committee.

9.32 p.m.

On Question, Whether the said amendment (No. 19) shall be agreed to?

Their Lordships divided: Contents, 25; Not-Contents, 65.

Division No. 3
CONTENTS
Addington, L. Monkswell, L.
Calverley, L. Morris of Castle Morris, L.
Carmichael of Kelvingrove, L. Parry, L.
Carter, L. Prys-Davies, L.
Desai, L. Ramsay of Cartvale, B.
Gould of Potternewton, B. Russell, E. [Teller.]
[Teller.] Sewel, L.
Hollis of Heigham, B. Thomson of Monifieth, L.
Hooson, L. Thurso, V.
Kilbracken, L. Turner of Camden, B.
Macaulay of Bragar, L. Whitty, L.
Mackie of Benshie, L. Williams of Mostyn, L.
Mar and Kellie, E. Winchilsea and Nottingham, E.
NOT-CONTENTS
Addison, V. Craig of Radley, L.
Aldington, L. Crathome, L.
Anelay of St. Johns, B. Crickhowell, L.
Ashboume, L. Dean of Harptree, L.
Attlee, E. Demon of Wakefield, B.
Balfour, E. Dixon-Smith, L.
Beaverbrook, L. Dundee, E.
Belstead, L. Eden of Winton, L.
Bemers, B. Elliott of Morpeth, L.
Blaker, L. Elton, L.
Blatch, B. Ferrers, E.
Brougham and Vaux, L. Geddes, L.
Byford, B. Gibson-Watt, L.
Cadman, L. Glenarthur, L.
Camock, L. Hacking, L.
Carr of Hadley, L. Hayhoe, L.
Chesham, L. [Teller.] Henley, L.
Courtown, E. HolmPatrick, L.
Kingsland, L. Peyton of Yeovil, L.
Lindsay, E Pym, L.
Long, V. Seccombe, B.
Lucas, L. Selsdon, L.
McColl of Dulwich, L. Shaw of Northstead, L.
McConnell, L. Skelmersdale, L.
Mackay of Ardbrecknish, L. Skidelsky, L
Mackay of Drumadoon, L. Strathclyde, L. [Teller]
Marlesford, L. Taylor of Warwick, L.
Miller of Hendon, B. Trumpington, B.
Whitelaw, V.
Northesk, E. Wise, L.
Park of Monmouth, B. Wynford, L.
Parkinson, L. Young, B.
Perry of Southwark, B. Younger of Prestwick, L.

Resolved in the negative, and amendment disagreed to accordingly.

9.40 p.m.

Lord Carter moved Amendment No. 20: After Clause 1, insert the following new clause—

RIGHT TO MAKE REPRESENTATIONS

(" .—(1) No action in relation to the entitlement to benefit of a person shall be taken solely on the basis of the exchange and checking of information under the provisions of this Act until the person has been notified in writing of the following matters—

  1. (a) the nature of the proposed action intended to be taken in relation to the benefit or benefits; and
  2. (b) the grounds on which the proposed action has been determined, including particulars of information relating to the person which have arisen as a result of the exchange and checking of information under the provisions of this Act.
(2) The person so notified under subsection (1) above shall be given 28 days, after receipt of the notice, to make written or oral representations as to why the proposed action in relation to the entitlement to benefit should not be taken.").

The noble Lord said: I shall deal with this amendment extremely briefly. We have covered the ground already about the entitlement of people to know the nature of any action which is to be taken in relation to benefits, and the grounds on which the proposed action is to be determined, as well as the right for the person so notified under subsection (1) to be given time to make written or oral representations.

I do not propose to go through my whole brief. This is an opportunity for the Minister to tell us exactly how the provisions will work in the circumstances and what steps it is proposed to take to make sure that the individual has the right to make representations and is protected from the use of inaccurate information. I beg to move.

Lord Mackay of Ardbrecknish

I hope that I shall be able to satisfy the noble Lord that he is under a misapprehension about how the data-matching operation will take place. In fact, I referred to the matter earlier but this amendment gives me an opportunity to lay it out in what I hope is fairly brief detail. When I discussed the code of practice, I made clear that the benefit will not be stopped automatically if the computer detects an inconsistency in a data-matching exercise. Where an inconsistency is discovered which might indicate that an existing benefit award is incorrect, the case will be referred to the benefit office responsible for further investigation. In the vast majority of cases where the rate of benefit is involved, the claimant will be asked to explain the inconsistency before any action is taken. But that may be impractical where, for instance, the data suggests that the claimant has moved abroad or that the whole identity is fictitious. If the claimant fails to respond to a letter to his last known address within a reasonable time then powers exist in regulations made under Section 5 of the Social Security Administration Act to suspend payment of benefit.

Adjudication officers make decisions about an individual's entitlement to benefit by applying the law to the facts of each case. Local authority officers do the same in relation to housing benefit and council tax benefit. Where information is received under the provisions of the Bill, whether it is through a data-matching exercise or some other form of disclosure, that information will be checked for accuracy before any decision is made on an individual's entitlement to benefit in the normal way.

So, there is no question of benefit being arbitrarily stopped following a data-matching exercise or disclosure. All the normal checks will be made before the case is referred to the adjudication officer or the local authority considers whether to review a determination that has already been made.

I hope that that answer reassures the noble Lord, Lord Carter, and that he feels able to withdraw his amendment.

Lord Carter

I am extremely grateful to the Minister. That is the information that we wanted on the record. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 2 [Other government information]:

Earl Russell moved Amendment No. 21: Page 5. line 9, leave out from ("prisoners") to end of line 10.

The noble Earl said: This is the over-prescribing amendment. The Minister knows my views on over-prescribing. The section that I seek to delete is in Clause 2 and concerns information which may be required from any other government department which relates to: passports, immigration and emigration. nationality or prisoners; or … any other matter which is prescribed". It is rather sweeping is it not? It means that if there is anything that the Minister has not thought of, he can shove it in by regulation and we may not be able to do much about it.

The Minister has explained many times why he is in favour of doing things by regulation. I shall not make him go through all those arguments again. But the proper reply is that it is only a valid case if this House has an effective practical power by the use of the vote to control what is done by regulation. As the noble Lord, Lord McCarthy, explained to me as recently as last Thursday, we are still not united on that.

If there is no clear recognition that we vote on regulations, there must be a restriction on what can be done by them. We can have it one way or the other, but not both, if we are still sticking to what is increasingly in danger of becoming a fiction; that is, the proposition that Parliament makes the law. I would regret that proposition becoming a fiction.

