Lords Sitting of 13 March 1997

Preamble
The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Sheffield.): The LORD CHANCELLOR on the Woolsack.

Tributes to the Late Earl of Listowel
The Lord Privy Seal (Viscount Cranborne): My Lords, as Leader of your Lordships' House, it is one of my sadder duties, although perhaps a privileged one, to lead tributes in your Lordships' House. Today I rise to pay tribute to the late Lord Listowel, who sadly died yesterday afternoon.
Lord Listowel—or Billy as he was affectionately known to his many friends in your Lordships' House—had recently joined the distinguished band of your Lordships active into their nineties. He succeeded his father as long ago as 1931, and took his seat in the following year. This made him the longest serving active Member of our House. He thus had the distinction of having been a Member of your Lordships' House for 65 years. I suggest, if I may, that few can equal his record of service to this House. I should also record that he had the distinction of being the longest serving member of the Privy Council, having been appointed to that body in 1946.
Lord Listowel had an unusual career. Having gained experience in local government both before and after the Second World War, he served in Sir Winston Churchill's Government from 1944 to 1945 as Parliamentary Under-Secretary of State for India and Deputy Leader of your Lordships' House. He then served as Postmaster General; as Secretary of State for India and for Burma; as Minister of State for the Colonies; and as a Parliamentary Secretary in the Ministry of Agriculture. He was also Governor-General of Ghana from 1957 to 1960. As your Lordships will know, Ghana was the first African nation to achieve independence from the United Kingdom. As Governor-General, Lord Listowel saw that fledgling nation through its first heady days of independence. I venture to suggest to your Lordships that there can be few Members even of this august House who can record such a varied and distinguished record as a Minister and servant of the Crown.
Lord Listowel also had a remarkable career in the House. As your Lordships will remember, he was Chairman of Committees from 1965 to 1976. At the start of his term of office, he oversaw a major reorganisation of the administration of this House. For the first time the Administration Committee operated as an executive body; and for the first time an executive rather than merely an honorary Black Rod was appointed. This period also saw valuable additions to your Lordships' facilities. The Dining Room was extended, and infill building work took place in State Officers' Court providing a considerable amount of new accommodation.
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As Chairman of Committees, Lord Listowel spent many hours on unopposed Bill committees following the passing of the Local Government Act in 1972. The Act established a framework for a new local government structure, but individual authorities needed to apply to Parliament for their own Private Bills. Consideration of these Bills by the Chairman of Committees ensured the effective scrutiny of this highly complex legislation. Lord Listowel also sat for many years as a Deputy Speaker of your Lordships' House. Indeed, his friendly face was a familiar sight on the Woolsack right up until 17th July last year. Those of your Lordships who were in the House in the early 1970s will remember that he worked particularly long hours during that time when the House sat far later far more often than has perhaps recently been the case. The Chairman of Committees tells me that after Lord Listowel's last sitting on the Woolsack he wrote to say what a joy it had been to sit and feel wanted at his age. He remained on the panel of Deputy Speakers right up until the day of his death.
As a man, Lord Listowel, I think it is fair to say, was held in as high a regard as any Member of your Lordships' House. He was always kind and gentle and an unfailing friend to all of your Lordships no matter where they sat in this House. I can say without fear of contradiction that he will be sorely missed. I am sure that your Lordships would wish to join me in giving our condolences to Lady Listowel and her family and to pay tribute to a much loved figure in your Lordships' House.
Lord Richard: My Lords, I am delighted to follow the noble Viscount the Leader of the House in paying tribute to my noble friend Lord Listowel. It is a somewhat sobering reflection to realise that he was a Member of this House longer than I have been on this planet. It is always sobering when that happens. I remember appearing in a case not too long ago when I discovered that another barrister on the case had been called to the Bar five years before I was born. I suppose one has to get used to longevity in this House, but it is a somewhat sad event when one has to do what we are trying to do this afternoon.
Lord Listowel was a well known, prominent and much respected Member of your Lordships' House. As the noble Viscount the Leader of the House has said, his political career was long, distinguished and varied. It was based firmly upon his commitment to the Labour Party and the principles—as he perceived them—on which that party was based. It is said that he went up to Balliol but his father removed him after he had been there a year because he had shown dangerous Left-wing tendencies and had started to make radical speeches in the union. Having been removed from Oxford, he was then sent to Cambridge. I am told that Cambridge proved no less subversive than Oxford had been. His political career followed from that.
I think it is right to say that apart from the noble and learned Lord, Lord Hailsham, Lord Listowel was the last survivor of the coalition government. Indeed he was Labour Chief Whip in the House of Lords from 1940 to 1944. In 1944 he became Deputy Leader of the House. I think that the grandfather of the Lord Privy Seal was at that time the Leader of the House. With the change

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of government in 1945, he moved into ministerial office. I suppose that he will be remembered most for his contribution to colonial and Commonwealth affairs.
The noble Viscount the Leader of the House referred to Lord Listowel's time as Secretary of State for India. He played a crucial role in the run-up to the independence of that country. Later he became Governor-General of Ghana, where he struck up, it seems, a remarkably warm relationship with President Nkrumah. I do not think that was a relationship that followed necessarily from all President Nkrumah's relationships with British politicians, governors-general or Ministers; but with regard to Lord Listowel, deep respect and affection were felt on both sides.
The noble Viscount referred to Lord Listowel's time as Chairman of Committees. He was, I think, the first Labour Chairman of Committees in your Lordships' House. He served his time there with distinction. He sat regularly on the Woolsack until last summer. I have one personal memory of Lord Listowel which I treasure. The first election I ever fought was in 1959 in South Kensington. That is not a part of the country noted for its Socialist affiliations. It was very difficult to get anyone to come down to make a major speech on behalf of the cause, in so far as one did make major speeches in South Kensington. Lord Listowel was approached. He accepted. I well remember a packed meeting in Kensington Town Hall where Lord Listowel, with perhaps uncharacteristic robustness, took on the record of the then Conservative Government. Lest it be thought that it had a great effect upon the result, I can say only that with his efforts and mine I saved my deposit by 40 votes.
Lord Listowel was, as the Lord Privy Seal has said, a man of extraordinary politeness, kindness, patience and natural courtesy. He will be greatly missed by the House as a whole. He was a distinguished and assiduous servant of the House. Those of us on these Benches would wish to remember him as a good and loyal colleague who served his party and his country well. On behalf of my noble friends, may I join with the Lord Privy Seal in expressing our deepest sympathy to Lady Listowel and her family.
Lord Jenkins of Hillhead: My Lords, Lord Listowel was, until almost last week when I think I remember last seeing him, living history, expressed with a quiet dignity and a modest sense of service which had infused his whole long life. He was a Peer, as we have been told, for nearly 66 years; a junior Minister in Churchill's Grand Coalition; Deputy Leader of your Lordships' House over half a century ago; a Secretary of State under Attlee, who later, when he had discharged his task of getting rid of the charge for which that department of state was created, was content to become a Parliamentary Under-Secretary at the Ministry of Agriculture and Fisheries. That shows a true sense of humble duty, although he later reblossomed as a successful governor-general and as Chairman of Committees here for 11 years. It was a great record of un-self-seeking service. He will be much missed in this House and I join with my noble friends in expressing sympathy to his widow.
Baroness Hylton-Foster: My Lords, I was not a Member of this House when the very distinguished Lord Listowel was Leader of the House. With all the Cross-Benchers, I should like to join in the tributes which have already been paid by so many of those who knew him many years ago and latterly.
As Convener of the Cross-Bench Peers, I was in the fortunate position of getting to know him better when he was Chairman of Committees, and also, for some time, as has been said today, Deputy Speaker. We on these Benches always admired his impartiality. He was always tremendously patient. He showed courtesy and many kindnesses, about which no one really knew anything. He was more popular because he was modest, and he was loved as a result on all sides of the House. We on the Cross-Benches admired him. I believe, as the noble Viscount the Lord Privy Seal said, that it was 17th July last year that he sat last on the Woolsack. On these Benches we shall always remember him with affection and great respect.
The Lord Bishop of Sheffield: My Lords, from the Bench of Bishops I wish to add a word of gratitude and respect to Lord Listowel. We valued a colleague who, as long ago as 1931, had written a book on the values of life. He was a philosopher who was both wise and good—in the true sense of the words, a philosopher prince. He will be missed, and we are grateful for all he gave to the country and to this House in all those years.
Lord Donaldson of Kingsbridge: My Lords, as I knew Billy Listowel before most people in this House were born, I wish to record one of what his father regarded as his dangerous and disagreeable Left-wing tendencies. He formed a group of people, of which I am ashamed to say I was not one, to try to live on the dole, and they did for about five years.

UNHCR: Funding
3.17 p.m.
Lord Rea Lord Rea asked Her Majesty's Government:
What recent discussions they have had with the United Nations High Commission for Refugees concerning the adequacy of the funds available to it.
Lord Chesham: My Lords, we stay closely in touch with the office of the United Nations High Commission for Refugees and my noble friend Lady Chalker announced a further contribution of £5 million on 11th March.
Lord Rea: My Lords, I thank the noble Lord for that Answer. Are the funds available to UNHCR keeping pace with the number of refugees, especially of course those in the developing world? Is he aware that after a few years there is often a larger number of refugees to be returned than the number of those originally displaced owing to their high fertility rate, which is consequent upon the vulnerability of women in refugee

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situations and the lack of reproductive health services? Is the UNHCR addressing that problem adequately either itself or through other agencies or NGOs?
Lord Chesham: My Lords, we do not believe that the UNHCR is badly funded. In 1996 it came close to reaching its target for general programmes. It raised more than its target for nine out of its 15 major special programmes. We can only agree about the increasing number of displaced persons. Projects related to the protection and health of women refugees are now part of many UNHCR programmes. Typical projects relate to family planning and income generation. The UNHCR has guidelines on the protection of women refugees which it applies wherever it is active. Gender issues form a significant part of staff training.
Lord Renton: My Lords, could it be pointed out in discussions with the United Nations High Commissioner for Refugees that the United Kingdom has received more than its fair share of the many refugees in this world and has contributed financially as well as any other country?
Lord Chesham: My Lords, my noble friend makes a very good point. I do not necessarily think that it is important for us to raise the matter. I believe that around the world what we do is generally appreciated.
Lord Avebury: My Lords, I appreciate the additional contribution announced by the Minister towards the UNHCR's programme. But does the noble Lord believe that it is satisfactory, and does the UNHCR see it as satisfactory, that money has to be raised specially to meet emergencies as they arise? Is it not dangerous for the commission to have to rely on the generosity of donor nations at a time when refugee problems such as that in eastern Zaire are getting worse? Does the Minister also agree that we need to put the UNHCR's funding on a sound basis before it extends its role too far into dealing with the internally displaced, which is a huge extra burden on the resources available?
Lord Chesham: My Lords, part of the budget of the UNHCR comes from the UN budget; that is on a regular basis. However, we are never certain what catastrophes will occur and where. It is essential that, rather than saying, "Here is x amount, and that's it", everyone should always be prepared, if a particular problem arises, to be in a position to help.
Lord Hylton: My Lords, will the Minister tell the House whether the budget of the UNHCR contains any provision for preventive diplomacy aimed at stopping, in particular, the outbreak of internal conflicts and the vast displacements of population that they cause?
Lord Chesham: My Lords, I am not sure that that comes within the role of the UNHCR. I do not believe that it is part of its brief.
Lord Judd: My Lords, we all appreciate the additional support for the UNHCR. In the still deeply
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disturbing crisis of the Great Lakes region of Africa, how successful has it been in locating and reaching all the refugees? Have the Government seen the reports of large numbers of children having died or being at risk in eastern Zaire and of young Rwandan men being among refugees who, having been taken, have not been seen again and are presumed killed? Does the UNHCR really have the resources and backing to deal with all this? Can safe corridors—for example, back to Rwanda—be established? Wherever the UNHCR operates, can we ensure that it has adequate resources for its mandate for the protection of refugees, not least against enforced repatriation?
Lord Chesham: My Lords, that question covers quite a large area. I shall try to answer as best I can. In relation to the point about children and young boys missing, we have not received any firm evidence of these sorts of atrocities. However, we treat all such allegations very seriously. We are urging the UNHCR to investigate crimes. We have not seen any reliable reports on the abduction of boys.
So far as children generally are concerned, this month we provided a further £250,000 in support of the Save the Children Fund tracing and family reunification project within Rwanda. That is in addition to an earlier £250,000 for its emergency programme in eastern Zaire. We support those activities as we can.
As to the refugee situation more generally in eastern Zaire, there is a problem regarding the difference between the army and the rebels. We are urging all regional leaders with influence on Kabila to press him to agree to an immediate cease-fire so that corridors can be set up. At present we are not in a position to demand anything very much. We do not have an international armed force in the area. If we had such a force there, we should have to consider such proposals very seriously. We very much regret that the Zairian Government recently expelled 40 international relief workers, including several from the UNHCR. We are protesting as much as we can on that issue.
Lord Rea: My Lords, may I ask the Minister a specific question of which I gave him notice? I refer to the Atrush refugee camp in northern Iraq for Kurdish refugees from Turkey. The UNHCR ostensibly closed the camp earlier this year but apparently the refugees have refused to go home. As the Minister may be aware, I intended to go on a human rights visit to the camp. However, we have been unable to get transit permission. Does the Minister have any news about the well-being of this large group of 15,000 to 20,000 people, largely consisting of women and children?
Lord Chesham: My Lords, our latest information is that refugees are now leaving Atrush. Some have chosen to return to Turkey; several thousand have stayed in northern Iraq. The UNHCR and the World Food Programme continue to provide assistance as necessary. However, the UNHCR does not have access to the camp at Atrush and has no estimate of the number of refugees remaining there.

Water Fluoridation
3.26 p.m.
Baroness Fisher of Rednal Baroness Fisher of Rednal asked Her Majesty's Government:
Which organisations and authorities have been consulted on proposed guidance regarding the Water Fluoridation Act 1985, now contained in the Water Industry Act 1991.
The Parliamentary Under-Secretary of State, Department of Health (Baroness Cumberlege): My Lords, comments on the draft guidance for health authorities on water fluoridation were invited from the former regional health authorities, the Water Services Association, the Water Companies Association and other government departments.
Baroness Fisher of Rednal: My Lords, I thank the noble Baroness for that reply. On 20th January she said that guidelines would be available in the spring. I do not suggest a date when spring starts and finishes. However, I hope that she will be able to highlight in the guidelines the deplorable state of affairs between the water authorities and the side concerned with public health. The two are constantly in conflict. That was not the intention of the Water Fluoridation Act when it was put on the statute book. Can the Minister give the House any assurance that that conflict will cease following the publication of the new guidelines?
Baroness Cumberlege: My Lords, that would be our intention. The water authorities want further clarification on one or two matters of detail. We will try to achieve that.
Baroness Hayman: My Lords, we now understand from Mr. Malone that the advice that the Department of Health is issuing is to health authorities rather than to the water companies. Is that not the wrong target? What action will the Government take to ensure that water companies, following proper consultation by health authorities and a request for fluoridation, act within the intentions of the 1985 Act?
Baroness Cumberlege: My Lords, it is a matter for the water companies to decide whether or not they wish to fluoridate the water. The guidance will be useful to water companies as well as to health authorities.

Pilgrim Trust
3.28 p.m.
Lord Cocks of Hartcliffe Lord Cocks of Hartcliffe asked Her Majesty's Government:
Whether they will ask the Charity Commission to investigate whether the grant by the Pilgrim Trust towards the funding of the Constitution Unit is compatible with the trust's status as a registered charity.
The Parliamentary Under-Secretary of State, Department of National Heritage (Lord Inglewood): My Lords, if any noble Lord ever has evidence of impropriety by any charity and passes it on to me, in turn I will pass it on to the Charity Commission.
Lord Cocks of Hartcliffe: My Lords, I thank the Minister for that reply. It is my understanding that the Pilgrim Trust has given the money to the Constitution Unit, which is not a charity, for general purposes. Does the Minister agree that this is a matter to which the attention of the Charity Commissioners should be drawn?
Lord Inglewood: My Lords, the noble Lord, Lord Cocks, having raised the matter on the Floor of the House, I will pass on his comments to the Charity Commission.
Lord Jenkins of Hillhead: My Lords, I should declare an interest, although it will become obvious, having had the pleasure of being a trustee of the Pilgrim Trust for some 21 years. Successive chairmen have been: to begin with Lord Harlech, the father of the present noble Lord, Lord Harlech; Lord Richardson of Duntisbourne, a former Governor of the Bank of England; Sir Harry Fisher, an ex-High Court judge; now it is Mrs. Mary Moore. My fellow trustees of the Pilgrim Trust are now the Lord Chief Justice of England and a variety of other distinguished people including, from the noble Lord's own party, Sir Claus Moser.
The noble and learned Lord, the Lord Chief Justice, was present at the launching of the Constitution Unit study, as was the present Secretary of the Cabinet, Sir Robin Butler. The previous Secretary of the Cabinet, the noble Lord, Lord Armstrong of Ilminster, is also a trustee of the Pilgrim Trust. The idea or the implication of the noble Lord's Question that the Pilgrim Trust and the Constitution Unit are politically motivated bodies is an example of the extraordinarily malign fantasies which occasionally seize the mind of the noble Lord, Lord Cocks.
Lord Inglewood: My Lords, standing at the Dispatch Box it is not for me to answer the questions that have been posed. It is a matter for the Charity Commissioner.
Lord Cocks of Hartcliffe: My Lords, I am sure that the Charity Commission will give due weight to the remarks of the noble Lord, Lord Jenkins, since he recently led a major debate on transparency in political funding. Will the Minister give a sense of urgency to the Charity Commission? I have already waited nine months for the results of its investigation into the Scarman Trust, which was formerly the Charter 88 Education Trust.
Lord Inglewood: My Lords, in the case of the Scarman Trust, formerly the Charter 88 Trust, I gather that the inquiry had to look at a number of complex issues. The inquiry is soon to be finalised. I understand that emerging findings are that the trust will be required to clarify and, where necessary, review and revise its relationship with other organisations. I am sure that the

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Charity Commissioner will take forward his inquiries as speedily as possible, consistent with carrying out a thorough and proper inquiry.