I do not know what may be done under the new power. For example, I do not know whether it is restricted by the Bill passed on the initiative of my honourable friend Mr. Kirkwood in 1989 on access to medical records. Indeed, I do not know whether medical records count as being held by a government department within the meaning of the clause. It is an interesting point and I should like it clarified before we decide what to do about it.

There are certain records, even within the Department of Social Security, which I am a little reluctant to see supplied freely between departments. For example, there is a conspicuous amount of error in the records of the CSA. In that context—if I may be forgiven for doing it—I should like to congratulate Mrs. Faith Boardman on her appointment to headship of the CSA. I look forward to as co-operative a relationship as possible across the net and wish well to Miss Ann Chant, with whom I have been happy to enjoy that sort of relationship.

The point remains that there are still errors. There are a great many other records, into which I shall not now go, which I would be unhappy to see batted freely to and fro by no other authority than a regulation which we have only limited power to check. I beg to move.

9.45 p.m.

Baroness Gould of Potternewton

Amendment No. 21 concerns a point of principle; that is, the relationship between Parliament and the Executive. It also concerns the circumstances under which Ministers seek unconditional powers of access to government records held in other departments.

Under paragraph (a) of the clause, DSS Ministers are obtaining through primary legislation access to government department records as specified: immigration and emigration, nationality or prisoners". As currently worded, any other matter which is prescribed", the provision permits DSS Ministers to have access to information they require from police computers, national security files, ID card systems or health records. It will enable Ministers to seek unconditional powers of access to records held in other government departments.

As I understand it, that may be exacerbated by Section 190 of the Social Security Administration Act which will apply to these orders and which means that access to that kind of information will be automatic unless Parliament annuls them. As the noble Earl, Lord Russell, said, all that is being conducted under regulation. We all know, parliamentary procedures being such, that governments usually get their own way on secondary legislation and opportunities for debate and discussion are limited.

I appreciate that paragraphs 11 and 13 of the schedule make such a regulation subject to affirmative resolution of both Houses and that the Delegated Powers Scrutiny Committee accepted the Government's approach. But, as the Minister said earlier, it calls for caution. Nevertheless, the provisions are too imprecise, too widely drawn and doubts still remain. There are genuine fears that such wide-ranging powers can be misused; that they will take in data that are excessive and not necessarily relevant to the specific purpose—in this instance, of combating fraud.

For instance, in Committee in the other place on 5th December the Minister excluded the possibility of access to health records for benefit purposes. Why do the Government want widely to cast executive powers which may be used to gain access to health records? Are those wide powers in case a future fraud should arise or to cover future information sources? If so, those are insufficient reasons to grant them.

Does not the Minister share our concern that, with the prospect of the contractualisation of the Benefits Agency medical service, there is a special need to ensure the confidentiality of such information? How will it be prevented from going to private firms which might have a rather wide interest in the exploitation of such information?

Under the clause as written, can the Minister give a guarantee that health records will be kept securely and will be used only for a verified purpose? What protections will be put in place to prevent a private company exploiting information for a private purpose? Assurances are needed because, as I have said, there are genuine fears that such wide-ranging powers could be misused.

The Earl of Balfour

I wish to raise one or two points before my noble friend replies. I am not familiar with the fine details of the Bill but I have a feeling that one of the reasons for the word "prisoners" being added to the list is that if someone is in prison he is exempt from the council tax. However, in respect of, any other matter which is prescribed", I wonder whether we need to include those who go into hospital. I say that because I am now over 70 and am on a state pension. I know that if I go into hospital my state pension is likely to be cut. I wonder whether the hospital point in that respect should not be written into the Bill. I fully understand the point put forward by the noble Earl, Lord Russell, for leaving out some words but I should like to suggest that we need to have these things specified. Whatever goes into the Bill should be prescribed on the face of the Bill.

Lord Mackay of Ardbrecknish

Paragraph (b) of subsection (2) allows the extension of the provisions of the Bill to other types of information held by a Minister of the Crown or a government department to be supplied for the same purpose and paragraph 11 of Schedule 1 makes any regulations under this provision subject to an affirmative resolution of both Houses.

The general principle underlying Clauses 1 and 2 of the Bill is that it is in the public interest to make specified relevant information held elsewhere in central government available to the DSS and the Northern Ireland department for the social security purposes set out in Section 122B(2) and parallel provisions. We have no immediate plans to make such regulations but we believe it is appropriate to have the ability to add other types of government information in the future. It is likely that in the future there will be changes in the types of information available or in the type of fraud committed. We recognise that the more we identify and close down existing opportunities for fraud, the greater the test of the ingenuity of professional fraudsters in finding ways of attacking the system. This regulation-making power is needed to provide the flexibility to take account of future developments. It is not good enough to be one step behind the fraudster. We need to keep pace with changes to ensure that we stay one step ahead.

As the noble Baroness, Lady Gould, pointed out, the Delegated Powers Scrutiny Committee reported on this provision. It did not reject the concept of extending the range of information which might be made available by regulation. It agreed with the Government that, in view of the wide powers potentially conferred by the regulation-making power, any such regulation should be by the affirmative resolution procedure. I would have been disappointed if the noble Earl had not raised this matter, as he has raised the matter on every other Bill in which I have taken part. His argument is the same. My answer is, I am afraid, also the same. In this case it is an affirmative resolution.

In addition, if we were intending to introduce any new provision, we would have to consult, thanks to the consultation required in the Social Security Administration Act, before the regulations were laid and then we would have the affirmative procedure. That seems to be the appropriate way to proceed. The only alternative would be for new primary legislation. We do not think that would be appropriate where no matter of new principle is involved. Any new information source, if I may call it that, would have all the restrictions of the Bill applied to it. It would have all the qualifications that are on the listed sources of information applied to it.

I say to the noble Baroness, Lady Gould, that I answered earlier this evening about the position of contractors. In fact Section 123 of the Social Security Administration Act makes it an offence for a DSS employee and its contractors to disclose information unlawfully. So contractors could pot possibly play fast and loose with data that they had in order to fulfil a contract with us. For a start they would be breaching our contract and we would take a very severe view of that. Secondly, they would also be acting unlawfully and would be subject to the same penalties in law as any DSS employee.

I turn now to health records. I quash the idea that we might use that power to gain access to health records. I can reassure the Committee that that is not our intention. In any event, personal medical records are held by the area health authorities and not by the Secretary of State for Health. So the power to add other types of information could not be used to make it lawful to disclose medical records. I hope that that assurance helps the noble Earl.