Fur Imports: EU Regulation
3.32 p.m.
Baroness Castle of Blackburn Baroness Castle of Blackburn asked Her Majesty's Government:
What steps they are taking in the Council of Ministers to ensure that Regulation 3254/91 banning the import into the European Union of furs from animals caught in the leghold trap is implemented without any further delay.
The Minister of State, Department of the Environment (Earl Ferrers): My Lords, the Government have strongly supported the regulations which were adopted by the Council of Ministers in November 1991. The European Commission is negotiating with the main fur-producing countries an agreement by which the principles of the regulations can be implemented. The Council of Ministers has requested the Commission to introduce an import ban if no satisfactory agreement can be reached.
Baroness Castle of Blackburn: Yes, but is it not a fact that it is five years since the regulation was passed? It is over a year since an agreed date for its implementation was fixed as January 1996. There is no end date for the negotiations yet agreed so that the implementation can begin. Is not the villain of the piece the Commissioner for trade? I am sorry to say he is a British Commissioner in the European Community who is holding up the obvious desire of the Environment Council, the responsible body, on which I am glad to say our British Minister has played a distinguished and firm role, by all sorts of procrastination and dragging of feet?
Does the Minister agree that the fur trade in this country and throughout Europe has become uppish again as a result of that dilatoriness? So today we see restored on the backs of beautiful women from Madonna to the models on the catwalk the furs which may have come from animals caught in that barbaric and cruel trap. Does the Minister therefore agree with me that we should encourage British women to refuse to wear fur, saying that it is not a badge of fashion but a badge of shame?
Earl Ferrers: My Lords, I admire the noble Baroness, Lady Castle, enormously and always have done. I long to agree with her. I always have done. But, unfortunately I have never been able to. I am afraid I do not agree with her today at all. She says that there is no end date to the negotiations. She is perfectly right. There are no end dates to negotiations; you have to find a solution to them. She blames the Commissioner for Trade but she is, if I may say so, quite wrong. She says that there has been procrastination and, if I may say so, she is quite wrong. In 1991 the environment Ministers agreed to ban the import of furs. What we are trying to do now is to agree how that
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should be done with those countries—in particular Russia, Canada and America—where there are problems. It is better to have an agreement. If we do not get an agreement, there is the problem of contravention of World Trade Organisation agreements and a trade war. That is what we are trying to avoid.
Lord Pearson of Rannoch: My Lords, does my noble friend agree that it is often impossible to know the genuine provenance and destination of many goods circulating in Europe, given the fraudulent nature of the single market? In this case, can my noble friend tell the House how the regulation proposes to tell the difference between the skin of an animal that has been caught in a leghold trap and the skin of an animal that met with a less painful end?
Earl Ferrers: My Lords, that is one of the factors in the negotiations.
Baroness Nicol: My Lords, will the Minister accept that when I started in politics quite a long time ago, I was known as "the poor man's Barbara Castle"? I now realise what a compliment that was. Given that this country banned the traps as long ago as 1954, is it not a great shame that we now have to reproach a British Commissioner with apparently delaying the implementation of the new agreement? I wish to add my compliments to the present Secretary of State for the Environment who has worked hard to get the agreement adopted. I think we should give him credit for that. However, perhaps some reproach should be given to the British Commissioner for not implementing the agreement.
Earl Ferrers: My Lords, the compliment paid to the noble Baroness was a good one and she need feel no shame about it. It is a great glory. Having said that, I believe that she also is wrong. We must get away from the business of trying to reproach the Commissioner. What happened was that the environment Ministers agreed that there should be a prohibition. What was not agreed was how the ban should be implemented. It is in order to try to negotiate how to implement the ban and the factors involved that the discussions are continuing. My right honourable friend the Secretary of State wants an unconditional ban on steel-jawed leghold traps and action to phase out padded leghold and aquatic traps. If an agreement cannot be arrived at, then the instructions are that the proposal should be implemented. But there are dangers with it. It is better to get an agreement than to have a trade war.
Lord Carter: My Lords, is the Minister aware that the proposal being considered for approval by the International Organisation for Standardisation, which has a role, would allow traps that take up to three minutes to kill the animal? That would allow significant injuries such as the amputation of digits, bone fractures and tissue lacerations. The proposal would allow a trap-to-death time of at least three minutes and probably much longer. Do the Government agree with the Labour Party that such

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traps are completely unacceptable and, with us, will they oppose any attempt to allow them as a way of getting round the proposed ban on the import of furs?
Earl Ferrers: My Lords, my right honourable friend the Secretary of State went to the Council of Ministers with a steel-jawed leghold trap and a pencil. He put the pencil in the leghold trap in front of his colleagues on the Council of Ministers and the pencil was stripped in two. That shook his colleagues. It is for that reason that my right honourable friend is doing all he can to get the leghold traps banned. But you have to get the agreement of your ministerial colleagues and then try to get agreement with the countries who use them not to import into Europe furs procured by such methods. It is better to try to get an agreement with them rather than to have the possibility of a trade war.
Baroness Castle of Blackburn: Is the Minister aware that he is no better than the Commissioner for Trade, Sir Leon Brittan? The Commissioner stated that there can never be any international agreement to curb an iniquitous practice because it would interfere with the GATT agreement. Does the Minister know that Article 20 of the GATT agreement allows exceptions to be made when necessary to protect public morals or the life or health of humans, plants and animals? This is a clear case coming under Article 20, as argued very effectively in the Environment Council by, I am glad to say, a British environment Minister. So why do the Government not have the courage to tell the British Commissioner for trade that he is defying both the will of the Council of Environment Ministers which is the responsible body and which has unanimously rejected these spuriously humane methods of trapping and also the will of Parliament? Are we in this House saying that the Commissioner can defy all the democratic controls in Europe?
Earl Ferrers: My Lords, the noble Baroness sometimes becomes very irate and sometimes she is quite rude to people. I think she meant to be rude to me this afternoon. In fact she has paid me the greatest of compliments. She says that I am no worse than the Commissioner. My goodness me, I regard that, rather like the noble Baroness behind her, as a great compliment.
I must try to get over to the noble Baroness a point that she seems to be finding very difficult to accept for some reason. The fact is that it is not the fault of the Commissioner for Trade. From a sedentary position, the noble Baroness says yes, it is. I can assure her, no, it is not. The fact is that the Commissioner for Trade is doing his best to reach an agreement, which is much better than having all-out conflict.
Baroness Park of Monmouth: My Lords, I hate to take the personalities out of this discussion. However, will my noble friend the Minister confirm that the problem has arisen because Directorate-General XI on the environment totally failed to consult and work with Directorate-General I on GATT. The whole issue stems from relative incompetence, I am sorry to say, in
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manoeuvring and managing this business in the Commission. It is not a personal matter; it is a matter of bad organisation.
Earl Ferrers: My Lords, I am not sure whether or not that is supposed to be a compliment. I shall take it whichever way I can. The fact is that the regulations were agreed to be implemented, but there was no decision on how the ban should be carried out. That is the problem that is being overcome. No matter whose fault it is, the main principle is to try to get in place as soon as possible the ban which the noble Baroness wants to have in place.
Baroness Castle of Blackburn: Has the Minister been to Strasbourg in the past few days, as I have, and talked to the Commissioner for Trade, Sir Leon Brittan? Has he heard him admit that he is the prime mover in trying to thwart the will of Parliament and of the Council and to push through the spurious agreement on humane methods of trapping, which merely consist of putting a bit of plastic round the jaw but still holding the animal in pain and panic?
Earl Ferrers: My Lords, I have not had the privilege of going to Europe as the noble Baroness has. I have been detained in your Lordships' House because her party is being so difficult over some of the business we have to transact. Unlike the noble Baroness, Ministers are not allowed the privilege of escaping. I am surprised that her Chief Whip allowed her to escape whereas mine does not allow me to do so. Nor did I have the privilege of being a fly on the wall and hearing the noble Baroness's conversation with Sir Leon. Although I have the greatest admiration for her integrity, I think that I would like to hear Sir Leon's version of the conversation as well as hers before I come to a conclusion.

Social Security Administration (Fraud) Bill
3.45 p.m.
The Minister of State, Department of Social Security (Lord Mackay of Ardbrecknish): My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee.—(Lord Mackay of Ardbrecknish.)
On Question, Motion agreed to.
House in Committee accordingly.
[The CHAIRMAN OF COMMITTEES in the Chair.]
Earl Russell Earl Russell moved Amendment No. 44A:
Before Clause 4, insert the following new clause—
AUTOMATED DATA PROCESSING
(" . After section 187 of the Social Security Administration Act 1992 insert—
"Automated data processing.
187A. No decision concerning or relating to a person's entitlement to any benefit, or to the payment of that benefit, shall be validly made if it is based solely on the automated processing of data.".").
The noble Earl said: Having enjoyed the preceding exchanges, I shall begin in the same spirit by relating an incident. One very hot summer day in 1981 there was the kind of thunderstorm which only the east coast of the United States knows. The United States social security main computer was struck by lightning and lost its memory. That was discovered only when an old lady in San Francisco went to claim her pension and was given a monthly pension cheque for the sum of 5 million dollars. The old lady took it hack. That is an entirely commendable spirit of honour but one cannot count on it happening universally.
We all know that computers are capable of error. We have probably all experienced errors made by computers. Bank computers are capable of paying amounts to the wrong person. I have had a good deal of experience of that and have endeavoured to react in the spirit of the old lady in San Francisco. We heard recently in the debate on party funding and related matters a good many stories about fundraising letters which computers had sent out to the wrong people. So I do not feel that we need have any argument about whether or not computers are capable of error. They are.
It is also extremely difficult to correct an error made by a computer. Somebody has to talk to the computer and the computer does not always listen. Computer generated letters, repeating errors, are sent out and are received over and over again. I shall not regale the House with experiences involving other American banks. The Minister knows my views about the computers in American banks. But that underlines why it has been decided in European Union Directive 95/46, Article 15, that decisions should not be based solely on automated data processing. It is a very good protection for the principle of civil liberties.
Moreover, it is a directive which will need to be in force in English and Scottish law not later than April 1998. If it is not done now, which is a convenient moment to do it, it will necessarily take up the legislative time of a future government. To attempt to clutter up the legislative programme of a future government is a form of scorched earth policy in which I hope this Government will not indulge, especially since it is still possible that it just might be them.
I believe that it would be highly convenient as well as just and practical to put that principle into our law now. If we do not do it now, we shall have to do it very soon. It is a strong case and I do not see a case to be made against it. I beg to move.
The Earl of Balfour: Before my noble friend the Minister replies, I wonder whether I could ask him to take up with the social security offices throughout the country, and the Customs too for that matter, the need to ensure that at least somebody is trained to be able to delete a mistake in the computer and put it right. I am sure I cannot be the only one who has found that a number has been misplaced or a wrong postcode has been put on letters, and no matter what I do or what letters I send, they still come back wrong.
I understand that it is a matter of training and people need to be specifically taught to go through a special procedure—I do not know what procedure—whereby
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you can correct or delete something in a computer's memory and put it right. If I may respectfully say so, in a number of government departments the people with that ability seem to be extremely rare.
Lord Mackay of Ardbrecknish: Perhaps I may respond to my noble friend. It is not so much ability; it is authorisation. One has to ensure that the person who corrects or alters something in a data bank or database is authorised to do so, so that unauthorised persons cannot make changes which are not corrections but which are actually adding wrong data to the computer. It is more a matter of the people who are authorised to do it doing it than it is people trained to do it. The authorised people are well trained to do it.
The question of mistakes is one of the important aspects of the first part of the Bill. Data matching will in any case throw up mistakes of a postcode nature. It will then be up to people who have been employed to do this to decide what is, for example, the right postcode and then to make the alteration. They have to be authorised, otherwise one could have people making unauthorised entries which might be wrong or fraudulent entries. That is one of the things we have to guard against.
The amendment largely retraces some of the ground we covered on Tuesday. I shall therefore be fairly brief. I hope the noble Earl does not mind. I can easily refer him to quite a few column inches of Hansard for Tuesday on this point. The amendment is prompted by Article 15.(1) of the European Union second directive on data protection which is concerned with automated decisions. It is not clear that the article covers decisions about benefit entitlement. With the amendment, the noble Earl is seeking to insert into our domestic law a provision which would specifically prohibit benefit decisions being taken solely by the automatic processing of data.
I have already covered our plans for the use of the powers within the Bill but perhaps I may again offer the noble Earl the reassurance I offered earlier in the Committee stage about the code of practice and also in response to Amendment No. 20 in the name of the noble Lord, Lord Carter. The discovery of an inconsistency during a data matching exercise will not lead immediately or automatically to a stop on the payment of benefit. I can put it no plainer than that. I thought I had put it plainly on Tuesday.
Where an inconsistency is discovered which might indicate that an existing benefit award is incorrect, the normal procedure will be for the case to 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. That may be impractical where, for instance, the data suggest that the claimant has moved abroad or in cases where the whole identity is entirely fictitious. If the claimant fails to respond to a letter to his last known address within a reasonable time, powers exist within regulations made under Section 5 of the Social Security Administration Act to suspend the payment of benefit. I do not suppose anyone would argue against of those situations.

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Adjudication officers then make decisions about an individual's entitlement to benefit by applying the law to the facts of each case. Local authorities do the same in relation to housing benefit and council tax benefit. If and when a decision is made by an adjudication officer or a local authority, that individual will be informed of that decision in writing and notified at the same time of his review and appeal rights.
Article 15 and the noble Earl's amendment relate to decisions based solely on the automated processing of data. I have explained that data matching does not involve taking decisions. All it does is identify inconsistencies which may then be subject to further human investigation. As I have said before, we believe that prior to October 1998, when we shall have to implement the directive into domestic law, the Government will have to bring forward the necessary legislation encompassing the whole field of data protection and data use and not just specifically this small corner relating to the Benefits Agency.
Although I hear what the noble Earl says about trying to prevent a future government having to take up the time of both Houses in order to bring forward legislation, I have to say to him that they will have to bring forward legislation. That is the proper place to do it and not in a Bill concerned solely with social security. I hope I have this time managed to explain to the noble Earl how the data matching and any errors thrown up by the data matching will be treated, and I trust I have assured him that there will be no automatic stopping of benefit.
Earl Russell: Before I consider what to do with the amendment, I wonder whether the Minister can tell me why he is not convinced that Article 15 of Directive 95/46 does not apply to social security matters. I was very surprised to hear him say that.
Lord Mackay of Ardbrecknish: I do not know what more I can say. We do not think it necessarily does, but we do not think the problem arises for the reasons I have explained. Equally, as I have explained, we shall have to address all these matters as they affect the whole field of data protection when we come to enact in our domestic law the necessary legislation in order to allow us to fulfil by October 1998 the terms of the directive. I really cannot be plainer than that.
Earl Russell: If the answer comes to the Minister and comes into his mind, I shall be happy to give way to him at any time when he is willing to ask me to do so. I cannot see any reason why he should have that opinion. He says that he does so for the reasons he gave me. That is a little like the letter I quoted last Thursday about the Jobseekers Act, "We have not granted you jobseeker's allowance for the reasons explained in a previous letter", which had not arrived. The point is of some importance, so if any light could be shed on it I would be happy to give way.
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On authorisation, the Minister makes a good and valid point, and I accept it. But in doing that he inadvertently strengthened the case for the amendment. It is right that access to the computer should be restricted to those who have authority and the proper status, but that means that it takes longer to put errors right since the number of those people is limited. That means that the need for restriction on decisions made on potentially erroneous data is rather bigger than it was before.
The Minister says that data matching does not involve decisions. In a very narrow and technical sense, that is true. Yet it is equally true that data matching is presumed to be the cause of decisions. Otherwise there would be no point in all the effort put into the Bill. The risk of erroneous decisions remains. I believe the Minister is receiving some light on this matter. I shall be interested to hear what it is.
Lord Mackay of Ardbrecknish: I thought I had shed more than enough light on this point on Tuesday when I made it clear what the position would be and I explained what data matching was. I said in my original remarks not so much that it did not apply but that it was doubtful whether Article 15 concerns the evaluation of certain personal aspects relating to a person such as his performance. I am afraid that I am now having some trouble with the writing on the notes.
I come back to my main point. This is a much wider matter than simply data matching in the Department of Social Security. We shall have to address the issue in the next Session of Parliament in order to put into domestic legislation before October 1998 the terms of the directive. It seems to me that that is the sensible way to proceed. I do not believe that it is sensible to do a little bit on social security especially when I hear the noble Earl suggesting that even if a doubt is thrown up by data matching somehow or other the adjudication officer will not be able to change a benefit decision because the doubt has been put into his mind by an automatic process. That is trying to say, "Let us not have the modern world or any computers." One of the things they do very quickly and cleverly is throw up information on which one can act in every field of life. I do not quite understand that particular part of the noble Earl's argument.
Article 15 says,
"Member states shall grant the right to every person not to be subject to a decision which produces a legal effect concerning him or which significantly affects him, and which is based solely on automated processes of data intended to evaluate certain personal aspects relating to him such as his performance at work, credit worthiness, reliability and conduct".
That is based solely on automated processing of data. I believe I explained that the way we envisage this working it will not be based solely on the automated data process. It may be based on the automated data process, but it will then have to be taken on board by the people working in the Benefits Agency and, at the end of the day, by the adjudication officer if it comes to a decision on benefit. I believe that I am just repeating what I said on Tuesday. I cannot be any clearer than that.
4 p.m.
Earl Russell: If I understood the Minister correctly, he has just granted the whole substance of this amendment. He said that no decision would be based solely on automated data matching: in other words, it would he checked first before any action was taken. If the Minister said that, I thank him warmly. He has granted me what I was asking and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 4 [Unauthorised disclosure by officials]:
Lord Carter Lord Carter moved Amendment No. 45:
Page 10, line 25, at end insert—
("() At the end of section 123 of that Act insert—
"(11) For the purposes of this section, a "disclosure without lawful authority" includes the circumstances where information is disclosed to a person who is employed in social security administration or adjudication, but where that information is subsequently used by that person for an unauthorised or an unlawful purpose.".").
The noble Lord said: This amendment deals with a very important point which has been drawn to our attention. We are advised that there could be a major flaw in the Bill. It will be interesting to hear the Minister's view. The amendment brings in a new subsection to Section 123 of the Social Security Administration Act 1992. The words of the amendment are:
"For the purposes of this section, a 'disclosure without lawful authority' includes the circumstances where information is disclosed to a person who is employed in social security administration or adjudication, but where that information is subsequently used by that person for an unauthorised or an unlawful purpose".
The implication is that although the disclosure is proper, the use is not.
The purpose of the amendment is to assess whether there is adequate protection from the unauthorised use of personal data by an official who is authorised to use it. The point was raised at Committee stage in another place.
The problem seems to be that the Data Protection Registrar is of the view that there is a loophole in the law but the Government are not of that opinion. They cannot both be right. It is important that the divergence of opinion is resolved. The Government are proposing wider access to sensitive personal data and we are opposed to that. They must be sure of the position should an official abuse that ability to access personal data. The impact of the amendment is to widen the offences in Section 123, which are currently linked to disclosure. The amendment also removes the uncertainty which may surround Section 1 of the Computer Misuse Act 1990.
For example, under the Bill there is increased potential for an estranged partner to pry into the affairs of another, a scenario which can apply to an official who uses access to DSS and tax records in order to locate his former partner or wife who perhaps he has intimidated or beaten up. He might use his access to pry into the financial circumstances of his ex-wife's new lover. In such cases there is no disclosure to a third party. Legitimate access is given to information which results in it being used for another, but improper, purpose. The offences in Section
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123 might not apply because they relate to disclosure of personal information to a third party. That is the basis of the advice we have been given.
The absence of disclosure of information is the key issue in these examples. An official who is authorised to have access to such information may not disclose it but could use it for his own purposes. That is why the amendment deals with circumstances in which the information accessed by an official is used for an unauthorised purpose. Thus it tracks the unauthorised use of the information for the purpose of locating an ex-partner or studying the financial affairs of an ex-partner's new partner.
The amendment sends a clear signal that unauthorised access to, and use of, information as well as disclosure, can lead to prosecution. We are advised to ask the Minister what the impact is of the case of R. v. Brown which reached the House of Lords. The prosecution was overturned on appeal because it was deemed that a police officer had accessed the police national computer to obtain personal information and had used that data.
The Minister may cite the Computer Misuse Act 1990 as a way of getting round the examples I have given. However, I refer him to page 85 of the annual report of the registrar which states,
"It is not clear whether access is 'unauthorised' for the purposes of the Computer Misuse Act where the employee has authority to access data for limited purposes and in fact accesses them for other purposes".
The Data Protection Registrar is saying that the 1990 Act may be insufficient to deal with disclosure. There is the possibility of disciplinary action against an official who accesses information for improper or personal purposes, but we understand that there is no opportunity to take legal action against such an official by prosecution in the courts. If information is used for offensive purposes action should be merited.
Therefore, we are trying to help the Minister by tightening up the provisions on disclosure, and that is why there is access and usage. The Audit Commission's report of March 1995 found that instances of computer hacking in Whitehall had increased by 140 per cent. in 1994. The report went on to say that the majority of the 655 reported incidents involved staff exceeding their authority by using their passwords to try to obtain information on members of the public to disclose to outsiders.
I am not sure whether the Minister is aware of the correspondence between my honourable friend Mr. Harry Cohen, the Minister and the Date Protection Registrar. My honourable friend wrote to Mr. Oliver Heald, the Parliamentary Under-Secretary, on 16th January 1997, on a point raised in Committee.
"I return to a point I raised with you. It relates to offences under the Computer Misuse Act 1990 and the circumstances under which an employee who is authorised to access a computer exceeds his or her level of authorisation. The point I was raising was that the Date Protection Registrar has made a statement in her twelfth annual report which expresses some doubt on the circumstances. You on the other hand are convinced that the 1990 Act is certain. My understanding (from hearsay sources I should add) is that there [have] been cases where the Crown Prosecution Service has failed in the prosecution of these offences, where a case has come to trial before a judge".
Mr. Cohen asked to be reassured that the registrar was mistaken in her concerns. He wrote,
"As you can imagine, if there is any doubt, I would like to see the law amended and the Fraud Bill offers a suitable opportunity in this regard".
A copy of that letter was sent to the Data Protection Registrar. There is an interesting little sidewind on this. Mr. Cohen wrote on 16th January 1997. In all the discussion we have had about information in documentation and computers being wrong, the reply of the Data Protection Registrar was dated 27th January 1996. The typist in the office of the registrar obviously had not realised that the new year had started and put the wrong date on the letter. The interesting point is what would have happened if that letter was filed through the word processor under its date. It would have disappeared into the computer works in the previous year.
In her reply the registrar thanks Mr. Cohen for the copy of the letter and says,
"One of the cases to which you refer is R. v. Victoria Parker (now Bignell) heard before Southwark Crown Court. This has increased my concern that there is a gap in the protection provided by the Data Protection Act 1984 and the Computer Misuse Act 1990. I understand from the CPS that they intend to appeal the point to the Divisional Court".
As I say, that was on 27th January, and I am not sure whether the appeal has yet been heard. She copied her reply to Mr. Heald.
The Minister will agree that this is an extremely important point and that real concern has been expressed by the registrar that the Act could be flawed. This amendment provides the Minister with an opportunity to say who is right and who is wrong. I beg to move.
Earl Russell: Some years ago my wife was visiting the local women's refuge, as she did from time to time, when a call came in from the local police station to one of the women in the refuge. The call was from a policewoman, wishing to check whether the woman in question was actually in the refuge. She was. That sounds a perfectly reputable call, but if you work in a women's refuge you are trained to be extremely wary of disclosure, so somebody asked the woman if she knew anything about the person who was calling her and discovered that the policewoman who was calling happened to be the best friend of the woman's ex-husband from whom she had fled to the refuge. Disclosure to a policewoman is not necessarily unauthorised disclosure; for a policewoman to possess information is not necessarily unauthorised possession of information, but to disclose it to the violent ex-partner is unlawful disclosure.
The whole point of the amendment is that it does not deal with disclosure only; it deals with use. A person may be perfectly authorised to be in possession of information, but not to use it for a particular purpose. After all, every public servant is not only a public servant; he or she is also a person with all the normal human weaknesses, sins, failings and liability to temptation. That point used to be expressed under the doctrine of what lawyers used to call "the king's two
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bodies"—there is the king's public body, which one might describe as the Crown, and the king's personal body, which is the one that gets the toothache. That is perhaps most clearly expressed in the recent case of President Carter's signature. When he was running for office, Mr. Carter was absolutely horrified to discover that not all letters from the President were signed by the President, so he gave an election pledge that he would personally sign all letters from the President. After he had been elected, his staff slowly and painfully succeeded in explaining to him that that task would take him exactly 24 hours a day. In the end, President Carter was persuaded to understand the doctrine of "the king's two bodies". I hope that persuading the Minister to understand it will not be quite so laborious, but the Minister is extremely quick so I do not think that it will be.
The point is to create an offence of unlawful use because without it, there is no protection. The Minister may invoke the Data Protection Act, but the Data Protection Registrar has stated:
"it is not clear whether access is 'unauthorised' for the purposes of the Computer Misuse Act where the employee has authority to access data for limited purposes and in fact accesses them for other purposes".
That is exactly our case. The Data Protection Registrar is not clear that the law is sufficient, and if she is not clear, others might not be clear either.
The Minister in another place gave a whole series of reassurances against disclosure. He gave the assurance that if a battered wife is concerned that a member of staff might let her husband know where she lives, the record could be deemed to be sensitive. The Minister repeated that assurance the other day. That was very welcome, but it does not cover this case because this case is not about disclosing information to the husband; it is about what happens where the authority concerned might actually be the husband. That cannot be covered by any reassurance about disclosure. We need a separate reassurance about use.
In the case of R v. Brown, which reached the House of Lords, whether such use of the police national computer was an offence appeared doubtful and, in effect, the prosecution failed. That indicates a real gap in the law. If the Minister would like to be generous just once on this Bill, this would be a suitable place. It would protect many innocent people and, as far as I can see, it would cost the Government nothing.
4.15 p.m.
Lord Mackay of Ardbrecknish: I hope that I can be generous at least in the assurances that I may be able to give both the noble Lord, Lord Carter, and the noble Earl. A fair number of points arose in the speeches that we have just heard and I shall try to deal with them all although I believe that the noble Earl realises that I answered one of his points the other day on the question of the battered wife. A battered wife could