As regards the CSA, information can be obtained under these powers in the Bill only for the purposes of social security. So information could not be obtained for the CSA under these powers. There are limited provisions in the Child Support Act for child support information to be used for social security purposes, but they are limited. I can assure the noble Earl that we have no intention of exercising the power in this section in relation to information held by the CSA. Such information would in any event be available only for specified purposes in the Bill relating to the prevention of social security fraud, etc. Therefore, I do not believe that what I suspect are the noble Earl's fears are justified.

With those two assurances about health records and the CSA and with the further assurance that we are determined that these measures will be decided by the affirmative order and that there will be consultation before the regulations are laid, I hope the noble Earl can feel satisfied that he has raised what I entirely accept are important issues of secondary legislation. He has brought to our attention once again the need for Parliament to be eternally vigilant against government.

Earl Russell

I thank the Minister for that reply and I thank the noble Baroness, Lady Gould of Potternewton, and the noble Earl, Lord Balfour, for their contributions. The point made by the noble Earl about hospitals is well taken by me at least. I hope that it may also be taken by the Minister. It underlines the fact that my basic concern is not over the use of the power to prescribe information, but over delegating our power to consent to it being done. That is very properly named "delegated legislation" because, in effect, by passing a clause such as this one gives the Minister a power of attorney to act on one's behalf, not quite without further authorisation, but without further effective opportunity for control.

I take the point that what the Delegated Powers and Deregulation Committee has said is that the affirmative procedure is sufficient for scrutiny, but scrutiny and control are two different things. Our concern here is with control. If we were to have an agreement on all sides that it was perfectly possible to vote on these things, then I might be able to look in a rather more relaxed way on the conferring of the powers. But, as it is, I cannot but be unhappy at signing over to a Minister powers which we cannot check. I entirely accept what the Minister said about it not being their intention. I am also extremely grateful to the Minister for what he said about medical records. I thought that that was probably the case, but I am glad to know that it is. I am sure that the Minister's intentions here are nothing but honourable and nothing to which I need to take any exception, but, when we put something on the statute book, it remains there for an average of about 20 years, I imagine, and during that time quite a lot of Secretaries of Sate may come and go—

10 p.m.

Lord Carter

One a year in most departments.

Earl Russell

The noble Lord, Lord Carter, suggests that the figure may be one a year in most departments. I do not know whether he is talking about the past or the future, but whichever it is we must be careful of conferring power. In order to save time in the few future exchanges that the Minister and I may have on the subject, I should say that I am not concerned about the intention—there is no problem there—but I am concerned about values. I am concerned about conferring a power. When I see a power being conferred, I look at what might be done under that power—not necessarily by the present Government, the next Government or the next but one—but at what the power would lawfully extend to doing. That is a proper approach for a Parliament. We shall return to this subject in many future debates and I hope that occasionally in another Parliament the Minister and I may be on the same side. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 22 to 30 not moved.]

Clause 2 agreed to.

Clause 3 [Authorities administering housing benefit or council tax benefit]:

Lord Carter moved Amendment No. 31: Page 7, leave out lines 16 and 17 and insert— ("() a person, body or authority authorised to exercise any function of such an authority relating to such a benefit where there is reason to suppose that fraud may have occurred,").

The noble Lord said: In moving Amendment No. 31, I should like to speak also to Amendment No. 40 and can again be brief. These amendments seek to have the Government ensure on the record that information may be supplied to any authority or body acting on behalf of another authority. They seek to clarify that bodies such as the London Organised Fraud Investigation Team, which rejoices in the acronym LOFIT, and the London Team Against Fraud (LTAF), which co-ordinates London-wide action against fraud, will be able to receive information directly from government departments and other local authorities.

The background is that in the early 1990s several London boroughs were reporting a growth in fraudulent applications for benefits and awards. There was evidence of organised fraud; for example, applications from demolished and empty properties and multiple applications from one-bedroomed flats. We have made it clear from these Benches that we are as opposed to fraud, whether by landlords or claimants, as the Government.

The Audit Commission also noted the rise in reported fraud. In December 1993 it published a report on the extent of fraud and corruption suffered by local government, entitled Protecting the Public Purse, which set out a guide to good practice in the prevention and detection of fraud and corruption and made a number of recommendations for local government, central government and the police. It now seems that the 1996 Fraud Initiative has been extended to cover England and Wales and that some 250 local authorities will take part.

For all those reasons—the extension of the Fraud Initiative, the large number of local authorities taking part, and the success of the London Fraud Initiative, which I understand in 1994 and 1995 helped the London boroughs to stop £350 million-worth of fraudulent benefit and award claims—we think that it is important to have an assurance from the Government that information can be supplied to any authority or body acting on behalf of another authority. I beg to move.

The Earl of Balfour

I am puzzled by this amendment because its final words are, there is reason to suppose that fraud may have occurred". However, a reading of the Bill suggests that the person may be authorised to carry out "any function". I feel that the words in the Bill are much wider—and deserve to be wider. With great respect to the noble Lord, Lord Carter, I feel that he is making a very restrictive addition to the Bill.

Lord Carter

I believe that there is some misunderstanding here. The intention of the amendment is to ensure that information can be supplied to any authority or body acting on behalf of another authority. The Bill refers to: an authority administering housing benefit or council tax … or … a person authorised to exercise any function of such an authority relating to such a benefit". The intention of the amendment is to widen rather than narrow the scope of that provision.

Lord Mackay of Ardbrecknish

I say to my noble friend Lord Balfour that I do not believe that the noble Lord, Lord Carter, is particularly concerned about what his amendment does. He is more interested in probing how the system will work in practice. I will treat the amendment very much on that basis.

New Section 122 of the Social Security Administration Act which will be inserted by Clause 3 allows the Secretary of State to supply both local authorities and their contractors with social security information for use in housing benefit and council tax benefit administration. I believe that the proposed amendment, which I take as a probing amendment, will prevent the supply of such information to an authority's contractor unless there is reason to suppose that a fraud has occurred. I do not believe that there is any advantage in that.

If there is an underlying concern about contractors, I believe that it is misplaced. As I have said on a number of occasions—quite recently to the noble Baroness, Lady Gould—the contractors are bound by commercial as well as legal obligations to use the information that they receive properly and to safeguard it, but the new section is intended in part to lay legal foundations for computer systems involving data exchange which can help local authorities and their contractors to improve the efficiency with which they administer housing benefit and council tax benefit.