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indicate that there was a problem, in which case her file would be subject to access only by highly authorised persons. That would give her protection.
Earl Russell: I did thank the Minister warmly for that assurance, but what I have said today is that that is not the same case as that which we seek to cover in this amendment, so that assurance, however welcome, is not to our present purpose.
Lord Mackay of Ardbrecknish: I thought that I should reiterate it. I must have misunderstood the noble Earl's point because I thought that he was raising the question again and I wanted to be sure that the point that I made two days ago was clear.
Section 123 of the Social Security Administration Act makes it an offence for employees of, and contractors to, the Department of Social Security and certain other government departments to disclose personal social security information unlawfully. Clause 4 of this Bill extends that offence to employees of local authorities, and to any contractors or their employees exercising housing benefit or council tax benefit functions. Unauthorised disclosure is an offence which attracts a penalty on conviction on indictment of imprisonment for a maximum term of two years, or a fine, or both.
The department considers unauthorised disclosure of information from departmental records or other information obtained by staff in the course of their official duties to be serious misconduct, and incidents are met with a range of penalties including dismissal. Where work is performed by contractors, strict conditions of confidentiality are included in the relevant contracts; moreover, our contractors, whose business often depends on the confidential processing of personal information for many other clients as well as ourselves, take confidentiality as seriously as we do and their employees are subject to similarly stringent disciplinary procedures.
Local authorities have their own disciplinary procedures, and of course their staff are subject to a general duty of confidentiality. Once this Bill has received Royal Assent, the department will issue a circular to draw local authorities' attention to the new offence.
The amendment seeks to make it an offence to pass on information to a person employed in social security administration or adjudication if that person subsequently uses the information unlawfully or without authority. That seems a little harsh. Indeed, having listened to the noble Lord, Lord Carter, I suspect that that is not what he meant although it is what the amendment would achieve. The amendment would make the supplier his brother's keeper by placing him under a responsibility for the receiver's behaviour. The receiver may, of course, be committing an offence himself under Section 123 of the Social Security Administration Act, for which he could be fined, imprisoned or both; and the offence would occur with retrospective effect. At the time the information was supplied the receiver would have done nothing with it, but the supplier could, by the mere act of supplying
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information in a way which was lawful at the time he did it, become guilty of an offence by the receiver's actions at some undefined point in the future.
As drafted the amendment would make officials of the department responsible for any later lapses in security by local authorities and their contractors, or others to whom they have passed information including the department's own contractors. The effect could be that no information would be passed between for fear of later culpability. Nor is it clear where the chain of culpability would stop: if the end receiver used the information unlawfully or without authorisation, then the supplier would have committed an offence, but what about the person who supplied him? Is he guilty too?
I believe that the noble Lord's amendment is intended to extend the offence to a person who uses information in an unauthorised way without disclosing it to another person. Such a case might hypothetically be one where an official accessed the records of an ex-partner in order to find out his or her whereabouts and then harassed that person. That was the example used. Officials do not have unrestricted access to information held in the department's systems. It is made very clear to them that they may only access information relevant to the work allocated to them, and access to any other information for which prior authority is not given by a senior officer is therefore unauthorised. This guards against staff entering a database and browsing through it, whether or not they then use the information themselves unlawfully or disclose it to another person. In such cases, whether or not the offence in Section 123 of the Social Security Administration Act, which I described earlier, applies, there are other safeguards elsewhere in legislation to ensure that information obtained in the course of an individual's job is not used unlawfully. Browsing is an offence under Section 1 of the Computer Misuse Act 1990, which creates the offence of accessing information without authorisation. A person is guilty of an offence if the access he intends to secure is unauthorised and he knows at the time he accesses the computer that that is the case. Successful prosecutions have been brought for unauthorised access to computers under this offence.
Section 122C(4) gives the Secretary of State power to impose conditions on the use of information supplied by the department to local authorities. We intend to exercise this power to impose requirements which are aimed at ensuring the security of data supplied. However, responsibility for preventing unauthorised access inevitably must remain with each local authority itself.
The noble Lord referred to R. v. Brown which, as I understand it, related to browsing. Browsing is, I suppose, rather like surfing the Internet. Browsing is the viewing of data without using it, disclosing it or even mentioning it to anyone else. In this particular case, on 9th February 1996 the court held that the employee could not be prosecuted under the Data Protection Act for simply browsing computerised personal data without using or disclosing it. I understand that the Home Office has considered the matter very carefully following the Brown decision but, in the light

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of the facts of that case, has concluded that it is not necessary to take any immediate action to make any amendment to the Data Protection Act.
In Brown it was also held that the term "use" in the Data Protection Act, while not wide enough to cover the situation where someone merely called up and viewed computerised personal data, should nevertheless be given its natural meaning. The effect of this is to confirm that if that data is subsequently used for any unauthorised purpose that action is caught by the existing legislation. Brown also confirmed that while unauthorised access was not an offence under the Data Protection Act, the Data Protection Registrar can still take action against the data holder for a breach of the data protection principles. In addition, the Computer Misuse Act continues to be effective against employees or contractors who access computer systems beyond the extent of their authorisation, and the Department of Social Security has brought successful prosecutions on this basis. Moreover, in the case of personal data relating to social security, the offence under Section 123 of the Act would also be relevant. As I believe I suggested earlier, it could easily lead not just to prosecution but to disciplinary action: either downgrading of the person involved or dismissal from the service of the department.
A number of other issues have arisen. The noble Lord, Lord Carter, asked me who was right: the Data Protection Registrar or the Secretary of State.
Lord Carter: Make my day—say that you are wrong!
Lord Mackay of Ardbrecknish: I will not say that at all. What I will say is that it is ultimately for the courts to decide how the law is to be interpreted. It is not for me to decide who is right and who is wrong in this matter. However, if there are difficulties in this area it is for the Home Office to address the point. I underline that my department has relied successfully on the Computer Misuse Act 1990 when dealing with situations of this kind. There have been three successful prosecutions of the department's staff under that Act.
To demonstrate that the department takes this matter very seriously, in 1995/96 it dismissed eight members of staff and 12 others had penalties imposed, including fines, downgrading and written warnings on account of unauthorised access to departmental systems. In addition, two members of staff were dismissed and three others had penalties imposed for the unauthorised disclosure of information. I hope that both the noble Lord and the noble Earl can be assured that we take these matters very seriously indeed. Staff within the department do not have unrestricted access to the information held in its systems. It is made very clear to them that they may only access information that is relevant to the work that is allocated to them. Access to any other information for which prior authority is not given by a senior officer is therefore unauthorised. All staff receive an on-screen warning that accessing departmental data without authority is an offence; in other words, when they enter the system to do whatever they need to do legitimately they receive a warning. We
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provide a wide range of guidance to staff. Indeed, the issue of hacking has recently been drawn to the attention of all staff in a security campaign run by the department.
We take these matters very seriously. If one looks at the three levels of the problem—access, use and disclosure—it is clear that, as to access, the Computer Misuse Act 1990 can be and has been used. We also have the internal disciplinary system within the department. As to the question of use, the Data Protection Act can be applied. We also have the disciplinary procedures within the department. As far as concerns disclosure, use can be made of the Social Security Administration Act and the Data Protection Act. We believe that we have sufficient safeguards.
I said earlier that I believed the amendment of the noble Lord, Lord Carter, did not do exactly what he intended. But I hope that I have dealt with what he is after, explained that we take these matters very seriously and the different levels of protection in our internal disciplinary systems. Further, we have been and are able to use the three Acts that I have mentioned to deal with those who infringe both those enactments and the principles and guidance given to staff in the context of what the department fully accepts is the need to handle other people's data with care.
Baroness Hollis of Heigham: The Minister has been very helpful and clear in dealing with the procedures in place within the DSS, partly because it is a very large organisation with very clear lines of responsibility and detailed forms of management, on the assumption that the work is done in-house. But the problem is perhaps less likely to occur within the department than within local authorities. In local authorities it is not a question of browsing or unauthorised or illegitimate access. One may be dealing with a small local authority that has only a few officers who are handling this material. They will have a right of full legitimate access to that information. For example, the individuals may be housing officers checking against income support records. They realise for the first time that the person on income support is having some top-slicing—it is an issue to which the noble Earl will refer on a later amendment—which suggests arrears of debt and so on, which are unknown to the local authority officers. That is information, legitimately obtained, which he might go on to use illegitimately.
Can the Minister assure us over and above the general reference to local authority good management guidelines, and so on, that that offence would be caught within the Bill at present? Surely we need an amendment such as that moved by my noble friend, or a revised version, to pick up that point. We are not talking about browsing or unauthorised access but legitimate authorised access which gives rise to unauthorised use. In the situation I have described, can the Minister assure us that we do not need this additional protection?
4.30 p.m.
Lord Monkswell: I have followed the debate with interest and it appears that the Minister has given assurances about unauthorised access and unauthorised disclosure. I think that there is probably enough

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protection in terms of the use of information for an unlawful purpose. If it were unlawful, those issues would be caught by some other statute.
However, the concern relates to the unauthorised use of information obtained on an authorised basis. The noble Lord, Lord Russell, mentioned the individual who may have authorised access to the whereabouts of a spouse whom he has mistreated in the past. Perhaps I may suggest another example. A senior official within the housing benefits service runs in his private capacity establishments which have as tenants predominantly people who are in receipt of housing benefit. The information that he would legitimately obtain as a senior housing benefit officer from the computer system would be useful to him in running establishments with predominantly housing benefit tenants. I hope that that officer would not be authorised to use that information that he has legitimately obtained as a senior housing benefit officer in his private capacity. From what the Minister said, there is nothing that renders that use unlawful. That is the crux of this issue.
I accept the intention as described by the noble Lord, Lord Carter. The wording of the amendment may not be quite right. I am not sure that the Minister addressed the kernel of the problem which we addressed with the amendment.
Earl Russell: I think that the Minister tried hard to be helpful. When he said we take these matters seriously, he clearly meant what he said. What I am not quite so certain about is whether the matters that he takes seriously are these matters. The Minister referred to the matter resting on three legs: disclosure; access; and use. He is right. But all the reassurance that he gave related to disclosure and access. Clearly the department is aware of those two risks and is doing everything it can to meet them. But we are dealing with disclosure to a person who is actually authorised to have the information, and access by a person who is allowed to have it.
Let me take some cases which have arisen. They concern the police. In my opinion, the Conservative Party has suffered severely and unjustly from a number of cases where some of its Members in another place have been stopped by the police, questioned but not charged, and the information has found its way on to the front page of the Sun. In those cases, police officers were clearly authorised to have access to the information, but they were not authorised to use it, possibly for their own purposes, and possibly even for their own profit. The noble Baroness reminds me that that may constitute disclosure. But if the policeman writes the piece himself—and I would not be surprised if that has been known—that is not covered; and the provisions do not cover the case where the person uses the information purely for his own personal benefit.
Let us suppose that the information is market sensitive, and the individual acts upon it. He may make a considerable sum of money out of it. In my opinion that is an unauthorised use. I cannot help remembering the words once used in this Chamber by the right
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reverend Prelate the Bishop of Guildford: it is not that we cannot get them to meet our concern; it is that we cannot get them to see that this is our concern.
Lord Mackay of Ardbrecknish: If the noble Earl checks in Hansard, he will see that I ended my summary by talking about access, use and disclosure. I discussed in each case the Act which could be used in a breach. I instanced the fact that the Data Protection Act could be used in the case of unlawful use. I added that the Department of Social Security would take disciplinary steps against the individual. That leads me back one step to the point raised by the noble Lord, Lord Monkswell. The unauthorised use of information obtained lawfully is unauthorised and therefore it is in breach of the Computer Misuse Act. That is the point I make about use; it is a breach of the Computer Misuse Act.
As regards the noble Lord's example, it would be doubtful whether a local authority would give a person such as he instanced the right to access the kind of information we are discussing. However, let us leave that to one side. Even if it did, and the individual had authorisation for access, if he used that information in an unauthorised way, he would be in breach of the Data Protection Act and I suspect that he would not long have his job with the local authority.
The noble Baroness asked me a question about local authorities and, quite rightly, said that some local authorities are quite small and will not have big data bases. That will not allow them to escape from the legislation contained in the Computer Misuse Act or the Data Protection Act. They will clearly be caught by that Act regardless of the size of the data base. The Bill before us provides that information can he supplied only by the Department of Social Security to local authorities, and by one local authority to another, to tackle benefit fraud and for specified benefit administration purposes.
Authorities will be responsible for ensuring that their staff comply with the new law, and with the requirements of the Data Protection Act, and in addition to internal authority controls, authorities' external auditors may become aware of and comment upon any unauthorised use of personal data.
Baroness Hollis of Heigham: Perhaps the Minister will forgive my intervening. It may give time for him to be given the information if he does not have it to hand.
In a small local authority with few officers, a local authority officer has legitimate use of the full file but he proceeds to make use of the information in some private capacity. Can the Minister read out, or tell us, the words of the Data Protection Act which catch the offence of unauthorised use of authorised material?
Lord Mackay of Ardbrecknish: I do not have the Data Protection Act to hand, but I have made it clear that it covers the unauthorised use of information to which the person had authorised access. As I mentioned earlier, we have successfully prosecuted department staff under the Computer Misuse Act.

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I was about to give the noble Baroness the reassurance that Clause 4 makes an offence the unlawful disclosure of personal data by local authority staff, auditors, and local government ombudsmen. Therefore, it makes an offence the unlawful disclosure of personal data by those people, including local authority staff mentioned by the noble Baroness.
To sum up, we believe that in addition to the tight internal controls we have, and what I believe will be the responsible way local authorities will deal with the three issues of access, use and disclosure—we shall be sending out a circular once the Bill receives Royal Assent drawing attention to the new offence in Clause 4—the legislation is in place which will allow the authorities to prosecute anyone who breaches the terms of the Act; that is, through unauthorised access, unauthorised use or unauthorised disclosure. In addition, we will certainly take disciplinary steps against such a person.
Lord Carter: I am sure that the Committee is extremely grateful to the Minister. Perhaps while I ask the Minister a question, advice will reach him on the Data Protection Act. We can see only the provisions which deal with disclosure. We can see nothing which deals with use. Perhaps advice about that will be forthcoming and we can be directed to the relevant part of the Data Protection Act.
If the amendment is incorrectly drafted it can be redrafted, or the Minister can bring back his own amendment if he is prepared to take the point. I am still not convinced, not about authorised access as part of a person's work—that is the proper access of information—but about the unauthorised use of such information. The Minister has not dealt with the concerns of the registrar, which I read to him. Perhaps I may again quote from her letter. It refers not to R. v Brown but to R. v. Victoria Parker, now Bignell. It was heard before Southwark Crown Court. In January, the registrar stated:
"This has increased my concern that there is a gap in the protection provided by the Data Protection Act 1984 and the Computer Misuse Act 1990".
Obviously, the CPS takes the matter seriously enough to appeal the point to the Divisional Court in order to have the law clarified.
The Minister must deal with the issue. It is the job of the Data Protection Registrar to consider such issues. She has expressed real concern that there is a gap in protection and the amendment is intended to deal with that. However, the Minister appears to be saying that the department is entirely happy that there is no such gap. The Minister must say in terms on what grounds the registrar's argument is misconceived.
Perhaps I may give an example. It is not wholly appropriate, but it shows what can happen. I am not sure whether the Committee is aware that banks have what are called "related" or "connected" accounts. At a particular bank in the area where I live, I am involved with a number of accounts both personal and business. I introduced a co-director to that bank. When I ask the bank for a printout
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of the balances on the various accounts I invariably receive one which has his name and his balance in the middle. That is not unauthorised use because the employee of the bank is completely authorised to search the records for that information. I do not know whether he or she is authorised to pass that on to me, but, as the Minister says, he or she cannot be responsible for my behaviour. I might go back to my company and say to the director, "Look, you are heavily overdrawn and I wish that you would do something about that".
I was surprised when I was handed such information, but it is standard procedure in this bank that all accounts which it calls "connected" or "related" are printed out together. Those balances are elicited every day so that the manager can look at them. That is an example of authorised use. I am not sure about disclosure and certainly not the use I might make of the information.
I hope that the Minister has taken on board the point that we are not talking about browsing. We are talking about someone who is authorised as part of his duty to obtain information about taxation, housing benefit, or whatever, who realises that it applies to someone he knows—it could be a former partner, for instance—and who then proceeds to use it.
Is the Minister really happy that that is the case? I know that he has said he is. I do not want to press the amendment to a Division but it relates to an important point. I wish to give the Minister an opportunity to discuss it following this stage of the Bill or to write to me. I hope that if he says he will write he will not merely repeat the argument because I am still not convinced. I do not believe that he has answered the concerns of the registrar.
4.45 p.m.
Lord Mackay of Ardbrecknish: During our little discussion about right or wrong, I indicated that it is ultimately for the courts to decide how the law is interpreted in this dispute, if I may put it as strongly as that, between the Data Protection Registrar and the Secretary of State. We have relied on the Computer Misuse Act quite successfully. As regards the Data Protection Act, perhaps I may refer to Section 5(1) and (2), which creates the duty, and to subsection (3), which clearly applies the duties to the employee. It states:
"A servant or agent of a person to whom subsection (2) above applies shall, as respects personal data held by that person, be subject to the same restrictions on the use, disclosure or transfer of the data as those to which that person is subject under paragraphs (b), (d) and (e)".
The offence is created in subsection (5), which states:
"Any person who contravenes subsection (1) above or knowingly or recklessly contravenes any of the other provisions of this section shall be guilty of an offence.".
We in the department, and that includes the people who run and work the system, are satisfied about the matter. It may be additionally helpful to explain that the report of the Data Protection Registrar on Brown states that your Lordships' House in its judicial capacity,
"also showed concern that the term 'use' should he given its ordinary meaning and not interpreted in a way which would narrow the scope of the Act and make it difficult to fulfil the intention of Parliament. It was for this reason they rejected the argument put forward by Counsel.".

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The noble and learned Lord, Lord Goff, in the judgment said:
"It seems to me that the above reading of the statute (the judgement) accords not only with the natural and ordinary meaning of the word 'use' in its statutory context, but also with the statutory purpose of protecting personal data from improper use.".
In the same vein, the noble and learned Lord, Lord Hoffmann, rejected the argument that the term "data" covers only data held in the memory of the machine with the words:
"It would he strange if the Act was concerned only with what happened unseen in the computer and not with what happened when the information became accessible to the human user. This is not making the tail wag the dog; it is all tail and no dog.".
I realise that these are complex issues and I understand the seriousness of them. However, I hope that the reassurances I have given will at least help the noble Lord to check when he has an opportunity following today's Committee stage. If he has any further reservations, I should certainly be happy to try to resolve them either at a meeting or in writing.
Lord Carter: Just so that we are clear, the Minister was correct to refer to the case of Regina v. Brown which reached the House of Lords. As I said before, in that case the prosecution was overturned on appeal because it was deemed that a police officer who had accessed the Police National Computer to obtain personal information did not use the data. However, I would ask the Minister to comment on the other case that I mentioned. The Minister referred to that specifically. I do not have the details of that case but I presume that the context was different. This is the one about which the Data Protection Registrar said:
"This has increased my concern that there is a gap in the protection provided by the Data Protection Act 1984 and the Computer Misuse Act 1990".
The Minister does not seem to have been briefed on that case. It may be better to return to this matter when the Minister has had the briefing. We may need to have a meeting or return to this matter at a later stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 46 not moved.]
Clause 4 agreed to.
Clause 5 [Overseeing of administration by Secretary of State]:
Baroness Turner of Camden Baroness Turner of Camden moved Amendment No. 47:
Page 10, line 30, at end insert ("with relevant experience").
The noble Baroness said: This is a very important amendment. Its intention is to ensure that anyone appointed to report on the administration of housing and council tax benefits has relevant experience in the administration of those benefits.
It is a probing amendment but I hope that it will provide an opportunity to debate the issue of the importance of relevant experience for members of the fraud inspectorate. I am informed that local authority fraud investigators have had difficulties in the past
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because DSS officials with no specific experience of housing and council tax administration have sometimes sought to impose inappropriate policies on them.
I am told that the best example of that is the failure by DSS officials to recognise the importance of organised landlord fraud because they do not have to deal with landlords as their experience is confined to DSS benefits. Any person appointed to examine the administration of housing and council tax benefit must have a background in the administration of those benefits to ensure that their advice is based on a realistic understanding of the issues and the practical difficulties involved.
I gather that this amendment, or something similar to it, was debated in Committee in another place. At that time the reaction of the Minister was that people with local authority experience would be recruited. But I am told that the local government associations and the Association of Metropolitan Authorities still remain of the view that members of the fraud inspectorate should have experience in the administration of the benefits which they are investigating—that is, housing and council tax benefit. They believe that that requirement should be written onto the face of the Bill.
I emphasise, as we have repeatedly done on this side of the Committee, that everything possible must be done to minimise fraud but the benefit system is intended to provide a safety net for the poor, the disadvantaged and the vulnerable. Therefore, it is very important that we achieve the right balance; and, in particular, it is important that we have in place a system, and people experienced in the administration of the system, to detect and deal with possible landlord fraud. One of the problems which I face in looking at this legislation, while I oppose fraud from wherever it comes and whoever is responsible for it, is that we may well identify people who have inadvertently become involved in what could look like fraud but people who have a much greater stake in organised fraud are able to get away with it much more easily. That is much more likely to be the case unless the people involved with the administration and the inspectorate have experience of the housing benefit and council tax system to which this amendment relates.
I hope that since the matter was debated in the other place, the Government have had an opportunity to reconsider what was suggested in the other place because this seems to me to be a useful amendment. If accepted, it will send out the right signals that we want people who are experienced in these particular benefits. I beg to move.
Lord Mackay of Ardbrecknish: I do not think that there should be any doubt about the Government's commitment in the fight against fraud. I am sure that Members of the Committee noticed that my right honourable friend Peter Lilley, yesterday morning, held a press conference and unveiled a poster on the occasion of the milestone being passed in the various area benefit spotlights of more than £100 million of benefit money being saved by those area spotlights.

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Our commitment is there to be seen. Nobody should doubt that we shall be appointing people who possess relevant experience and qualifications in order to carry out the inspections of local authority benefit administration and anti-fraud performance because we wish to enhance that anti-fraud performance. It would not be in the Secretary of State's interest to do otherwise. I echo the reassurances given by my honourable friend Mr. Alistair Burt in another place.
It is intended that the persons authorised under this clause will be the staff of the new Benefit Fraud Inspectorate. The head of that inspectorate is currently in the process of recruiting staff, and advertisements for two of the senior management posts have appeared already in the national press. In addition, those posts have been advertised both in local government publications and throughout the Civil Service. The intention is to attract public and private sector staff but particularly to target audiences who are likely to have the most appropriate skills and experience for those vital roles.
We can all agree—and I am sure that we do—that the recruitment of high calibre staff is an integral part of ensuring that the inspectorate is effective. That the head of the inspectorate is seeking to recruit such staff is demonstrated clearly in the essential skills and qualities set out in the advertisement. Perhaps it may be useful if I outline briefly the skills and experience considered essential for the inspectorate's staff team. Of course, one person will not necessarily have all the skills but the team collectively will have them all. They are: a knowledge of financial systems; a knowledge of local government administration; a knowledge of the benefits payment system; a knowledge of benefit fraud investigation; a knowledge of audit and management systems; and a knowledge of information technology. That is what we shall be looking for in the staff appointed to the inspectorate.
Therefore, I do not believe that it is necessary to place a statutory obligation on the Secretary of State to ensure that staff recruited to the inspectorate have the appropriate skills and experience. The noble Baroness referred in particular to landlord fraud. We accept that there is landlord fraud as well as all the other kinds of fraud. That will be part and parcel of the skill and experience which we shall be looking for, perhaps under the heading of "benefit fraud investigation". But it is also related to the system of payment of benefit because one way in which the fraud takes place is by the misuse or abuse of the benefits payment system by which we pay out housing benefit.
I hope that I have reassured the noble Baroness, Lady Turner of Camden, that her amendment is unnecessary. I ask her to withdraw the amendment with my assurance in relation to the skills which we believe will have to be present in the whole team when we have completed the appointments.
Lord Monkswell: It strikes me that in the list of qualifying experience to be part of the team, the Minister has not mentioned one area of experience and
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expertise—that is, experience of being a residential landlord. I should have thought that that would bring an expertise to the team in terms of what might be described as poacher turned gamekeeper. That might be quite useful to the team in carrying out its functions in relation to rooting out landlord fraud.
5 p.m.
Lord Mackay of Ardbrechnish: If I had suggested that we recruit a landlord to this, Members of the Committee opposite would have thought that I was being less than serious about the pursuit of landlord fraud.
Baroness Turner of Camden: I thank the Minister for his explanation. Certainly, he has given extensive assurances as to the kind of experience people would be expected to have before they could even be considered for this kind of post. It is very reassuring.
I still fail to see why there is any objection to including this in the Bill and in primary legislation because, if we did so include it, it would send out a very clear signal that we were going to insist upon people having a standard of skill in particular areas of operation that are regarded as important within the context of the Bill. However, I do not intend to press the amendment today. I shall look carefully tomorrow in Hansard at what the Minister has said, but he has given quite extensive assurances and we are very grateful for them.
Baroness Hollis of Heigham: Before my noble friend sits down, I wonder if she is aware that such phrases would actually be extremely valuable. Recently I was shown a report by one of the newly appointed school inspectors under the Government's initiative containing 13 mistakes of spelling, syntax, grammar and comprehension which the head of the English department had corrected before sending it back. This was a school inspector of standard English. I saw the report myself—the comments and corrections. They were entirely correct and valid. It suggests that sometimes people are being appointed by the Government who do not appear to possess the most obvious qualifications required for the exercise of their duties. I wonder if my noble friend agrees.
Baroness Turner of Camden: I wonder whether the Minister would like to respond to that. We are in Committee.
Lord Mackay of Ardbrecknish: We have strayed considerably from the initial point, and I know nothing of the case in point. It sometimes seems that in relation to appointments to this House there does not appear to be the relevant experience in being able to understand my arguments, but perhaps that is a biased position. It would be unusual if the Secretary of State appointed people who did not have some relevant experience for the job they were doing. He would be exposing himself to a fair amount of ridicule and he would be exposing his policy to the risk of failure.
Lord Monkswell: Surely, the Government can accept that this Government have rather a reputation in that

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regard. I seem to remember an advertisement in the national press for someone to run British Rail which said that no previous experience in running a railway was required.
Baroness Hollis of Heigham: Or was desirable.
Baroness Turner of Camden: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Carter Lord Carter moved Amendment No. 48:
Page 10, line 31, leave out from ("administration") to ("their") in line 33 and insert ("of social security benefits and, in particular,").
The noble Lord said: In moving Amendment No. 48 I shall also speak to Amendments Nos. 50 and 60. Amendment No. 48 is intended to ensure that the fraud inspectorate will be able to cover all social security benefits administration. The amendment would allow the formation of an independent fraud inspectorate with a remit to investigate efficiency in the administration of all benefits, not just housing benefit and council tax benefit, but DSS-administered benefits too. There appears to be no justification for confining the power to appoint persons to report on administration to those benefits administered by local authorities only. The implication seems to be that local authorities need to be coerced into fighting fraud but that the record of the DSS, the Benefits Agency and other government departments is above reproach. I apologise to the Minister; this briefing is rather pointed.
In fact, central government's record is far from perfect. For example, the Commons Social Security Select Committee severely criticised the lack of control exercised over the national insurance number system as a major contributor to benefit fraud. Local authorities also have practical experience of cases where they detect housing benefit fraud and the recipient is also implicated in fraudulently obtaining DSS benefits. However, in some cases, when they inform the DSS, the department has been extremely slow to act on the information and stop the fraudulent claim. Perhaps the officers concerned did not have the relevant experience.
Amendment No. 50 requires the fraud inspectorate to publish an annual report. What the report is intended to contain appears in the amendment. The fraud inspectorate would be required to publish reports on at least an annual basis. They would have to contain details of the costs of the inspectorate, of the individual studies carried out, of reports produced, of recommendations made and of the action taken in response to those recommendations. In particular, the amendment would give the inspectorate powers to make general recommendations, including recommendations to the Secretary of State, about how benefits administration could be improved.
As drafted, the Bill requires the fraud inspectorate to report to the Secretary of State on individual local authorities, but there is no requirement for a more general report on its work or for more general recommendations on the administration of benefits. The amendment would give the fraud inspectorate the
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opportunity to give details of its work and to make recommendations on best practice which might be of value to all agencies administering benefits. Crucially, it would also give the inspectorate the opportunity to make recommendations about central government's benefits policy if changes were required to improve efficiency and prevent fraud.
On a number of Bills relating to social security and indeed other fields, such as health and agriculture, over the years, I have proposed amendments asking for reports either on a regular or an annual basis. We always receive the same answer. It would be interesting this time if the Minister were to be able to give some new arguments when he rejects the amendment, if he does reject it.
Amendment No. 60 is to give the Audit Commission powers to conduct studies into the administration of all social security benefits. The amendment would ensure that the powers being given to the Audit Commission to conduct studies cover all social security benefits, not just council tax and housing benefit. It does not seem unreasonable that there should be some independent scrutiny of the DSS administration of the benefits for which it is responsible. We are not entirely clear whether it should be the Audit Commission or the National Audit Office. It will be interesting to hear the Minister's response. The argument is about independent scrutiny. That is the important point.
The amendment also provides an opportunity to ask the Minister to explain why the powers contained in Clause 6 are necessary. What does this clause add to the Audit Commission's existing powers to conduct studies into local government economy, efficiency and effectiveness? Why are specific new powers to look at council tax benefit and housing benefit deemed to be necessary? I beg to move.
Lord Monkswell: I support my noble friend on this amendment. A phrase we hear quite regularly is that one is trying to achieve level playing fields. That is something very pertinent to our culture. Generally speaking, we believe in fairness: it is something very deep in the British psyche.
The amendment tries to ensure that in terms of social security administration and the prevention of fraud we are looking towards a level playing field. We do not want a situation where central government can use, as a stick to beat local government, certain facts and figures. There has been continual criticism of the high levels of voids—unlet domestic property—in council housing stock. However, when one looks at the figures and the information one finds the level of voids in central government housing stock to be far higher than that in the local authority stock.
We should recognise that there will be differences and variations. We should be prepared to learn from the good examples of administration of social security matters under local authority control. That experience, one hopes, can be fed back not only to other local authorities but also to the national scene. The

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amendment of my noble friend not only accords with the British psyche; it will provide long-term benefits for public administration at national and local level.
Lord Mackay of Ardbrecknish: I think I have explained to the noble Lord, Lord Monkswell, that the concept of a level playing field is entirely theoretical. If level playing fields existed, teams would not have to change ends at half time.
Baroness Hollis of Heigham: Has the noble Lord not heard of the sun?
Lord Mackay of Ardbrecknish: I am not entirely sure what the sun has to do with it unless it is the newspaper. As the sun seldom shines—
Baroness Hollis of Heigham: The Minister will surely accept that tennis courts are level but nonetheless people change ends because otherwise one player is playing into the sun?
Lord Mackay of Ardbrecknish: I think that illustrates my point that there is no such thing as a level playing field because players have to change ends. I am not entirely sure why I am being pulled up on my reprimand about the level playing field concept. Everything I say appears to be controversial today.
This group of amendments seeks to broaden the scope of matters which the Benefit Fraud Inspectorate and the Audit Commission would consider, in carrying out their functions under the provisions of this Bill, and to place a requirement upon the inspectorate to report on work undertaken and its effectiveness.
Amendment No. 48 would give the Secretary of State power to authorise persons to consider and report to him on the prevention and detection of fraud in all social security benefits. While I understand the intention behind the amendment, it is absolutely unnecessary because the Secretary of State does not require any additional powers to authorise investigations of social security benefits in general. He already has these powers. Indeed, we have fraud teams that work inside the Benefits Agency. The administration of housing benefit and council tax benefits raises different issues because local authorities are independent of the Secretary of State and have individual approaches to carrying out their obligations to administer benefits. That is why we need the new powers in this clause. That said, generally it will not be sensible to examine the administration of housing benefit in isolation and the inspector's remit will therefore include the interconnection between local authorities and the Benefits Agency. Where any such considerations identify a problem or a solution that has implications throughout the system the Committee may be assured that the appropriate action will be taken.
Amendment No. 60 is similar to the amendment we are discussing in that it would allow the Secretary of State to request the Audit Commission to undertake studies into the administration of all social security benefits, not just housing benefit and council tax benefit.
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This amendment is both inappropriate in principle and unnecessary in practice as it would give the Audit Commission a role in examining the administration of centrally administered benefits which fall outside its remit. The broader constitutional position is that the Comptroller and Auditor General, together with his staff in the National Audit Office, is responsible for external audit in central government. The Audit Commission and its cousin or brother, the Accounts Commission for Scotland, are responsible for external audit in local government and individual health bodies. Amendment No. 60 would cut across these long-established principles.
As I have already explained, the Secretary of State does not require any new powers to authorise investigations of the administration of social security benefits in general. He is able to invite external auditors to examine any part of departmental benefit procedure under current provisions.
Amendment No. 50 would place a statutory duty on persons authorised to carry out inspections under Clause 5 to prepare reports at least once a year on the inspections carried out, the costs involved, the recommendations made and the steps taken in response to those recommendations. The Benefit Fraud Inspectorate will form part of the department and will be accountable to the Secretary of State. It will be a separate unit operating independently from the agencies within the department which have responsibility for administering benefits.
The head of the inspectorate will produce annual accountability reports for the Secretary of State explaining the work the inspectorate has carried out and the running costs, staffing and resources involved. Reports will also contain information of a more technical nature commenting on overall achievements and on points of general interest arising from that year's inspection programme. We do not, however, consider that it would be appropriate for the inspectorate's annual accountability report to contain all the detailed recommendations which have been made in each of the individual inspection reports compiled during the year. There are two main reasons for this. First, the reports are relevant to the individual authority at the time of the inspection. Secondly, authorities will be under no statutory obligation to adopt the detailed recommendations contained in inspection reports.
While it is intended that the head of the Benefit Fraud Inspectorate will make annual reports to the Secretary of State and that generally these will be published, it would be inappropriate for those reports to cover all the subjects suggested in the amendment. It is also worth noting—although I do not think this was the intention—that it appears that the reporting requirement would fall on each individual who was authorised to report. That would be impractical and unwieldy. However, I know that was not the intention of the amendment. I hope that with those explanations of how we believe the system will work and of the quite different role of the Audit Commission and of the National Audit Office, the noble Lord, Lord Carter, will see that the provisions and the powers that the Secretary of State requires are already to hand.
5.15 p.m.
Lord Carter: I am extremely grateful to the Minister for that reply. I think I said that we were not quite sure whether it was a case of the Audit Commission or the National Audit Office. Is it correct that the appropriate parts of the annual accountability report will be published and will be in the public domain but it will be the responsibility of the Secretary of State to decide what is or is not published? That is how I expected the position to be. I shall read with care what the Minister has said but I think he has satisfied our concerns. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 49:
Page 10, line 34, at end insert (", and with compliance with the data protection principles (as set out Schedule I to the Data Protection Act 1984).").
The noble Baroness said: The Secretary of State will authorise people to report to him on local authorities' administration of housing benefit and council tax benefit and their performance in detecting fraud. This amendment would ensure that at the same time they would also report not just on their performance in detecting fraud but also on their observance of the principles of data protection as laid down in the 1984 Act. I am sure the Committee is acquainted with those principles but I shall summarise them briefly.
The principles are as follows. Data will be obtained and processed fairly and lawfully. Data may be held only for lawful purposes which are described in the register entry. Data should be used or disclosed only for those or compatible purposes. Data must be adequate, relevant and not excessive in relation to the purpose for which they are held. Data should be accurate and, where necessary, kept up to date. Data should be held no longer than is necessary for the purpose. Individuals should be allowed to access information held about them and, where appropriate, correct or erase it. Data must be surrounded by proper security.
Asking local authorities, in their report to the Secretary of State on their performance in eradicating fraud, also to report on their observance of the above eight principles is an essential safeguard to ensure that not just the end—eradicating fraud—but also the means—the observance of proper procedures in so doing—is respected. I should like to see local authorities being required to name a specified local authority officer, for example the city solicitor or the electoral registration officer, who has designated responsibility. His or her job would be made more straightforward if he or she not only conformed to those principles but also was guided by what we hope will be in the code of practice. It is essential that a proper balance is maintained between being tough on fraud and respecting the rights of the individual to privacy and confidential handling of sensitive material, for example on issues such as immigration status, cohabitation, financial and health status.
I have no doubt that most local authorities will observe these principles but there is the possibility of abuse, perhaps where an authority is facing a subsidy penalty for not uncovering sufficient fraud and seeks to cut corners. There is also the possibility of abuse where some of this work has been contracted out to private companies which would like to exploit some of the information for commercial gain, perhaps to promote medical insurance or to inform clients of people's credit ratings. We hope that that will not happen but this amendment would construct a local authority mindset that it must observe the ethic of data protection while being vigorous in attacking fraud. The Minister's proposed code of practice, which he conceded in Tuesday's discussions, may cover these points. We should like confirmation from the Minister that that will indeed be the case. If not, we shall obviously want to press him further. I beg to move.
Earl Russell: Ministers do not run well in blinkers. For that reason, I am happy to support the amendment. The Minister may recall—I shall not rehearse it in detail—that I said on Second Reading that getting the Bill right was going to be a matter of observing balance. Whenever one sets an administration to pursue a single objective in isolation, that sense of balance goes. One gets a single-minded blinkered concentration upon a single subject. That way injustice happens. There is nothing new about it. It has always been true.
The Minister knows—or at least he has good cause to know—that the need to report on something tends to concentrate one's mind heavily on that one thing. Whoever is carrying out functions under the Bill will have to report on fraud. As the Bill stands, it risks focusing their minds in a single-minded, obsessive way on fraud. Making them think that what results in the apparent—I stress the word "apparent"—detection of fraud is always good, and that that is the only criterion of good. That way injustices are likely to happen and probably will happen. But if the amendment is accepted, then in the course of reporting upon something else as well, having another priority they wish to satisfy, another thing that is marked as good, they will, as the noble Baroness persuasively put it, have something which influences their mindset in a much more constructive direction. That is a good thing indeed. Good is not a single thing, and the better we appreciate that, the better we shall do it.
Lord Mackay of Ardbrecknish: The amendment seeks to place a statutory requirement upon the Benefit Fraud Inspectorate to monitor local compliance with the Data Protection Act 1984. It merely adds the words of the amendment to the first subsection of Section 139A, which states:
"The Secretary of State may authorise persons to consider and report to him on the administration by authorities of housing benefit and council tax benefit and, in particular, their performance in the prevention and detection of fraud relating to those benefits".
That is why it is called the Benefit Fraud Inspectorate. The amendment would add to its role the duty to look for compliance with the data protection principles as set out in Schedule 1 of the Data Protection Act.