I am sure that the Committee appreciates that social security information supplied by the Secretary of State can assist not only the investigation of fraud but its prevention. Such information can also be of use in preventing and detecting error whether on the part of the claimant or the authority. I believe that we are all agreed that that is an important aspect of the Bill. If one went down the road of the amendment, fraud and error might be allowed to enter the system. I do not believe that any of us wants that.

Perhaps I may turn immediately to new Section 122E of the Social Security Administration Act which is inserted by Clause 3. That allows either an authority or its contractors to supply benefit administration information to another authority or its contractors, for use in the prevention, detection, investigation or prosecution of offences relating to housing benefit or council tax benefit; or for use in checking … amending or supplementing … information", relating to such benefits. I do not believe that any of us wants to prevent that from happening. Indeed, under the present terms of the Bill that will happen.

I confirm that the powers in the Bill are adequate to supply information to LOFIT for the purposes stated. As I understand the amendment, it is not needed to ensure that LOFIT and any like teams in the future will have adequate powers to receive the information and act upon it. With that assurance, I hope that the noble Lord, Lord Carter, will feel able to withdraw his amendment.

Lord Carter

The Minister has supplied the assurance that we wanted to have on the record. However, am I correct in believing that when he refers to contractors he is not referring to organisations like LOFIT? I see some nodding and shaking of heads.

Lord Mackay of Ardbrecknish

I believe that I am right in saying that LOFIT is not a contractor as I understand the term.

Lord Carter

This discussion reminds me of a trip to Bulgaria in which I learned that when people nodded they meant no and when they shook their heads they meant yes. It is confusing. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 32 to 34 not moved.]

Baroness Gould of Potternewton moved Amendment No. 35: Page 7, line 30, at end insert (" or () for related purposes".).

The noble Baroness said: This is a probing amendment. I shall therefore be brief. Its intention is to question why the Bill's scope is confined to social security fraud. The powers it contains will only help authorities tackle housing benefit and council tax benefit fraud. That means that it will not allow local authorities to tackle other types of fraud, such as education award fraud and contractor fraud. It also raises the question as to why the Bill is so narrowly drawn. Does it mean that the existing exchange of information between government departments and local authorities will be curtailed?

The Bill's long title confines its scope to "social security offences" and the "administration of social security". By contrast, the provisions in the Private Bill promoted by the London boroughs (the London Local Authorities Bill) are drawn much more widely. It will give powers to tackle all sorts of fraud, including fraud involving education awards, nursery vouchers and contractor frauds. It is hard to see the justification for restricting the scope of the Government's Bill in that way.

There is concern among local authorities that when the Government's Bill reaches Royal Assent, because it imposes strict limitations upon the uses to which government information supplied to local authorities can be put—that is, it confines it to social security fraud—it will hamper initiatives to tackle other types of fraud.

One possible dilemma would arise when a local authority receives information from the DSS, or another local authority, which leads it strongly to suspect that in addition to benefit fraud an individual was also committing fraud in relation to education awards and nursery vouchers. The question is: could it use that information to justify an investigation into those other areas?

Having received evidence of possible fraud, the local authority would be under a duty to investigate, but would that conflict with the Bill's limitations on using information for purposes other than offences and matters relating to social security? The Minister might argue that allowing information to be used "for related purposes" would breach data protection principles, but while the need for safeguards in the Bill on the use of data are understood, potential difficulties arise because the Bill is confined to social security fraud. The worry is that that restriction in the Bill's scope will hamper local authorities' ability to deal with other types of fraud. Reassurance from the Minister that that is not the case would be welcome. I beg to move.

Lord Mackay of Ardbrecknish

I am not sure that the noble Baroness is not going a great deal wider than the Bill itself goes. I think I understand what her amendment does, but it does nothing like what she thinks it is doing, because by adding the words "for related purposes", it must be "related purposes" to social security. As I understand these matters, that can encompass only housing benefit and council tax benefit. The way the Bill stands, it cannot encompass the other issues such as education grants, housing grants, or the like. It cannot be extended to non-social security areas.

Having spent a fair portion of the evening being accused of taking these Draconian powers to data match, I now spend another part of the evening trying to say that we should not cast the net ever wider. I am not entirely sure where I am left with this particular argument.

I understand the point that the noble Baroness makes. It comes back to the London Bill whose sponsors are not just looking at benefit fraud, because Part II of that Bill does not deal only with fraud against social security benefit, it impacts upon the payment of education grants, and other parts of the Bill go a good deal wider than that. It deals only with London of course and not with the whole country.

This Bill concentrates specifically upon social security fraud and administration. Therefore, as that is the clear focus of the Bill, it cannot be extended, even with the elegant phrase "related purposes", to the purposes which the noble Baroness intends. It could be extended only to social security purposes. As I do not think there are any purposes other than housing benefit and council tax benefit, in the context of the Bill, the amendment is fairly meaningless. But I understand the meaning which the noble Baroness wished to convey in order to introduce the debate.

I have some sympathy for her, but I think sufficient is the data matching that we have this evening for the suspicious in your Lordships' House who think that the Government are going too far and so on and are suspicious of data matching. We should see how this works. I can see that we may reach a stage in the future where these provisions may go wider. But once they begin to go wider and the purpose becomes less specific—and this Bill is very specifically for social security purposes—we introduce a longer and, perhaps, louder debate about intrusion into personal privacy and so on.

Therefore, I understand what the noble Baroness is seeking to do, but I hope that she will understand that her intentions are not carried forward by use of the phrase "related purposes". I hope that she will appreciate why I think we should be wise to remain within the tight definition of the Bill relating to social security purposes. Quite enough fraud will be discovered in this field to keep many officials busy for quite a long time.

10.15 p.m.

Earl Russell

Perhaps I may express a few words of sympathy for both the Minister and the noble Baroness. We have here a situation which, on Second Reading, I pointed out would arise throughout the Bill. As soon as any of us tries to prove that we are tougher than the others on fraud, we immediately lay ourselves open to the accusation of being weak on civil liberties. As soon as we push on civil liberties, we lay ourselves open to the accusation of being weak on fraud. That is why I suggested on Second Reading that we should try to conduct proceedings on the Bill without any attempt to pursue party advantage because the Bill needs to be probed from both directions. We can do our duty in that way only if we all try to avoid making party charges against each other. I am not reproving the Minister. I am merely explaining the difficulty which the Minister is experiencing. In fact, I am expressing sympathy with the Minister and the noble Baroness.