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The protection of individual privacy is an important responsibility of those in charge of local authorities. Quite rightly, each local authority holding relevant personal data is under an obligation to comply with the Data Protection Act. It is the proper role of the Data Protection Registrar to enforce that legislation. It would not be appropriate to usurp the registrar's position by giving a completely unrelated organisation a partial responsibility for policing data protection. To do so could only cause confusion.
The amendment would considerably alter the role of the inspectorate. We envisage the inspectorate as a dedicated unit set up specifically to examine, and report on, the administration of social security benefits. Its staff will be experts on social security matters. To give them other responsibilities, unrelated to the social security system, will inevitably dissipate the impact of the inspectorate and its effectiveness.
Baroness Hollis of Heigham: I am grateful to the Minister for giving way. He said that the inspectorate is being asked to pursue functions unrelated—"unrelated" is the word that he used—to the purposes of whatever system. The point about this is that how that fraud is pursued—that is the data protection issue—is integral to the purposes for which the Bill is being addressed. The Minister has tried to make a separation between means and ends, which we are trying to keep firmly integrated.
Lord Mackay of Ardbrecknish: I do not think it is integration, I think that it is addition. When it is looking at how the local authority may be running its system, the inspectorate may well have to look into the computer systems; but it will be doing so specifically on the basis of checking on how it is running its anti-fraud systems. Priority must be given to reducing the £1 billion of housing benefit fraud. I am sure that that is agreed between us.
If we were to place this additional burden on the inspectorate, then clearly it would have another function placed upon it, and that would add to the cost of running it. This extension of the inspectorate's role would lead to an increase in its running costs. It is hard to justify an additional role and additional expenditure to duplicate functions which are already, under other Acts, the proper responsibility of others.
I do not believe that it would be appropriate to extend the Benefit Fraud Inspectorate's remit in the way suggested. Neither do I believe that such a change would achieve any additional protection of the individual's right to privacy. Indeed, there is a risk that by confusing the responsibilities for those important issues, the amendment will achieve an effect quite the opposite of that intended.
I should point out that under Section 5 of the Local Government and Housing Act 1989 every authority is required to appoint a monitoring officer specifically to deal with contravention of any rule of law, or statutory code of practice, by that authority's members, officers, or employees. The monitoring
458
officer has, in turn, duties to report to the members of the authority who are themselves accountable to their electorate.
If any information comes to light during an inspection which casts doubt upon the legality of an authority's data protection procedures, then that will be reported to the monitoring officer concerned in that specific local authority.
I hope that with that explanation of why I do not believe that that additional burden should be placed on the fraud inspectorate and the explanation of what the fraud inspectorate will do if it comes across an abuse of the Data Protection Act or misuse under the Act, the noble Baroness can withdraw the amendment.
Earl Russell: When the Minister talked about a dedicated unit and about the first priority, he entirely illustrated the ground of my misgivings. There is not a moment's dispute between us that the elimination or substantial reduction of the cost of fraud must be a high priority, but we are always going around in debate—I am sure that I am as guilty as anyone else—saying that this must be the first priority, this is the highest priority, this is the top priority. Priorities, like boxers, cannot all be the greatest. Priorities have to jostle with one another. Among priorities, just as much as in the market, there is a great deal of health in competition. The Minister is proposing here to set up a priority which is immune to competition. That is indeed dedication. It is the voice of the heresy hunter; it frightens me.
Baroness Hollis of Heigham: I wonder whether the Minister can help me with a question. When moving the amendment, I asked whether such matters will be covered by the code of practice which was granted, so to speak, by the Minister in reply to amendments we moved at the beginning of Tuesday's debate. Will the inspectors of the fraud squad, so to speak, monitor the compliance of local authorities with that code of practice, and will that code of practice embody the concerns that I have raised?
Lord Mackay of Ardbrecknish: We are a little confused about the role of inspectors and the code of practice which we discussed at the beginning of Tuesday, which was put in as part of the data protection measures, and is designed to ensure that the people who are doing the data matching and running the systems, comply with the provisions of Acts such as the Data Protection Act. That is what that code of practice is about.
If the inspectorate sees something that infringes the Act or indeed the code it will report that to the monitoring officer of the local authority, whose responsibility and duty it is to deal with these issues. That will be the clear line of reporting of any matter that the fraud inspectorate comes across. To add to its role and make it police the Data Protection Act as well is simply not sensible. The policeman for the Data Protection Act, and indeed other statutes, is the monitoring officer employed by the authority.
5.30 p.m.
Baroness Hollis of Heigham: I am rather disappointed by that reply. After all, the code of practice is the DSS code of practice, not that of the registrar. It is not unreasonable therefore that when government fraud inspectors investigate the performance of the local authority, they should also assess and review that same local authority's observance of the code.
The Minister persists in thinking that data protection on the one hand and pursuance of fraud on the other are two parallel responsibilities which do not meet, and to layer the one on to the other is to produce an additional role, responsibility and expense. That is profoundly to misunderstand the issue. Data protection is about how it is done. Dealing with fraud is what is being attempted.
The amendment tries to ensure that in the process of pursuing fraud—a matter on which we are entirely at one—nobody cuts corners by failing to comply with the principles of data protection. Therefore an inspectorate that is concerned, which is pressing and possibly harassing and hounding a local authority to meet its fraud targets, should at the same time be required to hold in consideration that in so doing the local authority must conform to the principles which I hope will be laid down in the code of practice and are certainly laid down in the Data Protection Act 1984. If not, there is a danger that corners will be cut and that, in the pursuit of fraud, with the inspectorate at their back, the local authorities will not comply as they should because there will not be an equivalent weight of consideration.
I am very disappointed by the Minister's reply. I wish to test the opinion of the Committee.
5.32 p.m.
On Question, Whether the said amendment (No. 49) shall be agreed to?
Their Lordships divided: Contents, 54; Not-Contents, 138.

Division No. 1

CONTENTS

Addington, L.

Graham of Edmonton, L.

Alderdice, L.

Grey, E.

Beaumont of Whitley, L.

Harris of Greenwich, L. [Teller.]

Borrie, L.

Haskel, L.

Broadbridge, L.

Hollis of Heigham, B.

Bruce of Donington, L.

Hughes, L.

Carlisle, E.

Jeger, B.

Carter, L.

Judd, L.

Clancarty, E.

Kilbracken, L.

Cocks of Hartcliffe, L.

Lester of Herne Hill, L.

Currie of Marylebone, L.

Longford, E.

David, B.

Lovell-Davis, L.

Dormand of Easington, L.

McIntosh of Haringey, L.

Dubs, L.

McNair, L.

Eatwell, L.

McNally, L.

Falkland, V.

Mar and Kellie, E.

Fisher of Rednal, B.

Monkswell, L.

Geraint, L.

Morris of Castle Morris, L.

Gould of Potternewton, B.

Ponsonby of Shulbrede, L.

[Teller]

Prys-Davies, L.

460

Redesdale, L.

Thurso, V.

Rodgers of Quarry Bank, L.

Tordoff, L.

Russell E

Turner of Camden, B.

Serota, B.

Wallace of Coslany, L.

Whitty, L.

Shepherd, L.

Williams of Crosby, B.

Stoddart of Swindon, L.

Williams of Elvel, L.

Thomson of Monifieth, L.

Winston, L.

NOT-CONTENTS

Acton, L.

Holderness, L.

Ailsa, M.

HolmPatrick, L.

Aldington, L.

Hooper, B.

Alexander of Tunis, E.

Howe, E.

Allenby of Megiddo, V.

Howe of Aberavon, L.

Ampthill, L.

Hylton-Foster, B.

Anelay of St. Johns, B.

Inglewood, L.

Annaly, L.

Kenilworth, L.

Ashbourne, L.

Kingsland, L.

Astor of Hever, L.

Kinnoull, E.

Balfour, E

Kintore, E.

Barber of Tewkesbury, L.

Lauderdale, E.

Belhaven and Stenton, L.

Lindsay, E.

Berners, B.

Liverpool, E.

Biddulph, L.

Long, V.

Blaker, L.

Lucas, L.

Blatch, B.

Lucas of Chilworth, L.

Boardman, L.

Luke, L.

Boyd-Carpenter, L.

Lyell, L.

Brabazon of Tara, L.

McColl of Dulwich, L.

Brentford, V.

Mackay of Ardbrecknish, L.

Bridgeman, V.

Mackay of Clashfem, L.

Brigstocke, B.

[Lord Chancellor.]

Brookes, L.

Mackay of Drumadoon, L.

Brougham and Vaux, L.

Macleod of Borve, B.

Butterworth, L.

Marlesford, L.

Cadman, L.

Massereene and Ferrard, V.

Campbell of Alloway, L.

Merrivale, L.

Campbell of Croy, L.

Mersey, V.

Carnock, L.

Miller of Hendon, B.

Chelmsford, V.

Milverton, L.

Chesham, L. [Teller.]

Monckton of Brenchley, V.

Clanwilliam, E.

Monk Bretton, L.

Clark of Kempston, L.

Mottistone, L.

Coleridge, L.

Mountevans, L.

Courtown, E.

Mowbray and Stouiton, L.

Craigavon, V.

Munster, E.

Cranborne, V. [Lord Privy Seal.]

Murton of Lindisfarne, L.

Crathome, L.

Nelson, E.

Crickhowell, L.

O'Cathain, B.

Cross, V.

Oppenheim-Barnes, B.

Cumberlege, B.

Orr-Ewing, L.

Davidson, V.

Oxfuird, V.

Denbigh, E.

Park of Monmouth, B.

Denton of Wakefield, B.

Pike, B.

Dixon-Smith, L.

Pilkington of Oxenford, L.

Downshire, M.

Platt of Writtle, B.

Dundee, E.

Quinton, L.

Eden of Winton, L.

Rankeillour, L.

Elibank, L.

Rees, L.

Ellenborough, L.

Rennell, L.

Elliott of Morpeth, L.

Renton, L.

Elton, L.

Renwick, L.

Feldman, L.

Saint Albans, D.

Flather, B.

St. John of Fawsley, L.

Forbes, L.

Saltoun of Abernethy, Ly.

Gibson-Watt, L.

Shaw of Northstead, L.

Gisborough, L.

Skelmersdale, L.

Goschen, V.

Soulsby of Swaffham Prior, L.

Gray, L.

Stewartby, L.

Harding of Petherton, L.

Stodart of Leaston, L.

Harris of Peckham, L.

Strange, B.

Harrowby, E.

Strathclyde, L. [Teller.]

Hayhoe, L.

Swinfen, L.

Henley, L.

Taylor of Warwick, L.

461

Teynham, L.

Vivian, L.

Thomas of Gwydir, L.

Willoughby de Broke, L.

Wise, L.

Trumpington, B.

Wynford, L.

Ullswater, V.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.
5.41 p.m.
[Amendment No. 50 not moved.]
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 51:
Page 11, line 40, at end insert—
("(3) Any report which relates to an obligation to satisfy the requirements of any of the data protection principles (as set out in Schedule 1 to the Data Protection Act 1984) shall be sent to the Data Protection Registrar within three months of its delivery to the Secretary of State.—).
The noble Baroness said: Amendment No. 51 proposes that the report to the Secretary of State should, within three months, also be sent to the Data Protection Registrar as she is the custodian of civil liberties in respect of privacy, appointed by Parliament to undertake that function on our behalf. Her work will be greatly extended as a result of the Bill, monitoring a much more extensive and complicated set of information transactions between the DSS and the Inland Revenue, between Customs and Excise and the Inland Revenue via the DSS to local authorities.
We are obviously pleased that the registrar will be expecting data matching bodies to conform to the DSS code of practice. Could we ask the Minister what additional staff the Data Protection Registrar will have in the light of the additional responsibilities placed on her under the Bill? Am I right in thinking that the Home Office has cut the grant in aid to her office? Can we hope that the Minister will support what is, after all, a modest amendment but will lock the Data Protection Registrar into the system? As the Minister said on the previous amendment, she is the protector of these concerns. I beg to move.
Lord Mackay of Ardbrecknish: This amendment is similar to the last one, but in this case it places a statutory requirement upon the Benefit Fraud Inspectorate to send to the Data Protection Registrar reports on the local authorities' compliance with the Data Protection Act 1984.
For the reasons I outlined a short time ago, we do not believe that the Benefit Fraud Inspectorate ought to be asked to monitor compliance with the Data Protection Act. The proper place for that role is with the Data Protection Registrar. This amendment would considerably alter the role of the inspectorate, as would the previous one, and I believe that widening its scope would reduce concentration on its main task, which is housing benefit and council tax benefit fraud. It would also increase the running costs.
There is little difference between this amendment and the last one relating to the fraud inspectorate. Any authorised persons conducting an inspection on
462
behalf of the Secretary of State will, of course, need to be aware of the legal context within which local authorities work. That will include the legislation relating to data protection. It will also include responsibilities relating to the employment of the health and safety laws. The noble Baroness is not yet asking that the fraud inspectorate monitor these Acts as well, but the inspectorate would have to be aware of the Acts, particularly the Data Protection Act. The inspectorate will not be able to ask local authorities to ride roughshod over the Data Protection Act, as the noble Baroness seems to think, in order to meet some fraud objectives.
Any concerns about possible breaches of data protection legislation encountered by the inspectorate will, as I have already explained, be reported to the chief officers within the local authority. It is the clear legal responsibility of those officers to comply with the Act. They are accountable for procedures in the local authority and it would be wrong to dilute that by placing a statutory responsibility on the inspectorate. The Data Protection Registrar gives advice to local authorities on issues concerning data protection.
To reiterate, it would not be appropriate to extend the Benefit Fraud Inspectorate's remit in the way suggested by the amendment. Nor do we believe that the amendment would offer any additional safeguard to an individual's personal privacy.
I hope that the noble Baroness will withdraw her amendment, but if she wishes to go to a vote, I am sure that my noble friends will support me in the Lobby.
Baroness Hollis of Heigham: I do not know why the Minister should be so certain, perhaps he should ask his noble friends. Is that not the appropriate etiquette on these occasions? I am baffled by part of what the Minister said—no doubt it is my fault. He said that the inspectorate was not responsible for ensuring health and safety either. That was the job of the Health and Safety Executive. Can the Minister explain to me what on earth that analogy has to do with the matters under discussion?
The point about this amendment as well as the previous one is that data protection principles ensure the propriety of the path trodden to get to the point of eradicating fraud. We are talking about data matching. That is how, to some degree, the fraud will be determined and made transparent and therefore pursued. Will the Minister tell us where he gets the analogy of the Health and Safety Executive? I do not understand it.
Lord Mackay of Ardbrecknish: I was pointing out that there are other pieces of legislation which control matters within local government. We would not expect the fraud inspectorate to be on the lookout for those, any more than we would expect those responsible for that legislation to monitor the Data Protection Act. If the noble Baroness does not like the example, then I withdraw it. But my argument stands in relation to the Data Protection Act.
I am clear as to what the fraud inspectorate's task is. If the noble Baroness wishes to dilute it, that is her concern. I do not. I believe that the proper procedures

463
are in place with regard to the Data Protection Act. I do not think that it is necessary to add data protection duties to the activities of the fraud inspectorate.
Baroness Hollis of Heigham: It is clear that the Minister accepts the ineptitude of the analogy. The fraud inspectors will no more look into health and safety than they will look into equal opportunities, responsibilities on race relations, environmental assessments or anything else. The point about data protection is that in the pursuit of fraud one will handle sensitive material and, therefore, it should be handled in ways that conform to principles of data protection. It is about how you get there. That is why it is integral and the Minister knows that the cross-reference to health and safety was absurd.
Lord Mackay of Ardbrecknish: I did not wish to go back to the analogy, I was trying not to waste the Committee's time by continuing it. Of course, health and safety are concerned with the way the staff work. The point is that when it comes to the employment of fraud staff, health and safety issues are relevant when they relate to what people do and how they carry out their work.
If one were making the kind of argument put forward by the noble Baroness, one would say: "While they are at it, they had better check that what the staff are doing in their fraud work is consistent with health and safety issues". I said and remain of the opinion that there are proper bodies to do that, just as there are proper bodies to look after data.
Baroness Hollis of Heigham: That is an absurd analogy but we could argue about it afterwards. I do not understand where the Minister is coming from on this. He refuses to accept that we are talking about the methodology, how one gets from point A to point B so that the means do not subvert the end or the end does not subvert the means. I am very dissatisfied with the Minister's response and would like to seek the opinion of the Committee.
5.49 p.m.
On Question, Whether the said amendment (No. 51) shall be agreed to?
Their Lordships divided: Contents, 48; Not-Contents, 127.

Division No. 2

CONTENTS

Addington, L.

Eatwell, L.

Alderdice, L.

Elis-Thomas, L.

Beaumont of Whitley, L.

Fisher of Rednal, B.

Borrie, L.

Gould of Potternewton, B.

Broadbridge, L.

[Teller.]

Carlisle, E.

Graham of Edmonton, L. [Teller.]

Carter, L.

Grey, E.

Clancarty, E.

Harris of Greenwich, L.

Cocks of Hartclilfe, L.

Haskel, L.

David, B.

Hollis of Heigham, B.

Dormand of Easington, L.

Hughes, L.

Dubs, L.

Jay of Paddington, B.

464

Kilbracken, L.

Rodgers of Quarry Bank, L.

Lester of Herne Hill, L.

Russell, E.

McIntosh of Haringey, L.

Serota, B.

McNair, L

Stoddart of Swindon, L.

McNally L

Thomson of Monifieth, L.

Mar and Kellie, E.

Thurso, V.

Meston, L.

Tordoff, L.

Monkswell, L.

Turner of Camden, B.

Wallace of Coslany, L.

Morris of Castle Morris, L.

Whitty, L

Ponsonby of Shulbrede, L.

Williams of Crosby, B.

Prys-Davies, L.

Williams of Elvel, L.

Redesdale, L.

Winston, L.

NOT-CONTENTS

Acton, L.

Holderness, L.

Ailsa, M.

HolmPatrick, L.

Alexander of Tunis, E.

Howe, E.

Ampthill, L.

Howe of Aberavon, L.

Anelay of St. Johns, B.

Hylton-Foster, B.

Annaly, L.

Inglewood, L.

Ashbourne, L.

Jeffreys, L.

Astor of Hever, L.

Kenilworth, L.

Attlee, E.

Kingsland, L.

Balfour, E.

Kinnoull, E.

Belhaven and Stenton, L.

Kintore, E.

Belstead, L.

Lauderdale, E.

Berners, B.

Lindsay, E.

Bethell, L.

Liverpool, E.

Biddulph, L.

Long, V.

Blaker, L.

Lucas, L.

Blatch, B.

Lucas of Chilworth, L.

Boardman, L.

Luke, L.

Boyd-Carpenter, L.

Lyell, L.

Brabazon of Tara, L.

McColl of Dulwich, L.

Bridgeman, V.

Mackay of Ardbrecknish, L.

Brigstocke, B.

Mackay of Clashfern, L.

Brookes, L.

[Lord Chancellor.]

Brougham and Vaux, L.

Mackay of Drumadoon, L.

Cadman, L.

Macleod of Borve, B.

Campbell of Alloway, L.

Marlesford, L.

Campbell of Croy, L.

Massereene and Ferrard, V.

Carnock, L.

Merrivale, L.

Chelmsford, V.

Mersey, V.

Chesham, L. [Teller.]

Miller of Hendon, B.

Clanwilliam, E.

Milverton, L.

Clark of Kempston, L.

Monckton of Brenchley, V.

Coleridge, L.

Mottistone, L.

Courtown, E.

Mountevans, L.

Craigavon, V.

Mowbray and Stourton, L.

Cranborne, V. [Lord Privy Seal.]

Munster, E.

Crickhowell, L.

Murton of Lindisfarne, L.

Cross, V.

Nelson, E.

Cumberlege, B.

O'Cathain, B.

Davidson, V.

Oppenheim-Barnes, B.

Denbigh, E.

Oxfuird, V.

Denton of Wakefield, B.

Park of Monmouth, B.

Dixon-Smith, L.

Pilkington of Oxenford, L.

Downshire, M.

Platt of Writtle, B.

Eden of Winton, L.

Quinton, L.

Elibank, L.

Rankeillour, L.

Elliott of Morpeth, L.

Rees, L.

Elton, L.

Rennell, L.

Feldman, L.

Renton, L.

Flather, B.

Renwick, L.

Forbes, L.

Saint Albans, D.

Gisborough, L.

SL John of Fawsley, L.

Goschen, V.

Shaw of Northstead, L.

Gray, L.

Skelmersdale, L.

Haddington, E.

Stewartby, L.

Harding of Petherton, L.

Stodart of Leaston, L.

Harris of Peckham, L.

Strange, B.

Harrowby, E.

Strathclyde, L. [Teller.]

Hayhoe, L.

Taylor of Warwick, L.

Henley, L.

Thomas of Gwydir, L.

465

Trumpington, B.

Wharton, B.

Ullswater, V.

Willoughby de Broke, L.

Vinson, L.

Wise, L.

Vivian, L.

Wynford, L.

Resolved in the negative, and amendment disagreed to accordingly.
5.57 p.m.
Lord Carter Lord Carter moved Amendment No. 52:
Page 11, line 40, at end insert—
("(3) Any authority sent a report by the Secretary of State under subsection (2) above may, within 28 days of receiving the report, make such representations to the Secretary of State about the content of the report as it considers appropriate.
(4) In considering any further action as a result of a report made under this section the Secretary of State shall have regard to any representations made by an authority under subsection (3) above.").
The noble Lord said: This amendment is designed to allow local authorities to respond to reports on social security administration. We are advised on this matter by the Association of District Councils, the Association of London Government and the Association of Metropolitan Authorities who believe that there is a serious point here and that the Bill requires amendment.
The amendment would give a right of reply to an authority which has had a report made against it under Clause 5. The intention is to give an authority in that case an opportunity to make comments about such issues as the accuracy of the statements in the report and the methodology used. It would also—which is extremely important—give the authority the opportunity to explain the reasons for any failings identified in the context of its own financial position, the level of subsidy received from the Government and the overall impact of the Government's benefits policy.
As drafted the Bill establishes a system which allows an adverse report to be made against an authority under Clause 5 which could then be used as the basis of a direction from the Secretary of State under Clause 8, the compulsory contracting out of benefits administration under Clause 9, and the deduction of subsidy under Clause 10. Although an authority will have an opportunity to submit proposals for improving its performance and remedying any failings identified in the report and prior to receiving a direction under Clause 8 there will be no statutory right of reply for the authority before that stage. That means that there is no requirement on the Secretary of State to consider an authority's representations before moving on to the next stage of making a direction or deducting a subsidy.
The amendment was moved in Committee in another place where the Minister argued that it was unnecessary because it would largely pre-empt the provisions already made in Clause 8. But the purpose of the amendment is precisely intended to pre-empt the provisions in Clause 8 because that is the clause which deals with directions by the Secretary of State. We feel that local authorities should have an opportunity to make comments on adverse reports against them and that the Secretary of State should be required to consider those representations before moving on to consider taking action against a local authority. In some cases, criticisms
466
of poor performance may not be well founded or the poor performance may be caused by insufficient government subsidy for administration costs or by inappropriate policies which are pursued by the DSS. We know that central government subsidy now covers only two-thirds of actual benefit administration costs and in individual authorities the proportion will be much lower. In this context lack of central government support to a particular authority may be the principal reason for its failure to perform adequately. The authority should have the opportunity to make such points and the Secretary of State should be under an obligation to take them into account before considering the making of directions under Clause 8.
We think there is an injustice here. We do not think the local authorities will have the chance to respond before the Secretary of State makes directions under Clause 8. It would considerably add to the justice of the Bill if the Minister were minded to accept the amendment. I beg to move.
6 p.m.
Earl Russell: I am very happy to support the amendment. When one thinks of amendments in one's own mind one tends to use a shorthand. One identifies them by a single word with which one associates them. I am sure the noble Lord, Lord Carter, will understand why I have identified this as the Calderdale amendment. We have here another case of a report on which the local authority wishes to make comments. It is in the Government's interest to allow these comments before any action is taken and to institutionalise the procedure for them.
We have here a procedure which may end up in a deduction of subsidy or in another penalty. We have in effect an exercise of administrative power. All such excises of power, by a provision which is many centuries old in English law, are liable to review by the judges in court. The noble Lord, Lord Lucas, who, I am happy to see, is now in his place, will, I am sure, recall a very interesting discussion we had to which I referred the other day about the extent to which the drafting of legislation may tend to increase the number of judicial reviews. If there is no restriction on the powers of authority in the wording of the legislation, then, literally as a kind of court of last resort, the powers of judicial review come into operation. If this amendment is not accepted, the powers of judicial review will be the first port of call for controlling the Secretary of State's exercise of power. If it is accepted, then there will be what I am sure the Government will find more satisfactory—a statutory check on the exercise of power. Power can be checked according to the expressed will of Parliament. There are advantages in that if Parliament will express the requisite will. But it can only do so, so far as I can see, by accepting the amendment.
One of the ways in which the local authority might well wish to express the view that it had been unfairly dealt with is by making reference to its financial position. Local authorities very frequently believe, and very frequently correctly believe, that poor performance is the result of inadequate financial support. There is a certain amount of support from central government but

467
central government subsidies now cover only two-thirds of actual benefit administration. Because of the very complex way the formula for local authority support works, in individual authorities it may be very much lower. In those cases in particular, they may have a very strong case indeed for wanting to make representations. Those are two strong points in favour of the amendment. I am happy to support it.
Lord Mackay of Ardbrecknish: The amendment would require the Secretary of State to allow local authorities a certain period in which to make representations to him on the content of inspection reports. The amendment largely pre-empts the provisions already made in Clause 8 of the Bill. I do not believe that it is necessary to pre-empt the provisions of Clause 8.
The proposed procedure of inspection, reports and directions was designed to be fair to local authorities. It may be helpful if I outline them briefly. Following receipt of an inspection report, the Secretary of State will first ensure that the report is copied to the local authority concerned. This will happen in all cases, even where the performance of the authority is exemplary. It is unnecessary in such cases to make provision for the authority to respond to the report as this amendment does. Indeed, to do so would create an unnecessary layer of bureaucracy.
In a case where the Secretary of State believes that action may prove necessary, he will be required, before taking any action, to invite the local authority to consider the report and to submit its proposals to improve performance and remedy any failings identified. The Secretary of State must then consider any response, along with the report, before making any directions to the local authority.
So the provisions in Clause 8 already ensure that the authority concerned will have the opportunity to consider and respond to the report before directions are issued. Clearly, where an authority disagrees with the accuracy of the report or wishes to challenge the findings, it will be free to comment accordingly. Where the authority considers that any recommendations are inappropriate it will be able to state the reasons why.
The Secretary of State's power to issue a direction is permissive precisely to allow for circumstances where it would not be appropriate to make or even consider making a direction. Where the authority has raised compelling arguments against doing so, the Secretary of State must take these into account. It may not be the intention, but the amendment as drafted appears to introduce an additional stage in the process. To require an additional period of 28 days for comment prior to inviting the authority's proposals would only prolong the process and make it unduly bureaucratic.
The amount of time allowed for an authority to respond to a report must be flexible. Given the wide differences in local authority performance and the variations in caseloads between different authorities, it would not be appropriate to lay down a mandatory response time. It is precisely in order to maintain fairness that we need to be able to adjust to the particular
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circumstances of each individual authority when setting deadlines for action. In general we do not anticipate that an authority would be expected to respond in less than 28 days. There may, however, be occasions when swift action is necessary, while in other cases longer periods would be justified.
Clause 8 already makes adequate provision for a local authority to respond. With that explanation of how we believe the procedure of inspection, report and direction will work, I hope the noble Lord will feel able to withdraw the amendment.
Lord Carter: That was a very helpful response but perhaps I may put a point to the Minister. He said that the amendment would require the local authority to respond even when there was no reason to criticise its performance. I suppose that it could always write back to say, "Thank you". The intention of the amendment is to give an authority the opportunity to make comments about such issues as the accuracy of the statement in the report and the methodology used. If we go along with the Minister's argument and say that this is not required, will the local authority be allowed to make such comments when it submits its proposals in response to the report? When it submits its proposals for putting right whatever may be wrong, will it be allowed to say, "Yes, we understand what we have to do but we would like to point out that the reason for the problem is the inefficiency of the department"?
Lord Mackay of Ardbrecknish: Yes. I think I indicated that where the authority disagrees with the accuracy of the report or wishes to challenge the findings it will be free to comment accordingly. It can make some of those comments before it even comes back to the things it might do if it wishes to challenge points of fact, if I may call them that, or the accuracy of the report. It can do that. That is why I think a little flexibility is required.
Lord Carter: I was referring not just to accuracy. I was also thinking of more subjective opinions where the authority might feel that the problem had arisen because of wrong action on the part of the DSS. I do not wish to press the amendment to a Division. I shall read with care what the Minister said. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 5 agreed to.
Baroness Turner of Camden Baroness Turner of Camden moved Amendment No. 53:
After Clause 5, insert the following new clause—
CHANGE OF CIRCUMSTANCES: REVIEW OF AWARD
(" . In section 5(1) of the Social Security Administration Act 1992 (regulations about claims for and payment of benefit) at end of paragraph (j) insert" and for requiring a review of the award and an award to be made within fourteen days of receipt of notice of any change of circumstances;".").
The noble Baroness said: The purpose of this amendment is to ensure that changes of circumstances are processed within 14 days of the notification of that change. As we know, people have a duty to inform the

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authorities of a change of circumstances, but, unlike the initial claim in housing benefit cases, there is no timescale within which the local council should process that change. As a result, when a claim is eventually processed, recipients may find themselves faced with considerable under or overpayment and local authorities will then have to seek to put the matter right.
We have to remind ourselves when dealing with the benefit system that we are dealing with people who are by definition very poor and often disadvantaged and who live, as it were, very close to the edge. That means that any underpayment may be a matter of grave penury. Alternatively, if through no fault of their own, having made the notification of change of circumstances, nothing happens and suddenly they are asked to make up the underpayment, that may be a considerable embarrassment and the person concerned may not have the money available.
I do not think that it is too much to expect that a change of circumstances should be processed within 14 days. If we do not have that kind of timescale laid down in legislation, we may very well find that people are subjected to disadvantage which should not be there at all. I beg to move.
Earl Russell: This is rather an important amendment. The Minister and the noble Lord, Lord Lucas, may remember a number of exchanges that we had on the housing Bill where we were in danger for a while of passing like ships in the night. The noble Baroness, Lady Hollis, and I and many others, were asserting that many people were made to wait for many months before getting housing benefit. The Minister gave a whole series of statistics showing that very few people had to wait beyond a fortnight. It was only after very lengthy debate that it emerged that we were measuring two different things. Those of us speaking on this side of the House were measuring the length of time from when people put in the initial application for housing benefit or notifying the change of circumstances from which a claim arose. Ministers were measuring the time of a fortnight, on which there is a statutory check, from when the local authority got all the information on board. The clock does not start ticking for a local authority until all the information has been gathered in.
There have been local authorities—I think of the London boroughs of Lambeth and Brent in the bad old days before reforms began—which used to leave things for many months before they even began to ask for the information needed. In fact, I believe that the London Borough of Lambeth—I would not swear to the recollection now—once discovered a number of sacks containing applications for housing benefit, which had been left lying in a corner of an office for as long as six months.
The point that the noble Baroness, Lady Turner of Camden, made about people living near to the edge is very applicable indeed in that situation. If people have received overpayment through no fault of their own and they are then asked to repay an enormous sum all at once, even if the money is legally due, repaying it may be very difficult indeed.
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Some of us may have received bills from the Inland Revenue for several thousand pounds at a time for back tax which the Revenue has suddenly discovered is due, although in possession of all the information. That sort of thing can cause us, in much more comfortable circumstances, a considerable amount of dismay. If it can cause that to us, then how much more it must cause dismay to people who are really right on the edge and who may be refused the chance to cash a cheque because of an overdraft of £5?
At that sort of level, delay is very serious. So we need some recognition of the fact that the local authority clock ought to start ticking a bit faster. It is like not starting the stopwatch for the Olympic mile—or the 1500 metres, I should say, these days—until the runners are past the first 800 metres. That does not give a very accurate reading. This may not be exactly the right thing to do about it, but something must be done about the problem. People are suffering quite badly because nothing has been done yet.
6.15 p.m.
Lord Mackay of Ardbrecknish: The effect of this amendment would be to provide a power to make regulations to guarantee that notifications of changes of circumstances relating to the majority of benefits administered by my department and local authorities would automatically trigger a review which would have to be dealt with and a decision made within 14 days.
If regulations such as the amendment suggested were made, they could not provide for any exception to the 14-day time period. The amendment is needlessly restrictive. For practical reasons there is a need for exceptions to a 14-day general rule.
Decisions on benefit entitlement by adjudicating authorities are made on the information available to them and deciding the facts on the balance of probabilities. If the officer does not have sufficient information in order to make an accurate determination, he must properly seek more information, otherwise the claimant may be underpaid or overpaid. Proper determinations may not be possible within 14 days if further information has to be obtained either from the claimant or a third party.
For example, the claimant may notify that he has started part-time self employment but say that the business is not yet making any money. The adjudicating authority must arrange further inquiries on the nature of the business and estimated income and expenses before being able to decide whether benefit should be adjusted. A 14-day rule would place a requirement on the claimant to provide information to a very tight, if not impossible, deadline. Failure to provide the information may result in a decision which is to his disadvantage. Under present arrangements, the claimant is allowed up to a month to provide the information and that period runs from the date he was asked to supply it. The month may be extended for good reasons.
For most benefits, legislation has, since 1948, provided for decisions on claims and reviews to be made wherever practicable within 14 days. Different provisions exist for housing benefit and council tax

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benefit, but local authorities are nevertheless expected to deal with all determinations promptly. Failure to do so in overpayment cases may result in an authority losing central government subsidy.
It is, of course, a matter of public policy that the service given is prompt. Public services must now publish charters or service statements and report on performance and costs against those service standards. The Benefits Agency has targets for dealing with changes and the vast majority of cases are dealt with within 14 days. So, for the Benefits Agency, the increased costs would therefore be for very little gain.
While one always has to be a little cautious when looking at these measurements, because there may be a difference between the time of first notification and the time the clock starts ticking because the information was totally inadequate, the fact is that, for all changes—not just changes of circumstances—for income support, 95 per cent. of the cases are cleared within six days; for retirement pensions, 86 per cent. are cleared within five days and for child benefit changes, 92 per cent. are cleared within 13 days. Therefore, the Committee can see that we attempt to meet very exact targets because we are aware of the need to make speedy decisions in these cases.
As I have said, to make a 14-day rule would put the department and the various agencies into a straitjacket unnecessarily, which would not always work to the benefit of the claimant. Therefore, it is inappropriate to set on the face of legislation an absolute time limit which would apply in all circumstances regardless of the practical difficulties. I believe that the existing arrangements are satisfactory and that they do, in the great majority of cases, although perhaps not exactly, meet the purpose behind this amendment, as explained by the noble Baroness, Lady Turner of Camden. With that explanation, I hope that she can withdraw her amendment.
Baroness Turner of Camden: I thank the Minister for that response, but I am not entirely convinced that it is not a good idea to have such provisions stated on the face of the Bill. I know from my own experience that one can notify the Benefits Agency of a change of circumstance but that it may be some time before one is informed by the agency that that notification has gone through. I remember notifying the agency of the death of my husband. Some time went by and eventually I received a letter stating, "We are very sorry that your husband has died, but by the way you owe us £200 because there has been an overpayment". That is not a very good way of dealing with overpayments. That is an example from my own experience, but we must remember that those who receive council tax benefit or housing benefit are already living close to the edge, as the noble Earl said, and they really need some time limit to be put on the period within which the authorities should deal with a change of notification.
I shall read in Hansard what the Minister has said to see whether it might be a good idea to come back on Report with a slightly reworded amendment to deal with the exceptional circumstance. However, I believe that we must spell out somewhere in primary legislation the
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fact that 14 days is the period which would normally be expected to apply. In the circumstances, however, I beg leave—
Lord Mackay of Ardbrecknish: I simply want to suggest that the noble Baroness might like to look at Section 21 of the Social Security Administration Act 1992, which provides that:
"An adjudication officer to whom a claim or question is submitted under section 20 … shall take it into consideration and, so far as practicable, dispose of it, in accordance with this section, and with the procedure regulations under section 59 below, within 14 days of its submission to him".
Perhaps the noble Baroness would care to consider that when she is reviewing what I have said.
Baroness Turner of Camden: In the circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Turner of Camden moved Baroness Turner of Camden moved Amendment No. 54:
After Clause 5, insert the following new clause—
OVERPAYMENTS: RECOVERY OF PAYMENTS FOLLOWING CHANGE INCIRCUMSTANCES
(". In section 71 of the Social Security Administration Act 1992 (overpayment) at end of subsection (1) insert "and hut for any payments and sums which have arisen as a result of a failure to make an award within fourteen days following notification of a change of circumstances.".").
The noble Baroness said: This amendment seeks to deal with the situation when an overpayment has resulted from an error or from failure to process the claim. It proposes that changes in circumstances should be processed within 14 days. We are attempting to ensure that the recovery of overpayments following a change of circumstances should not be due to be repaid when that overpayment has arisen because there has been poor administration.
I am indebted to NACAB for some information about what happens in certain cases. It has told me that, with regard to attendance allowance, 26 per cent. of all decisions taken by adjudication officers were incorrect—that is, more than one in four—compared with 15 per cent. in 1994–95 and that 18 per cent. included either an incorrect payment or a case where the accuracy of the payment was in doubt. It has evidence relating to the disability working allowance also, showing that 40 per cent.—two in five—of all decisions taken were incorrect, compared with 31 per cent. in 1994–95. On family credit, NACAB states that 26 per cent. of decisions were incorrect, of which 14 per cent. included incorrect payments or cases where the accuracy of the payment was in doubt. On income support, 41 per cent. of decisions were incorrect, compared with 38 per cent. in 1994–95. Indeed, nine out of 10 decisions were wrong concerning overpayments, 46 per cent. of which included incorrect payments or cases where the accuracy of the payment was in doubt. On the Social Fund, NACAB stated that 74 per cent. of decisions were incorrect.
Coming from an organisation with a lot of experience of advising claimants, that is a record which shows that many decisions are incorrect. If people are

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disadvantaged because of those incorrect decisions, it seems wrong that they should be expected to meet the costs of those wrong decisions—yet that is what it amounts to. I repeat what I said in relation to the previous amendment: in dealing with people on benefit, we are dealing with people who live on tight budgets. Therefore, if mistakes are made by the authorities responsible for the administration of benefit, it seems to me that the claimants should not have to bear the weight of those wrong decisions. I beg to move.
Earl Russell: I shall not make a speech; I say only that the noble Baroness has made out a very strong case and I hope that it is taken seriously.
Lord Mackay of Ardbrecknish: As we heard from the noble Baroness, Lady Turner of Camden, the purpose of this amendment is to restrict the end date for the calculation of recoverable overpayments to 14 days following the date on which a claimant reports a change of circumstances. This does not fit well with the subject matter of Section 71(1) which concerns recovery of overpayments where a person has misrepresented or failed to disclose a material fact.
In any event, I can see no reason why the period of recoverable overpayments should be restricted in this way. As I explained on the previous amendment, every effort is made to action new information within 14 days. However, this is not always possible—particularly in complex cases or where the adjudication officer feels that additional information is required before the rate of benefit in payment can be reviewed. The practice of recovering the full overpayment was included in the 1948 National Assistance Act and has been reconfirmed by successive governments, both Labour and Conservative, in subsequent Acts—none of which restricts the period of the recoverable overpayment.
When people claim benefits they receive public money which Parliament has determined should be made available to those in genuine need. There is an obligation on those claiming benefit to ensure that they have reported everything that they should regarding their claim to benefit at the outset. Even where we are dealing with innocent misrepresentation where the claimant knew the facts but failed to report them, being unaware of the need to do so—and these cases are rare—the claimant has benefited from public money to which he or she was not entitled. In these circumstances it would be a dereliction of our duty if we did not seek to recover the overpayment in full.
Even when an adjudication officer decides that an overpayment is recoverable there is a right of appeal against the decision, and the Secretary of State can, and does, exercise his discretion where serious hardship would be caused to waive in whole or in part the recovery of the overpayment. In addition, where income support or jobseeker's allowance is in payment, the weekly rate at which the overpayment can be recovered is limited by regulations.
As far as improvements in the accuracy of payments of income support are concerned, the chief executive of the Benefits Agency has given assurances to the Public
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Accounts Committee of his commitment to accuracy improvement. He has set in motion both short-term measures—for example, to increase the accountability of managers and to improve the training given to staff—and longer-term measures to improve the processes and systems for awarding and paying benefit. That is one of the motivations behind the Change Programme. We want to see whether we can improve the system and one of our objectives is to improve the accuracy figures. I fully accept that that is important.
The calculation of overpayment is a complex area. The chief adjudication officer and the Benefits Agency are currently working together to improve standards by means of new information technology support, a programme of seminars, the production of new guidance and desk aids, and changes in class monitoring in order to increase the profile of adjudication within districts. I hope that all those factors will help to reduce the number of cases of inaccuracy and therefore the number of cases in which overpayment comes into play.
I am sure that the noble Baroness knows how we exercise our powers with relation to overpayment—and how we exercise discretion with regard to certain categories of people and the recovery of overpayment—and I hope that she will feel able to withdraw her amendment.
6.30 p.m.
Earl Russell: The Minister disappoints me. He deals with a case that has not been made. He answers a case against the recovery of overpayment. No one has made any such case. The case is simply that a degree of mercy be shown to people who have received a considerable amount of overpayment through no fault of their own. It is the recovery of those sums at speed, all in one go or over a very short period, which causes hardship. I can only hope that the Minister's tax inspector does not share his principles.
The Minister was also perhaps a little unwise to mention the Change Programme. I understand the case made by the Benefits Agency about the rate of error. I have always been inclined to the merciful approach because I know that to err is human and that the pressure to which it is subject is very severe. But I am surprised to hear the Change Programme invoked as a reason for the likely decline in the rate of error. One understands that wagers are not made in the Chamber. Were we to be outside the Chamber I might well have offered the Minister the wager that after three years of the Change Programme the rate of error would not be less than it is today. I would be rather surprised if the Minister took such a wager.
Lord Mackay of Ardbrecknish: I am not sure whether we can take wagers in the Chamber. The noble Earl says that we cannot. Given his long knowledge of these procedural matters, indeed we cannot. I say to the noble Earl that we would be extremely disappointed if we did not find ways to improve the accuracy of the information. One of the matters that we have discovered in looking at the process is that the point at which the raw information is checked is way down the system. Very often that is one of the factors that leads to