These debates must take place and if they appear to be contradictory, it is merely because we need to probe the Bill from both directions. It is a very necessary part of scrutiny of the Bill and I am glad that the noble Baroness tabled the amendment.

Baroness Gould of Potternewton

I thank the noble Earl for that and I thank the Minister for his reply. I understand the point which the Minister makes and as I say, this is a probing amendment. However, I am sorry that the Minister has not responded to the worry of local authorities that the restriction in the scope of the Bill will hamper them in their ability to deal with other types of fraud. They need to be reassured about that. I hope that on some other occasion, the Minister may be able to do that. Having said that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Hollis of Heigham moved Amendment No. 36: Page 7, leave out lines 33 and 34.

The noble Baroness said: We have ungrouped Amendments Nos. 37 and 39 from this group because Amendments Nos. 37 and 39 deal with fees, which is a separate issue from conditions. This is a probing amendment to find out what the Minister has in mind when he talks about a power to impose conditions on the use of information supplied to local authorities and to find out how he expects that power will be used. There are no similar powers for local authorities to impose such conditions when they supply information to the Secretary of State. We should like to know how the Minister justifies that difference in approach.

It may be that that power will be used solely to ensure that information obtained from the DSS will not be used for purposes other than council tax and housing benefit fraud. If that is the case, it would be useful to have that confirmed by the Minister. However, as local authorities will be bound by the principles of the Data Protection Act in any event, they will not be able to use the information for any purpose for which they are not registered. Therefore, it is unclear why that power is needed.

We should welcome an assurance that the power will not be used to restrict the discretion of local authorities to pursue investigations as they wish. In other words, it is important that local authorities should be allowed to decide their own priorities in the light of their experience and knowledge of local circumstances and that the DSS does not use that power to impose centrally-determined priorities.

Let us take one example in that respect. A local authority may be concerned to eradicate landlord fraud at a time when the DSS is concentrating on individual claimants and the two situations may be at odds. As I said, it is a probing amendment: we wish to know what conditions the Minister may have in mind under this provision. I look forward to hearing his reply. I beg to move.

Earl Russell

I, too, should like to know what the Government have in mind. I can imagine them having measures in mind which might go a long way towards meeting some of my misgivings. However, I can also imagine them having measures in mind which might create many further misgivings. In addition to knowing what sort of specific conditions the Government are thinking of imposing, I should also like to know the technical means by which they imagine such conditions can be imposed. For example, do they imagine them being imposed by regulation, by guidance or on the basis of contract? Indeed, what sort of binding force will the conditions have when they are put in place?

One cannot really judge the effect of such conditions until one knows the extent of the authority behind them. Clearly a statutory power might envisage something which created a semi-statutory authority. However, as this is not specifically a regulation-making power, I am not quite sure by what other means that might be done. If the conditions do not have a semi-statutory force behind them, what sort of force do they have?

Lord Mackay of Ardbrecknish

Perhaps I may take the amendment as a probing one and explain what was intended by the powers under this section. Under new Section 122C of the Social Security Administration Act 1992, introduced by Clause 3, information that may be supplied to authorities is necessarily extensive. It could include not only social security information from the DSS or the Northern Ireland department, but also information that has come from the Inland Revenue, Customs and Excise or indeed other government departments.

Subsection (2) requires that any information supplied may only be used in the administration of housing benefit or council tax benefit—and that takes me back to a point just discussed with the noble Baroness, Lady Gould—and subsection (3) further requires that any information supplied by the Secretary of State, which has been supplied to him from tax authorities or other government departments, may only be used for the prevention and detection of fraud and the checking of the "accuracy of information" relating to those benefits.

We envisage the use of the power in two main ways. First, the sensitivity of certain data may require additional conditions as to its disclosure and use. For instance, it might be necessary to require that certain specific and sensitive information that had been passed to the department by the Inland Revenue would be passed to an authority subject to the condition that it was only seen by a specific, named local authority official—for example, a fraud manager and a senior investigator. Another example would be where sensitive social security information—for instance, about a VIP or a potential target of terrorists—would be available only to a nominated senior officer. A further example is where certain social security information might be supplied on condition that it was only used by fraud staff for fraud detection purposes.

A second type of condition arises out of the opportunities that we are exploring for local authorities to take advantage of the department's new corporate computer system. A study is under way which could lead to local authorities having access to departmental databases. On-line electronic links to DSS systems could greatly enhance authorities' ability to administer housing benefit and council tax benefit efficiently and to tackle fraud and abuse. Responsibility for handling the data properly does of course remain with the individual local authority concerned. But this provision in the Bill would enable the Secretary of State to ensure that certain minimum mandatory security procedures were complied with by all users as a condition of authorisation to use the system and to access the information in it. For instance, a basic condition on the use of computer-based information within an authority would be that access to it was dependent upon adequate physical and managerial security arrangements. The provision in new Section 122C(4)(a) would enable the Secretary of State to impose such a condition. While the department would not necessarily want to impose a uniform security procedure on all local authority housing benefit computer systems, it would want to make a condition of the supply of information that all local authorities which were to hold such information met a minimum standard of management and technical security. This would be set by reference to the security standards which the DSS applies to its own systems. The provisions in new Section 122C(4)(a) are necessary in order to ensure that, where appropriate, additional conditions can be imposed in order to protect the confidentiality of data.

I hope that that explanation shows the kind of areas which we might be exploring currently as regards the security of an individual and in the future when we discuss with local authorities how they might get better access to our centralised database to allow them to do their work more efficiently and effectively.

Earl Russell

I thank the Minister for that reply which was considerably reassuring. These are, I think, all types of condition which I would be perfectly happy to see imposed. Does the Minister envisage using this power to restrict the disclosure and spread of information relating to women who have been victims of domestic violence? I have a vague recollection of his colleague Mr. Heald saying something to this effect in another place. However, as that is somewhere in the mass of paper at my side, I am not sure that I can find it.

I wish, if I may, to approach this from a quite different point of view. I return to the point I made a moment ago about being concerned with vires as well as with intention. I am perfectly happy with all the intentions the Minister has expressed. However, let us assume these powers are in the hands of a government of a quite different disposition. The last thing I want is to offend any present company, so let us imagine a government formed either by the Referendum Party or by the Socialist Labour Party, or indeed by the Green Party. If the Green Party were to make it a condition that any information—

Lord Carter

Under the proportional representation proposal which I believe the noble Earl's party supports, is there not a chance of a coalition between the three parties he has just mentioned?

Earl Russell

When we deal with general election results nothing is impossible. That was precisely the point of the argument I was making. If a "green" government should attempt to make it a condition that none of the information so disclosed should be conveyed by motor vehicle, would that be intra vires or ultra vires? What is the limit of what can be done under these powers? It is a question we should always ask when we are conferring powers. I ask it for legal completion and not with any distrust of the Minister whatsoever.

Baroness Hollis of Heigham

Before the Minister responds to that point, and as a supplementary to it, I, like the noble Earl, Lord Russell, was persuaded by the instances the Minister gave. But given that there may be other circumstances in which we would not be so sympathetically disposed which as yet remain unknown—and given that we do not have the protection of the regulatory power and therefore the option of parliamentary scrutiny because obviously in some of the circumstances the Minister indicated that would be inappropriate—would it be appropriate to ask the Minister to consider whether he could give some undertaking that such conditions would be imposed only after consultation with the local authorities?

Lord Mackay of Ardbrecknish

As regards the second type of case, I said that we were exploring with local authorities the possibility of their taking advantage of that. As regards the first type of case which concerns individual cases, I am not sure how far one can define the word "discuss". If we were saying to a local authority that a particular piece of information about a particular person must be seen only by a specific named official, I am not sure whether that is a case of our discussing that or not. I think it probably is not according to the definition of the noble Baroness. I cannot promise that we would be prepared to discuss these situations with local authorities if that implies that we might not proceed with other directions. In the kind of circumstances that I envisage, we would have concluded that it was essential to do so. It should be underlined that it does not stop the local authorities using the data. It puts tight limitations on who should use the data.

The noble Earl went into the realms almost of fantasy. I suspect that the kind of alliance to which he referred would ban the use of computers in any case, so the question would never arise. I am not in a position to say what checks and balances there are. I know that the noble Earl never means to apply his comments to ourselves, the party opposite, or even, I presume, his own party in the unlikely event that he described. But looking back over my lifetime, I have a reasonable faith that while governments have done things that I have thought were pretty daft, I do not think that they have gone way beyond the score in using the powers that they had in legislation. I have a naive hope that that will continue. I suspect that if a government wished to do the kind of things that the noble Earl sometimes conjures up, usually late at night, then they will drive them through Parliament anyway and we shall have to oppose them by other means.

When discussing a previous amendment, the noble Earl made the point that we had one Secretary of State per year. The current excellent Secretary of State, Mr. Peter Lilley, has been in post since the last election.

Earl Russell

I had a point on the tip of my tongue, but it has gone.

10.30 p.m

Baroness Hollis of Heigham

It must have been a joke about Mr. Peter Lilley.

In my intervention which piggy-backed on the comments of the noble Earl, I sought to establish that reasonable authorities would accept the constraints or conditions being imposed on the way in which they handled that information as being in the public interest. I wish to ensure almost the equivalent of a shared code of conduct between the department and local authorities in order that each understands where the other is coming from so that this subsection cannot be unreasonably applied to the hindrance of local authorities. Clearly we cannot do that through regulation. Clearly, that is not appropriate for a code of practice. But we need some way of ensuring that local authorities agree that what the Secretary of State would be doing is reasonable given the objectives that they are required to pursue under the Bill. We need some forum of consent to the conditions imposed on the assumption that no reasonable authority could object to what the Minister has outlined. Can the Minister help us in some way?

Lord Mackay of Ardbrecknish

Help comes in different ways. I am not entirely sure that I can be helpful to the noble Baroness. I pick up the point made by the noble Earl, and with which no doubt the noble Baroness agrees. I refer to the issue of domestic violence about which the noble Baroness will agree with me as regards protection. When the husband of a victim of domestic violence works in the DSS, she can tell the DSS and we shall then make her record a sensitive one. It will be accessible only to a senior officer, and only specific local authority staff would be allowed to view sensitive records on a need-to-know basis. I hope that is helpful.

We shall certainly look at what extra protection may be needed within the housing benefit computer strategy which we are working out and discussing with the local authorities. I am not answering the noble Baroness in the detail she wishes, but I believe that my last point is relevant to the kind of directions we might give local authorities with regard to either some of the data or, in the case of their plugging into our system, all the data.

Earl Russell

I am extremely grateful to the Minister for the point about victims of domestic violence. That is extremely helpful and I am very glad to hear him say it.

I have also remembered what I was about to say a minute ago. The Minister said that governments do not use powers in quite as extreme a way as I might have suggested. He will be familiar with the phrase used by the Joint Committee on Statutory Instruments: "an unexpected use of powers". The committee reach that finding on statutory instruments on average at least once every year. So it can happen.

Another point which very much interested me was the noble Baroness's use of the word "reasonable". Were we to insert into this clause the word "reasonable", it would make it possible for there to be a legal control on the type of conditions imposed. All the conditions the Minister has proposed are reasonable. It might ensure that we had only those types of condition. Is that an idea that might indicate a way forward?

Lord Mackay of Ardbrecknish

I am not sure whether I am glad or sorry that the noble Earl remembered what he was going to say. But at least I am glad that he has that problem occasionally—I thought it was just lesser mortals like myself.

I am not sure whether I can be any more helpful. The conditions will be specified by the Secretary of State and they will be notified to the local authorities, but only after consultation. I think I can give that assurance to both the noble Earl and the noble Baroness: it will be after consultation. As I tried to explain, although the conditions will not be subject to regulation, they will derive their force from this clause and indeed the Bill; therefore there will at least be some limitations imposed upon them.

Baroness Hollis of Heigham

I am very glad that we elicited from the Minister the point about consultation. As I say, we want those conditions to be such that no reasonable authority could object to them. The test was one of reasonableness. But if the Minister is saying that the test of reasonableness is in any case carried by this phrase, so that if any government were to overstep that they would be subject to judicial review, and that the provision will be accompanied by a concept of consultation as to the framework within which it will operate, then we have gone as far as we reasonably can tonight. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Whitty moved Amendment No. 37: Page 7, leave out lines 35 and 36.

The noble Lord said: In moving this amendment, perhaps I may also speak to Amendment No. 39. The amendments are alternatives; however, at this hour of the night it is probably better to address them together.

The amendments deal with the relationship between the DSS and local authorities. In the fight against fraud, that relationship should be one of co-operation and trust, not one of regulation or of petty cross-charging.

Amendment No. 37 seeks to remove lines 35 and 36 from the Bill. Those lines enable the DSS to charge local authorities for supplying them with information for use in anti-fraud work. The amendment is therefore designed to remove that new power. The charge that is provided for could be a disincentive for cash-strapped local authorities or over-stretched staff relatively low down the line with relatively small budgets.