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inaccuracy. We hope that if checking takes place much closer to the beginning of the process not only will it speed up the process but it will also lead to greater accuracy. I do not want to go too far into the detail of the Change Programme. However, I would be deeply disappointed if the noble Earl's pessimism turned out to be justified.
As to hardship, the recovery of overpayment by the deduction of benefit is, we believe, the most cost effective way of recouping the loss. To ensure that no claimant suffers hardship, recovery from weekly amounts of benefit is subject to limits set out in the legislation. Where a claimant puts forward a good reason for a lower rate of recovery or argues that recovery should not take place, that case is looked at sympathetically. I hope that out in the field we look at individual cases of hardship sympathetically and at slower ways to recover overpayment or, in some cases, waive it.
Earl Russell: Whatever we can do about wagers, I am certain that in this Chamber I cannot tell the story of the Glasgow physiology student. Perhaps I can look forward to telling the Minister that story outside the Chamber.
Baroness Turner of Camden: I thank the Minister for his explanation. I remind him that we are referring here to the recovery of overpayments which are not the fault of the recipient but which arise because of incompetence or oversight on the part of the Benefits Agency or the authority responsible for making the payment. It must come as bit of a shock to many people suddenly to find that they are asked to make good an overpayment when they themselves have not been responsible for providing inaccurate information and the overpayment has arisen because someone else made a mistake in the system.
Although I do not intend to divide the Committee on the amendment, I feel strongly about it. I should like to think about what the Minister said. I am grateful to him for his comments about training. Obviously, it is important that staff should be properly trained and that performance monitoring should take place. I am also glad to learn that the head of the Benefits Agency intends to ensure that proper monitoring is carried out. However, that still does not tackle the situation I seek to deal with by way of the amendment; that is to say, to ensure that people are not suddenly faced, through no fault of their own, with a demand for repayment. I beg leave to withdraw the amendment on the basis that I am likely to come back with a rather similar amendment at Report Stage.
Amendment, by leave, withdrawn.
Baroness Turner of Camden Baroness Turner of Camden moved Amendment No. 55:
After Clause 5, insert the following new clause—
INFORMATION RELATING TO DETERMINATION OF CLAIM: TIME LIMITS
(" . In section 5(l) of the Social Security Administration Act 1992 (regulations about claims for and payment of benefit) at end of paragraph (h) insert "and for requiring a request for information or evidence by the determining authority to be made in such a
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manner and within such a period as may be prescribed, not being more than seven days from the date on which the new claim is received at the appropriate DSS office or the designated office, whichever is the earlier, and where it appears to the determining authority that further information or evidence is required for requiring that request to be not more than ten days from the date on which the claim is received;".").
The noble Baroness said: The purpose of the amendment is to provide for regulations which will ensure that when applications are made for housing benefit, requests for information and evidence are made within seven days of the receipt of the claim. Delays in the determination of claims for housing benefit are a significant factor in causing arrears of rent, even homelessness, despite regulations which require local authorities to make payments within 14 days of receiving full information on the claim. One cause of delay is the current lack of any time limit on the period for requesting additional information. The amendment seeks to tackle that by introducing time limits for requests for additional information and evidence by the determining authority.
DSS proposals to pay housing benefit in arrears make it even more essential that the benefit is paid speedily. During the Housing Bill there was an argument for changing benefit regulations to ensure that local authorities made requests for information or evidence within specified periods in order to prevent delays but without much success. At that stage the Minister said:
"I am not complacent. I recognise the strength of feeling behind this amendment. I propose to monitor the position".
I am advised by NACAB, to whom I am indebted for briefing, that the problem persists. I beg to move.
Lord Mackay of Ardbrecknish: Having listened to the noble Baroness, I now appreciate that her amendment is directed at the Secretary of State who may be being dilatory in some cases in collecting the necessary evidence. Perhaps I may explain how the claim process works at present and why I do not believe the amendment would help either the organisation or the claimant. The onus for making the claim for benefit lies with the individual who wishes to claim. That claim is submitted to the Secretary of State whose task it is to check whether it contains sufficient information to enable the adjudication officer to make a determination. If it does he submits it straightaway to the adjudication officer under Section 20 of the Administration Act. Section 21 requires the adjudication officer, so far as practicable, to dispose of the claim within 14 days. However, it may be that before he can dispose of it the adjudication officer requires the Secretary of State to request further evidence. In such cases the 14 days may well be impracticable. If the Secretary of State requires more information before submitting it to the adjudication officer, Regulation 7(1) of the claims and payments regulations allows the claimant one month to produce the required information or such longer period as the Secretary of State may consider reasonable.
The amendment would introduce into this procedure deadlines for the request of information. The Secretary of State would have seven days to request information following the receipt of a claim and a further three days would be allowed where further information was

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requested. I can understand the desire to ensure efficient administration, but I believe that such an amendment would be counter-productive and would not achieve what the noble Baroness desires. I suspect that it would not be beneficial to the claimant. If the request for information was not made within the prescribed seven or 10-day period the Secretary of State would pass the claim as it stood to the adjudication officer. The adjudication officer would then be obliged to decide the claim on the evidence before him. The onus is on the claimant to show that he is entitled to benefit and most requests for further information are made because it appears that the evidence the claimant has provided is not sufficient to do this. So the almost inevitable result is that the claimant, under the noble Baroness's suggested rule, would be disallowed benefit.
I know that that is not what the noble Baroness has in mind when she proposes the amendment, but I believe that that would be its effect. In my view claimants are well served by the current provisions, which provide the flexibility needed to ensure that we can ask questions to make sure that the adjudication officer has all the evidence before he makes the decision. If he is forced to make that evidence on inadequate information because of time limits, the chances are that the information will be inadequate in such a way that the claimant will not receive the benefit, or perhaps as much benefit, as he is entitled to receive. I know that that is in no way the noble Baroness's intention.
With that explanation of how the system works at present—I am sure the noble Baroness knows it—and as regards the problem that will arise from her amendment, I hope that she will feel able to withdraw it.
Baroness Turner of Camden: I thank the Minister for that response. He is quite right. It is not the intention in moving the amendment to make it more difficult for the claimant to have benefit; quite the contrary. The intention is to ensure that the claim is processed as quickly as possible and that the claimant is not subject to unnecessary delays in seeking his benefit.
As I said in regard to the previous amendment, I shall read in Hansard what the Minister said to see whether it might be a good idea to come back with a different form of wording designed to achieve the objective of the amendment. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Gould of Potternewton Baroness Gould of Potternewton moved Amendment No. 56:
After Clause 5, insert the following new clause—
REPORT ON BENEFIT FRAUD BY ONE PERSON CLAIMING ON BEHALF OF ANOTHER
(". The Secretary of State shall report to Parliament on the administration of social security in relation to the payment of benefit to another person on behalf of a person entitled to such benefit with particular reference to safeguarding such a person from fraud.").
The noble Baroness said: In moving the new clause, my intention is to highlight a crucial but so far ignored element in relation to fraud: the appointment of
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appointees and agents. I am somewhat surprised that a Bill which deals with fraud makes no reference to reviewing the system of appointeeships or agencies. There has been considerable evidence to suggest that such fraud as takes place is sufficient to warrant the Government conducting a substantial review of the system, in particular in respect of appointeeships.
The current arrangements which allow for a person to appoint someone else to manage his benefit entitlement on his behalf if he is mentally incapacitated, or to collect his benefit if he is unable to do so himself, can lead to considerable potential for undetected fraud and abuse. This possibility is exacerbated in a number of ways: by there being little statutory backing for the system for appointing appointees or agents; by there being no formal mechanism once an appointee is appointed; and because the Benefits Agency provides only limited public information on the system and conducts limited monitoring of appointees or agents.
At this stage I should declare an interest as I act as an agent. I have to say that I was disturbed at the time of my becoming an agent that no check was made as to my credentials. I have, however, an agency card stating that I am authorised to collect money on behalf of the named person. The Minister may tell us that there has to be a witness to such an appointment; and that is right. But there is no stipulation as to who that person should be. It does not have to be an accredited person such as a doctor or social worker. It can be someone closely connected to the person who is to act as agent. That is because officially the nomination of an agent is an informal arrangement between claimant and agent. It is assumed that the claimant is in a position to make judgments about who should act on his behalf. One consequence is that there is no monitoring of these arrangements, but it is all too easy for vulnerable people to be misled.
Another concern is that people acting as agents are under no obligation to inform the Benefits Agency when or if the claimant is no longer capable of giving the agent the authority to draw benefit. The agent could continue to collect benefits for someone when an appointee might be more appropriate. This opens the agent to the temptation to retain access to funds without there being the proper authority to do so. Relying on the integrity of agents, no matter how many are acting properly, is obviously a weakness in the system.
As it currently operates, the appointeeship system is even more open to abuse. Although this arrangement is intended for people who are unable to act for themselves, there is no requirement for medical confirmation that an appointee is required. Currently Benefits Agency staff without any special training or experience can make that decision alone. Similarly, there is a lack of public information about how the system operates and, as internal Benefits Agency staff guidance is inadequate, many procedures are not followed. For example, against current guidance some appointees have been appointed without a face-to-face interview to determine their suitability.
Once appointed, again there is no adequate monitoring. Staff guidance only suggests spasmodic case checks on appointees when a person is in

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residential care. Cases have arisen where the appointee has left his job at the home and consequently an unauthorised person has been collecting benefit entitlement, sometimes for years. Despite the Law Commission in 1993 concluding that appointeeships should be reviewed every six or 12 months, no action has been taken by the Government.
Another example is the number of care home owners who are often acting as appointees despite the fact that the Benefits Agency guidance states that they should be used only as a last resort. In order to protect the claimant, the very least that should happen is that the home concerned should be required to submit an annual account of the benefit claimed and how it has been spent. That would ensure that the benefit entitlement collected is spent on the person for whom the appointee acts.
It is difficult to estimate how widespread is fraud and abuse in this area of benefit payments. That is mainly because of the lack of information, lack of monitoring and the laxity of the current rules which provide adequate scope for fraud and abuse to occur.
In reply to a Question in another place, the Minister indicated that the department keeps these matters under ongoing review, and that in particular current arrangements for appointees and agents in the context of transition to payment by benefit cards is being examined. But that is not sufficient. There needs to be a tightening up of the whole process. The Secretary of State having to report to Parliament would highlight the shortcomings in the current system and would, one hopes, result in encouraging the DSS to consult on bringing forward adequate regulations. I beg to move.
Earl Russell: Agency is something which always needs supervision. Some of us have come across a fairly similar problem of agency in the administration of proxy votes. I do not make any party point. All parties have been accused of abusing the system. All parties need monitoring. Original sin does not have any party. But that is beside the present point. I hope that it may be discussed between our party headquarters.
We are dealing with a group of people who are often unable to look after themselves. For example, if someone suffers from Alzheimer's, he is not in a particularly good state to check whether the agent is exercising his power properly. There is some need for external supervision. What form that external supervision should take is a very much more difficult problem. One thinks perhaps of the powers of public trustees because the person concerned is in effect exercising a trusteeship and perhaps that is the appropriate form of supervision.
The Answer to a Written Question to which the noble Baroness, Lady Gould, referred was in answer to my honourable friend Miss Lynne in another place. I accept that the department keeps everything under review, but perhaps the Minister can tell us what kind of review is being conducted. What methodology is being used? What, if any, preliminary impressions has it gained?
Lord Mackay of Ardbrecknish: I have some sympathy with the concerns expressed by the noble
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Baroness, Lady Gould. It is recognised that the number of people who are incapable of managing their own affairs, and who are therefore in need of an appointee, is increasing. Regrettably, there have been cases where those who have been appointed to so act have misappropriated the money. In the past, some problems have been identified in relation to residential care and nursing homes, which are where those in need of appointeeship are commonly cared for.
However, I am not persuaded that the natural concerns that we all have are addressed by the proposed amendment. First, the vast majority of appointees are family or friends acting in a caring role and performing a valuable, but often unnoticed, task. I believe that it would be highly intrusive and provocative to conduct a survey which had a remit of checking that the appointee was not defrauding the person being cared for. I fear that a large number of existing appointees might respond to such a survey by requesting that the department appoint somebody else. The reality is that in many cases there would be no one else to be the appointee. That rather basic fact takes the edge off the point of conducting a survey.
I appreciate that in the past there have been problems in connection with some proprietors of residential homes. I can tell the noble Baroness that existing guidance to staff in Benefits Agency offices is that they should consider appointing a proprietor of a residential home to act for the claimant only where no other suitable person can be found. The reason for that guidance is not necessarily that proprietors are viewed by the department as potential fraudsters; it is simply that the task of being an appointee goes wider than just cashing the claimant's benefit, taking out the fees to the home and giving the claimant the remainder. There is an onus to report changes in circumstances which may affect entitlement to benefit, and proprietors of homes may not be in a position to fulfil such a role.
The noble Baroness outlined the procedure which currently exists before an appointee arrangement is approved. Perhaps I may go over that, too. The claimant is visited to ascertain whether he is capable of managing his affairs. The prospective appointee is also visited, either with the claimant or separately, to ensure that he understands and is prepared to take on the role of appointee. In addition the Secretary of State has discretion to terminate an existing appointment. He would certainly do that without delay if there were, for instance, any suggestion of the claimant being defrauded.
I can also tell the noble Baroness that the Benefits Agency looked at the whole area of appointee arrangements last year. It found that the procedures were basically sound, although some concerns were raised that procedures had not been properly followed. The noble Baroness suggested that, too. The conclusion of the agency was not so much that the procedures needed changing, but that it was necessary to emphasise the fact that the procedures should be followed.
I am grateful to the noble Baroness for raising these issues. I shall certainly discuss with my officials her point that procedures were not being properly followed.

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There is little doubt that they ought to be properly followed. I shall certainly take steps to ensure that the Benefits Agency is aware of the fact that the noble Baroness suggests that that may not be the case. As I said, after our investigation concerns were expressed that in some cases the procedures were not being followed. I hope that the emphasis we placed on following the proper procedures has, so to speak, got through to the staff on the ground.
The broader point raised by the noble Earl and alluded to by the noble Baroness related to keeping the matter under review. We are at a particular transition period in the way in which we pay benefits. The whole area of agent collection is being considered as part of the studies we need to undertake leading up to the benefit payment card. Research has shown us that we need to continue with an agent system for the collection of benefits because, as we all agree, there are customers who cannot collect themselves and who need appointees or agents. As my honourable friend said in another place, we are making the system more secure within the changes associated with the card. We must address methods of verification of the agent which are different from the current methods because benefit books are quite different from the systems which will be used for benefit payment cards. That is one of the problems we are having to investigate in addressing the introduction of benefit payment cards.
I hope that those words help to reassure the noble Baroness that we are looking at these matters with regard to the transition from the current system to the benefit payment card system. I should be interested to hear of any particular case she has in mind where the procedures fail to be carried out. Even if the appointee was the right and proper person to be appointed, the procedures ought still to have been carried out in order to ascertain that that was the case. We are all agreed that vulnerable claimants must be protected. I spend some time trying to tease out issues relating to the introduction of benefit payments cards. However, I believe that the amendment would take us too far down a different road and would not help to achieve our goal. I am pleased to have had the opportunity to discuss the matter and to hear the points put to me by the noble Baroness.
Lord Carter: Before my noble friend decides what to do with the amendment, perhaps I may make a suggestion. The Minister mentioned a review of the appointment of appointees and referred to the problems which arise when no one is available. We have an Official Solicitor and an Official Trustee. Will the Government consider an Official Appointee? Obviously, that would be a right and proper person and such an office would help to solve some of the problems described by the Minister.
Lord Mackay of Ardbrecknish: I have a suspicion that that would be a very bureaucratic system to devise as regards the bulk of the cases where the appointee is likely to be a close relative or friend of the person concerned. In the circumstances, it would be wrong to
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create a system similar to that of official solicitors and official trustees, but perhaps I have misunderstood the noble Lord's suggestion.
Lord Carter: I make the suggestion only in respect of those cases where there is a problem in finding someone to undertake the task. I believe that the Official Trustee delegates the task to a retired person. A retired insurance broker can act as an official trustee in certain cases. One could have a register of such people to be drawn upon when there was a problem finding the right person.
Lord Mackay of Ardbrecknish: When there is a real problem in finding an appointee the situation is different from that we have been discussing. It is not a matter of an appointee being available, but of an appointee being a right and proper person.
I shall look at that small point—small in number—and I shall try to ensure that after the Committee stage the Benefits Agency is aware of the concerns that procedures are not being properly followed.
Earl Russell: I am grateful to the Minister who has tried very hard to be constructive. Of course it is possible that this is not the best answer, but perhaps we ought to think about what is. When the Minister talked about the benefit payment card he was getting warmer. We must make some distinctions. It is not enough to control the choice of appointee. No one is immune to temptation, even close relatives. One need only think, "Oh, my prophetic soul, my uncle." One cannot deal with the problem simply by controlling the choice of the appointee; one must have some monitoring of the conduct of the appointee in office.
Here one needs to make another distinction between people who are unable to collect their benefit because of physical incapacity and people who are unable to do so because of mental incapacity. If you are unable to collect your benefit because of mental incapacity, you simply cannot monitor the person who is collecting it for you. That is what made me wonder about automatic credit transfer: I have heard the Minister sing its praises on other occasions.
Where there is a clear mental incapacity, if benefit were paid by automatic credit transfer it could be tapped only by somebody who had authorised access to the claimant's bank account, and access to bank accounts and use of them is carefully monitored independently. Is that a road which we might possibly go down?
Lord Mackay of Ardbrecknish: When we were having our discussions in relation to the benefit payment card, I discussed that point. The problem is that not everybody has a bank account. We may then start to go down the road of forcing somebody to have a bank account.
The noble Earl is quite right that the problem is greatly helped if the payment is carried out by ACT. But equally the money has to be collected from the bank. I am pleased to hear that the noble Earl thinks that the banks have sound systems in place—apart from

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American ones. My personal experience does not lead me to quite the same confident position which the noble Earl has adopted. But he has a point about the advantages of ACT with regard to someone who cannot get to the post office to collect his benefit either through the existing system or a future system. The problem is that individual circumstances are so varied it is difficult to make hard and fast rules.
Baroness Gould of Potternewton: I thank the Minister for his sympathetic reply and the comments he made. I believe that all parties agree with the noble Earl as regards the point he raised about proxy votes and use of them. I did not think that we should achieve such agreement on the rest of the amendment. I am pleased that we have gone so far in the meeting of minds.
I should be pleased to hear the results of the Minister's discussions with his officials so that we can reassure those many organisations which work in this field that action is being taken. That would be extremely helpful. I shall make sure that the Minister receives information about particular cases so that he will be able to refer those to his officials.
I was pleased to hear the Minister say that he will consider the point raised by my noble friend Lord Carter. In the light of the progress made on the amendment, I beg leave to withdraw it.
Amendment, by leave, withdrawn.
Lord Lucas: I beg to move that the House be now resumed. In moving that Motion, I suggest that the Committee stage begin again not before five minutes past eight o'clock.
Moved accordingly, and, on Question, Motion agreed to.

Finance Bill
Brought from the Commons, endorsed with the certificate of the Speaker that the Bill is a money Bill, read a first time, and to be printed.
Consolidated Fund (No. 2) Bill
Brought from the Commons, endorsed with the certificate of the Speaker that the Bill is a money Bill, and read a first time.