It is surely the job of all local authorities to co-operate in the fight against fraud in social security and other matters. The introduction of cross-charging is not a helpful concept. Such costs should surely be met out of general budgets. After all, the fees referred to—which are basically fees for retrieval of information—would be relatively small.

I am further puzzled since consulting the record of how this matter was dealt with in another place. The record shows that, while resisting a similar amendment, the Minister there said: We have no plans to use the new power to start charging local authorities for their participation in existing arrangements".

He then went on to describe, at some length but somewhat irrelevantly, the implications of the development of new integrated computer systems and the involvement of the private sector.

Whatever the computer configuration, it is is surely nonsense to establish a new arrangement by which one bureaucracy charges another for acting in the public interest to attack the crime of fraud.

As was remarked earlier, local authorities collect a large amount of money which was previously fraudulently claimed. In 1995–96 it was £220 million. Yet local authorities receive only about 65 per cent. of their costs for tackling fraud from central government—and that is a diminishing proportion according to them—in order to carry out those duties. In comparison with that, the amounts conceivable under these clauses would be minuscule.

I therefore wish to press the Minister to accept Amendment No. 37. If he does not do so and the Committee does not accept it, I ask him to pursue my subsequent amendment, Amendment No. 39, which is the reciprocal power. I do not accept the need for a permissive power for the DSS, but if there is such a need, then surely there is a need for local authorities to have a similar power in the reverse direction. After all, they will be faced with similar costs and similar administrative effort. If the power is necessary for the DSS, then logically it is difficult to see the argument against the provision if the Minister rejects the first amendment. I therefore ask the Minister and the Committee to accept one amendment or the other. I beg to move.

Earl Russell

I support the amendment. I wish to remark in passing that the use of the word "reasonable" in this subsection is an argument that it would be possible to use the word "reasonable" in the same way in line 33 of the subsection. I entirely agree with what the noble Lord, Lord Whitty had to say about cross-charging; it leads to an immense amount of confusion. At this time of night I shall not delay the Committee with the story of the two men who planned to sell a barrel of beer at the Derby. Well, if the Committee tempts me, I shall do so.

In the days of horse-drawn transport, the men were going to take the barrel of beer from Putney to the Derby to sell the beer at threepence a glass. They were going to make a great fortune but their horse went lame. It was a glorious fine morning and they were not going to be cheated out of their profit, so they decided to roll the barrel of beer. They set off up Putney Hill and halfway up one said: "Thirsty work, mate. Can I have a glass of beer? I'll give you threepence". He handed over threepence and had his glass of beer. But after a little while the other chap said: "Yes, mate, you're quite right, it is thirsty work. Can I have a glass of beer? I'll give you threepence". Before they had got halfway, the barrel was empty. Each one had paid for their glass and they could not understand why there was only threepence in the kitty. Those men were the inventors of the internal market.

Lord Mackay of Ardbrecknish

I knew it was a mistake to tempt the noble Earl, but the thought of a glass of beer prompts one to try to get through the amendment quickly.

Perhaps I may try to explain what was intended by the clause, which may help the noble Lord, Lord Whitty. A great deal of information is currently exchanged between the Department of Social Security and local authorities under existing powers. I wish to be clear at the beginning that we do not intend to use the fee-charging power to charge local authorities for the supply of the kind of information we are currently exchanging. However, we are conducting a study into the feasibility of providing local authorities with direct access to the department's computer systems—as I mentioned a few amendments ago—and direct access to the information relevant to housing benefit and council tax benefit that the DSS holds. This will involve additional information technology costs which will depend in part on the extent to which an individual local authority uses the systems available.

If local authorities are to be linked to the department's systems then it may be sensible for the department to be the customer of the corporate system and for it to meet not only the costs of its own usage but also the costs arising from local authorities' use. A fee would then be charged to authorities, a fee which would reflect the costs. The proposed power in the Bill is designed to allow for that.

If the amendment were to be accepted, the opportunity for such an approach would be removed. That could be to the disadvantage not only of the department but of the authorities too. It would potentially weaken us in our efforts to introduce more efficient and effective administration of benefits and it would, I believe, be a setback in our battle against benefit fraud. Moreover, if the costs of the system were simply to be met by the Government and provided as a "free good", then the local authorities would have no incentive to use the system economically, with the risks of increasing total costs to the taxpayer.

As I mentioned earlier, we are already in consultation with the local authority associations about establishing links between local authority systems and the department's systems. There will be further consultation on this subject and, in due course, if links are to be established there will be discussion and consultation about any fees that might need to be introduced. No final decisions will be taken before such discussion has taken place. We are still in the early stages of all this work, but the provision to charge fees lays an important foundation to support the financial arrangements that may be necessary in future if local authority and departmental computer systems are to be linked.

Amendment No. 39 would enable local authorities to charge a reasonable fee in respect of the cost of supplying the Secretary of State or Northern Ireland Department with benefit administration or benefit policy information. I am afraid that this argument is rather a false one because there are no plans for the DSS to use the local authorities' computer systems and it is hard to conceive of any circumstances in which it might make sense to do so. There is no intention on our part to charge local authorities for the supply of information already routinely supplied in the course of benefit administration. So clearly it would not be right for local authorities to charge us for information that they are required to supply.

Most importantly, we should not forget that local authority funding for the administration of housing benefit and council tax benefit, including the provision of information to the Secretary of State, comes from the Government in the form of administration subsidy and the revenue support grant. We review these arrangements periodically and discuss them between the local authorities associations and ourselves. But the truly important point that I make is that we do not envisage the power that we take here being used in the current arrangements—only if we move to the next step and the local authorities make use of our system. We obviously pay for that system and we should then wish them to be able to pay their fair share of the usage of our system. It is to be hoped that it will save them some money and they will not have the same need to run their own system.

With that explanation of why we want to take this power, I hope that the noble Lord will feel able to withdraw his amendments.

10.45 p.m.

Lord Whitty

I fully accept that the Minister has indicated that he has no intention to use the power in present circumstances and any future use of it will be subject to further consultation and consideration.

I am not entirely sure that I follow his rejection of the subsequent amendment. If we are envisaging a change of computer configuration for the DSS, it is quite likely in the course of a number of years that there would be direct access to local authority computers as well. However, at the moment we are dealing with that slightly futuristically. On the basis of the assurance that we received tonight, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 38 to 43 not moved.]

Earl Russell moved Amendment No. 44: Page 9, line 38. at end insert—

("Destruction of information not being actively used in an investigation.

122F. Any information disclosed pursuant to sections 116, 116A. 116B. 122, 122A, 122B, 122C, 122D or 122E above shall be destroyed within one month unless it is being actively used in a particular investigation or prosecution of a criminal offence."").

The noble Earl said: This amendment intends to place a moratorium on the preserving of information collected under the proceedings of this Bill. It attempts to restrict the time for which information may be preserved to one month.

If the Minister wishes to argue that that time is too short, I should be prepared to listen to him. I am concerned that information should not be preserved indefinitely. This is the same kind of principle as the principle of the spent conviction. Information should not lie around in ambush waiting to haunt one for the rest of one's life.

I believe that the principle is also of considerable importance to those responsible for the storage of records. The storage of records takes a very great deal of space. I am told that the records of the King's Bench in the Public Record Office take up 11 miles of shelving. I understand that with computers the records take up a great deal less space. But even computer records take a certain amount of space. The Minister understands that space in central London is expensive and that transport is expensive; even electronic conveying of records can be expensive. Therefore, the preserving of this vast mass of records is bound to create a considerable expense somewhere.

The Minister frequently accuses me of being indifferent to the interests of the taxpayer; but I occasionally feel like retorting the charge upon him. Under this Bill he is proposing to produce an immense and unwieldy mass of data which are going to create a situation a little like the one which affected the unfortunate countryman from the 16th century, who was offered a chance to sell his corn. He was to pay one grain of corn the first month; two grains the second; four grains, and so forth. By the time the case reached the Court of Requests, which unfortunately for him was a court of equity, he was owing a debt of several billion grains of corn. I cannot help thinking that the Minister's records, if he does not do something about them, will grow in very much the same way.

The Minister occasionally talks to us about costings. Do we have any costing of what it will cost to store all those records? How was that costing arrived at? Why does the Minister think that it is a responsible expenditure of public money? I beg to move.

Lord Mackay of Ardbrecknish

I suppose there is a slight relationship between the man from Ipswich and these matters about data matching, because the man from Ipswich had not studied his mathematics properly. Equally, the teller of the tale of the man from Ipswich does not realise that most of the data will be held in computers and not on paper on great shelves. However, I leave the man from Ipswich to one side and look at the amendment.

The amendment requires information supplied to the DSS under the provisions of the Bill to be destroyed within one month if it is not being actively used in a particular investigation. The sixth data protection principle requires that, Personal data held for any purpose or purposes shall not be kept longer than is necessary for that purpose or purposes". The noble Earl makes a valid point. From our point of view we would not want to keep it longer than necessary. Although a computer disk may contain a vast amount of information, it still takes up space, though less space than do paper records.

It is our intention that the retention of social security information should be in line with the sixth data protection principle. In the case of data matching, the normal practice would be to put the information which has been supplied to use quickly. It is important to identify discrepancies within the existing social security information system quickly, so that they can be investigated while the trail is warm. However, the amounts of data involved are vast and there are several benefit databases involved. Therefore, for operational reasons, one month would certainly be too tight a time limit.

Also, there are circumstances where it would be appropriate and efficient to retain the data supplied beyond a single data-matching exercise. For example, the Revenue obtains certain information only once a year, whereas our data are continuously changing to reflect new benefit claims. The Inland Revenue data may be needed to check the new claims and it would be wasteful for the Revenue to supply exactly the same information again and again. When new information is available and is being supplied to us, the old information can be destroyed. The retention period in each case will be determined in accordance with the data protection principles. In all cases the information will be held in secure conditions.

Those are examples, but development work is being done on exactly how the data will be used. The noble Earl's amendment recognises that it may be necessary to retain information while an investigation is in progress. That is right. While we try to investigate inconsistencies quickly, some of the inquiries may take some time—for instance, if the case is complex or if the claimant has moved and cannot immediately be contacted. However, the condition of active investigation is too onerous. Experience of data matching has shown that a particular anomaly might be identified in several different data matching exercises. It is clearly in the interests of the claimant and of the taxpayer that a case is not reinvestigated unnecessarily. It puts the claimant to extra inconvenience and diverts investigative resources. So information about each match found is retained and any new match is checked against that information to identify any duplication. But, if information on previous matches needed to be discarded once active investigation ceased, there would inevitably be more nugatory investigation.

The noble Earl asked about estimated costs. The costs for use of the powers are set out in the Financial Memorandum; £1 million in 1997–98 and £1.5 million a year thereafter. The cost of storing the data will be a relatively small part of that. We will store data for only as long as we need it both to satisfy the data protection principle and for exactly the financial reason the noble Earl raised with me.

The amendment would apply to all supply of information under provisions of the sections stated and not just information supplied for the purposes of the prevention and detection of offences and of checking accuracy. That would have extremely damaging consequences for the efficient operation of our system where the information is supplied in the course of routine administration. For example, there is information about national insurance contributions. That is not kept for a month or a year. It may need to be kept for 40 years or more because the future entitlement to a retirement pension may well depend on it; indeed, a good deal more than 40 years because it depends how long the person lives and then if there is a dependant who outlives that person. Those records have to be kept for a very long time. However, I know the noble Earl was not thinking about those particular records.

While I appreciate the point being made—the desire to keep the cost of this down—the amendment seeks a firm and far too short time limit on the retention of data. As I think I have explained, no one stands to gain by using out-of-date information or keeping it. None of us—ourselves, the Northern Ireland department or the local authorities—will keep data longer than we absolutely need to in order to comply not only with the data protection principles but also with the simple finances of storing the data.

I hope the noble Earl appreciates that his month is indeed far too tight. But it is rather more complicated than that, because the Contributions Agency's information and data are also encompassed by this and they are needed for a very much longer time. With my assurances about our care over the costs, our intention to obey the principles of the Act and that we will not keep data for longer than is absolutely necessary, I hope the noble Earl will feel able to withdraw the amendment.

Earl Russell

I thank the Minister for a serious and thoughtful as well as a helpful reply. I was very much persuaded by what he said. I take his point about the sixth data protection principle. I take his point about national insurance records. I take his point about one month. He can probably compose in his sleep the reply that I might have made about being judge in his own cause of what is necessary. I hope that when he does sleep, which I hope is not too far off, he will not find himself doing that because I am not going to make that reply. Anything the Minister does not have already—that is, if anything, very little—the cost would soon remind him of. So I think this one is all right. I am pleased to beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 3 agreed to.

House resumed.

House adjourned at eleven o'clock.