Education (No. 2) (Northern Ireland) Order 1996
7.4 p.m.
The Parliamentary Under-Secretary of State, Northern Ireland Office (Baroness Denton of Wakefield)The Parliamentary Under-Secretary of State, Northern Ireland Office (Baroness Denton of Wakefield) rose to move, That the draft order laid before the House on 3rd December be approved.
The noble Baroness said: The order will provide for the introduction in Northern Ireland of a grant scheme for pre-school education; clarify the open enrolment
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provisions of the Education Reform (N.I.) Order 1989; make provision to allow changes to be made to the existing arrangements for home to school transport covered by the Education and Libraries (N.I.) Order 1986; and introduce some technical amendments to educational legislation to remove impediments to one type of contract which may be appropriate under the private finance initiative. It also makes a number of minor miscellaneous amendments to existing legislation.
The order was considered by a wide range of educational interests in Northern Ireland. All of their comments were carefully considered and as a result, a number of minor changes have been made to the draft order. I am grateful for the interest shown by those who took the trouble to respond.
I believe that it would be helpful to the House if I say a few words about the main provisions of the order. The draft order contains enabling powers for the introduction in Northern Ireland of a grant scheme for pre-school education. This scheme has already been the subject of corresponding legislation in respect of England, Wales and Scotland. While plans to introduce the scheme in Northern Ireland in September 1997 have had to be postponed for the moment, the Government remain committed to the introduction of the scheme as soon 0as the necessary resources can be made available. While this is a national scheme, it is intended that the detail of its operation in Northern Ireland will reflect local circumstances there.
The existing provisions relating to the admission of children to grant-aided schools in Northern Ireland are revised by this order, although there is no underlying change in open enrolment policy. The general principle remains that the intention of the legislation is to enable parents as far as possible to realise their preferences in terms of the schools they would like their children to attend.
Specifically, the new provisions will clarify that parental preference is constrained by the physical capacity of schools; that schools, other than in specified circumstances, should admit pupils up to the limit of their enrolment number; and that schools admissions criteria can be applied only where a school is oversubscribed with applications.
The main new change is the proposal to prohibit schools from using the order of parental preferences as part of their admissions criteria.
Amendments to the transport arrangements proposed under this order will enable the Department of Education to take the lead in determining the transport arrangements which are considered necessary for facilitating the attendance of pupils at grant-aided schools and relevant students at institutions of further education. Such transport would continue to be provided free of charge for those pupils and students eligible for transport assistance.
The amendment also enables boards to provide transport assistance for those pupils at grant-aided schools and relevant students attending institutions of further education, for whom transport is not considered necessary. Provision is made for boards to make charges for any transport provided and for charges to he remitted

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in certain circumstances. This provision is an enabling one and the department and education and library boards are currently investigating alternative ways in which savings might be achieved. The new power is, however, necessary should further savings in transport costs be judged necessary to protect classroom expenditure.
I should stress, however, that the Government consider that free transport will always be necessary for pupils of compulsory school age who are unable to gain a place in a suitable school within statutory walking distance of their home and there is no question of such pupils having to pay for transport.
The order also introduces some technical amendments to education legislation to remove some impediments to one type of contract which may be appropriate under the private finance initiative. Previous powers were drafted at a time when such contracts were not envisaged and some adjustments are necessary.
The PFI may apply in a wide variety of ways in the education sector but one particular possibility which is being explored is the provision of school accommodation under a contract whereby the private sector would design, build, finance, operate and maintain the school premises and provide a variety of associated services. In theory this could include all aspects excluding teaching.
The existing powers in respect of voluntary maintained schools need to be adjusted because they prescribe that the education and library boards must provide some of these services for these schools. Also they prescribe separate funding mechanisms for recurrent and capital grant for voluntary maintained and voluntary grammar schools which would be difficult to apply in respect of a PFI contract. No changes are needed to existing powers to facilitate PFI contracts in respect of controlled schools or further education colleges.
I must stress that these powers will only come into operation if and when a contract is agreed between the relevant contracting authority and the individual school and is approved by the department. This will only arise if a contract is affordable and represents good value for money, also if it incorporates the important principles of risk transfer which are central to the PFI.
These are the main provisions of the order, which I believe will help improve the education system in Northern Ireland. I beg to move.
Moved, That the draft order laid before the House on 3rd December be approved.—(Baroness Denton of Wakefield.)
Lord Morris of Castle Morris: My Lords, the House will be grateful to the noble Baroness, the Minister, for introducing this order with her characteristic clarity and care. She will not expect us on these Benches to welcome with any enthusiasm whatever a document which extends to Northern Ireland the drab and dreary prospect of nursery vouchers—heretofore graciously innocent of them—the main burden of this order.
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Those of us concerned with the progress of the Nursery Vouchers and Grant Maintained Schools Bill in your Lordships' House day after day and night after night last year take no delight in contemplating the advent of those dismal dockets in the Emerald Isle. Nevertheless, the extension of the scheme has been formally proposed and we must live with it as best we can for what we can only hope will be the briefest of all possible periods. It is the policy of my party to honour such vouchers as are issued, but to issue none of them ourselves if and when we become the Government.
I have read this order carefully and I have also read, with profit, the debate upon it by the Seventh Standing Committee on Delegated Legislation in another place. That debate raised many questions which were not answered, and I should be grateful if the Minister could elucidate at least some of them.
First, her honourable friend was asked about uniform holiday arrangements and the savings in transport costs which they might make. He replied that he was waiting for the boards to tell him the exact savings that could be made through the co-ordination of holidays. Can the noble Baroness tell the House what he has managed to discover?
Commenting on the private finance initiative provisions in the order, her honourable friend said:
"It is early days for the PFI".
That drew the response from a Member of the Committee that it has been government policy now for five years, yet comparatively little has happened in Northern Ireland. Can the Minister tell us what has actually been achieved by the PFI in Northern Ireland?
Turning to the vexatious vouchers themselves, her honourable friend the Minister of State told the Committee that plans to introduce the voucher scheme in Northern Ireland in September 1996 had to be postponed to maintain and protect mainstream school and other education priorities. That phraseology is intriguing. What priorities were so urgent that the implementation of nursery vouchers had to be delayed for them, and when will the first nursery voucher now be issued?
Her honourable friend was later asked whether the voucher scheme would have the same value, regardless of whether there are qualified staff and regardless of whether the standards of accommodation were those required to meet educational criteria or those for child care. His reply was opaque, and I should be grateful if the noble Baroness could introduce an appropriate transparency.
He was also asked if he had signed a contract with a company called Capita to administer the scheme, worth £300,000 over a three-year period. He did not say yes; he did not say no. He did not say anything. Can the noble Baroness assist us with the relevant information and tell us whether any money has yet been spent on that contract or any similar one, which an incoming Government might have to cancel?
Lord Alderdice: My Lords, the noble Baroness has already been justly appreciated for her presentation of this order. However, I have to say that I too have a

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number of considerable problems about it. The matter of nursery vouchers has already been referred to, and we all understand that in another place there are increasing indications of concern about them.
In Northern Ireland we rejoice in the fact that, while the community charge, for example, was tried out as a pilot scheme for the rest of the United Kingdom, we were relieved of that particular problem. We had rather hoped that the same might be the case in respect of nursery vouchers. No more of that; it has already been mentioned.
I turn to a number of other issues. I see in them an extraordinary paradox in the way that the Government have approached matters. For example, take the matter of the PFI. I cannot for the life of me see why a developer should want to take on simply the provision of buildings. If they should take on not only the provision of buildings, but, as the noble Baroness has indicated, possibly almost all of the other services except for teaching, what precisely will the argument be to ensure that teaching should never come under that particular requirement?
Is one not simply moving in the direction of indicating that we should be talking about private schools? If the building, the maintenance, the management, the domestic services, the meals, security and all these other matters are to be dealt with in this way, including, presumably, secretarial staff, a librarian and an assistant in the classroom, how long will it be before in fact we are actually talking about a fully private school?
Of course, if one does not do that, then why on earth should private developers get involved? It has already been asked how far the PFI has gone in Northern Ireland. To my knowledge, in health, for example, where the issue has been available, there has not been very much progress, other than a car park provided at the Royal Victoria Hospital and one or two other bits and pieces. That is because, as private companies have looked at it, they have said that unless they are providing the whole package and the whole service, there is not a great deal in it for them. There has not been much progress in PFI in Northern Ireland in health, and I doubt very much if there will be very much progress in education either, unless one moves down the whole road.
If that is the current Government's intention, would it not be better to indicate that is the case? When people enter into programmes without knowing the whole story, they sometimes become very disenchanted with it. This is the case in the whole question of the local management of schools, for example. We find many people coming on to the boards of governors of schools—I see this at home in Belfast—with the intention of supporting teachers, not sacking them; with the intention of building and developing schools and services, not presiding over their deterioration and demise. Now in Northern Ireland they find themselves with recent cuts in education, with the calculation that perhaps 500 teaching jobs are at risk, with 15,000 children having to be moved into other classes to cope with the problem. These people, who came forward
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from the community to say, "Let us involve ourselves", are now saying, "We did not come in to preside over this". They have had their fingers burnt. In those and in other circumstances people who were tempted into a particular area are finding that they may not want to stick with it.
In the case of choice, of open enrolment, which is another matter dealt with in this order, we find that parents are encouraged to look around to find the best school for their children. But then of course if that means travelling a distance, the Government says: "We have to introduce a charge for the transport". What does that mean? What it means is that only those who can afford to pay for their children's transport can pay for the opportunity of choice that has been introduced by the Government.
That is not in any way to say that good things are not happening. I know from representations in regard to Grosvenor Grammar School, Belmont Primary School and St. Bernard's Primary School in my own area that capital developments have taken place there. I am not one who is not prepared to give credit where it is due. There have been very good developments.
However, I fear there are serious problems in all of the areas referred to in this order, whether it is PFI, nursery vouchers, or open enrolment and the transport charges that come in its wake and make the choice that is proclaimed available only to those who can afford to pay for it. I have the deepest of reservations not about some of the hopes and desires for choice and greater benefit and the introduction of more moneys into the system but for the outcome of this order.
Lord Harris of Greenwich: I wish to say a few words about nursery vouchers. I realise that the question I am going to put is really a question for the accounting officer at the Northern Ireland Office. We are on the eve of a general election, as we all know. The noble Lord, Lord Morris of Castle Morris, has made the position of a potential successor government clear; namely, that they would not pursue this scheme. The question arises, therefore, as to whether, once the Prime Minister announces the dissolution of Parliament, any steps will be taken to enter into new contracts in this area. If a successor government were to be elected and were to find that their predecessors had, notwithstanding the clear expression of their view, continued cheerfully to sign a contract when a large number of people in this country believe there is likely to be a change of government, that in my view would be a wholly improper way to spend public money.
What I am asking the noble Baroness to tell us is the following. What is likely to be the decision of her department in relation to the signing of any new contracts before the last date of this Parliament; namely, the 21st or 22nd May? Will she confirm that no new contracts would be signed in this area which would take effect after that date? Otherwise, in my view, the expenditure which would then arise would be an entirely improper way of committing public money. Perhaps she will confirm that that would be the position.
Baroness Denton of Wakefield: My Lords, I thank noble Lords for their input into this debate. I also thank

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the noble Lord, Lord Moms of Castle Morris, for the courtesy of informing me of the matters he wished to raise. I shall try to deal with all the points that have been mentioned.
As regards savings resulting from the harmonisation of holidays, I regret I can bring no further detailed news. The boards are presently examining the scope for making savings and are discussing the practicalities of that with schools. It is not possible to say what savings will result until those discussions are complete, but it is hoped that the boards will have completed their discussions within the next few weeks and that such savings as may arise will be identified.
Noble Lords discussed the private finance initiative in education. In common with developments in education in Great Britain, no PFI contract has as yet been put in place. However, there are whole new areas of activity in education comprising projects of a smaller size which lead us to believe that progress can be made in that area. The Department for Education in Northern Ireland has established six pathfinder PFI projects, two in further education colleges and four in secondary schools. One of the FE projects—the North West Institute of Further and Higher Education—has reached the stage where three private sector consortia have lodged their bids for this £7 million capital project and a preferred bidder is scheduled to be selected by June 1997. The other FE project—the Belfast Institute for Further and Higher Education—which is valued at £10 million has just formally been launched. The four schools projects are expected to be formally initiated following several months of detailed planning and preparation under EC procurement regulations. These will be launched in a few weeks' time.
The noble Lord, Lord Alderdice, asked about opportunities for the private sector. We believe that buildings which are utilised for only part of the year offer opportunities for use outside school hours in this respect. I certainly have faith in the value of education in Northern Ireland. If there were an outcry that such measures would cover teaching, no one would wish to take that on.
As regards PFI, what has not been achieved has not been for want of trying. Much will happen in the next few months. Noble Lords asked what priorities rank above nursery vouchers. I got the feeling that they might have welcomed the postponement which we are proposing but they were not so gracious as to make that statement. The reason for the postponement is that it is important to ensure that we have the resources to meet the commitments to which we are already committed. That was the reason for the decision to postpone the measure; namely, to ensure that resources are available in the classroom. We had not envisaged that our decision would give the Opposition Benches such pleasure as we reached that decision reluctantly. I reassure the noble Lord, Lord Harris of Greenwich, that the contract has been arranged with Capita that Northern Ireland negotiates an opt in clause to the national contract when required and not before. Therefore nothing will be spent until such point as the vouchers are introduced. In the view of the noble Lord, Lord Morris, Capita will not receive income in the future from that project but we hope that will not be the case.
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The value of the planned vouchers remains the same regardless of the setting—whether nursery schools or playgroups—in which they are used. Children will qualify for vouchers for one, two or three terms depending on the date on which they reach their fourth birthday. As noble Lords would expect, providers in all settings must meet the requirements in respect of staff qualifications and accommodation set out under the scheme before they can become registered voucher redeeming institutions.
The noble Lord, Lord Alderdice, mentioned the disappointment of people who had joined governing bodies in order to participate in them. I regard this matter from a slightly different point of view. Due to the current pressure on law and order budgets in Northern Ireland it is not possible to bring more resources to this matter. We have discussed resources with the boards and the governing bodies and the people who are involved at the sharp end in making the relevant decisions. We are grateful to people who give up so much of their time to become involved in education.
The noble Lord was concerned that transport costs would limit parents' choice as regards the schools their children could attend. I do not feel as nervous about this matter as he does as there is an enormous number of good schools available in Northern Ireland. However, we have to be practical. We could allocate far more resources to education if we were not faced with bills for rebuilding schools that have been burnt down in periods of violence. Ministers take no pleasure in being subjected to pressures in allocating resources. The best way to ensure that more resources are available for education is a resumption of the cease-fire and an end to violence in Northern Ireland. This debate concerns an enabling measure in the education sector. I believe it will bring benefit to education in the Province of which we are all so proud.
On Question, Motion agreed to.

British Gas plc (Rateable Values) Amendment) Order 1997 British Gas plc (Rateable Values) (Scotland) Amendment Order 1997

  Non-Domestic Rating (Chargeable Amounts for Small Hereditaments) Amendment Regulations 1997
  7.30 p.m.
  The Minister of State, Department for the Environment (Earl Ferrers)The Minister of State, Department for the Environment (Earl Ferrers): rose to move, That the draft orders and regulations laid before the House on 11th and 12th February he approved [12th Report from the Joint Committee].
  The noble Earl said: My Lords, all three of the instruments, are about non-domestic rates. I should like first to explain the effect of the two British Gas orders.

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  British Gas is one of a small group of industries whose rateable values are not assessed by the valuation officer, but instead are prescribed by the Secretary of State.
  One of the drawbacks of prescribing rateable values is that they cannot be easily amended if the amount of property, which is occupied or owned by the ratepayer, changes. In the case of British Gas, the property has changed—and changed significantly.
  Since 1995, British Gas has substantially reduced its property holdings by demolishing or disposing of a lot of its surplus premises. For example, many of the large gaswork sites, which have historically been included in the prescribed rateable value—such as, for example, the Greenwich Millennium site—have been cleared of all buildings or have been sold outright.
  We estimate that the value of property such as this is almost £95 million in England and Wales and £6 million in Scotland. If British Gas were assessed in the normal way by valuation officers, these property changes would automatically have been reflected in their rateable value. Because, though, their value is prescribed by the Secretary of State, we need to bring forward these orders to achieve the same results.
  The third set of regulations are required to correct an oversight in regulations which I brought to the House before Christmas. I apologise to the House for that.
  These regulations concern England and Wales only. When we debated the original Non-Domestic Rating (Chargeable Amounts for Small Hereditament) Regulations in December, I explained that they were introduced in order to give effect to the Chancellor's Budget announcement that the rates bills of small properties should be frozen in 1997/98 at their 1996/97 levels.
  As the regulations stand at present, though, small empty property will not benefit from the Chancellor's generosity—their bills will rise in line with inflation by about 2 per cent. That is not what the Chancellor intended nor is it, in fact, what we had intended when we made the regulations before Christmas. The regulations before us today will therefore extend the protection to all empty property, as from 1st April this year. I beg to move.
  Moved, That the draft orders and regulations laid before the House on 11th and 12th February be approved [12th Report from the Joint Committee].—[Earl Ferrers.]
  On Question, Motion agreed to.

  Deregulation (Provision of School Action Plans) Order 1997
  7.33 p.m.
  The Minister of State, Department for Education and Employment (Lord Henley)The Minister of State, Department for Education and Employment (Lord Henley) rose to move, That the draft order laid before the House on 17th February be approved [17th Report from the Deregulation Committee].
  The noble Lord said: My Lords, this draft order is a response to representations from some schools that there is at present an unreasonable burden on them following their statutory inspection. The School Inspections Act 1996 requires maintained schools in England and Wales, following their inspection, to prepare an action plan and distribute copies to the parents of all pupils at the school.
  Action plans have often turned out in practice to be longer and more detailed than was originally envisaged. They may focus on the detailed internal management of the school. As a result, they are often not easily intelligible to parents. We agree that distribution of the full text is often an unnecessary burden on schools and that parents would be better served by a short summary informing them how the school proposes to address points made in the inspection report. This would replicate what already happens with inspection reports, where only a summary is sent automatically to parents.
  The draft order therefore allows schools the option—I stress it must be an option—of distributing instead to each parent a summary of their action plan. Parents would still have the right to ask for a copy and schools would be obliged to inform parents of that right.
  The proposed order would be made under the Deregulation and Contracting Out Act 1994. The procedures laid down in that Act ensure that there is full public consultation on any proposal before it is brought forward as a draft order, and detailed scrutiny by Committees in both Houses thereafter. The House of Lords Delegated Powers Scrunity Committee and its counterpart in another place are satisfied that the proposal for the draft order meets the requirements of the 1994 Act and is appropriate to he made without amendment.
  I commend this order to the House, so that it may be signed by my right honourable friends the Secretaries of State for Education and Employment and for Wales as soon as possible. It will come into effect 14 days thereafter. I beg to move.
  Moved, That the draft order laid before the House on 17th February be approved [17th Report from the Deregulation Committee].—(Lord Henley.)
  Lord Morris of Castle Morris: My Lords, the House will be grateful to the Minister for explaining this order, which proposes a change that no one would describe as of an earth-shaking significance or magnitude. I would rate it as approximately .005 on the education Richter scale of importance.
  Lord Byron, in his epic poem Don Juan, describes his contemporary, Samuel Taylor Coleridge:
  "explaining metaphysics to the nation, I wish he would explain his explanation".
  If I may, I would presume to suggest to the Minister that his explanatory note to this simple order attracts the same request from me. Paragraph 2 of the explanatory note opens with the following sentence, which takes up 10 lines:
  "By virtue of section 17(1) of the 1996 Act the governing bodies of county, voluntary and maintained special schools which have delegated budgets and the governing bodies of grant-maintained and

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  grant-maintained special schools are required to prepare a statement of action which they propose to take in the light of either any report of an inspection of the school by a registered inspector under section 10 of that Act or a report of an inspection of the school by OFSTED (or in Wales, Her Majesty's Chief Inspector) which states that special measures are required in relation to the school".
  It is not only unmemorable, it is ambiguous because of its lack of punctuation. It can mean two quite separate things. The order, by comparison, is a model of perspicuity.
  However, all is not lost. We may also enjoy a second paper entitled "Explanatory Document", as distinct from "Explanatory Note", which is five and a half times as long as the order itself, and is supported by two annexes. The first of those lists the consultees, which at a conservative estimate total well over 200 persons and bodies; and the second divides them up into those who agree with the proposals, those who agree but propose amendments, and those who do not agree. That third group is made up of two members: the local education authorities in Lincolnshire and Pembrokeshire.
  Paragraph 4 of the explanatory document indicates clearly the level of importance of what is proposed. Its title is "Expected costs savings", and it says:
  "Schools which distribute a summary instead of the full action plan will have lower reprographic and stationery costs. Any postage costs they incur may also be reduced. Stationery and reprographic costs quoted by respondents mostly vary between 2p - 5p per sheet. Buckinghamshire LEA note that for an average secondary school with a distribution of 800 a two-page summary in place of a typical ten page action plan would save the printing of some 6,400 A4 sheets. Schools with a number of significant key issues to address have longer action plans and therefore larger potential savings".
  What that means is that the local LEA secondary school in Buckinghamshire, and presumably elsewhere, will be able, once every four or five years, to save approximately £224, which is the cost of 6,400 A.4 sheets being reprographically reproduced—every four years, £224!
  I have three questions to ask. First, Setting aside all questions of the percentage of officials' time, heat, light, premises cost and so on, how much, what order of magnitude, did it cost to produce this tiny order and to run a massive consultation on it? Secondly, why was that obvious omission not seen and obviated in the preparation of the School Inspection Act 1996? Failure to foresee the implications of paragraph 57 of that Act has resulted in this wasteful expenditure.
  Thirdly, why was the error not corrected simply by amending Schedule 8 to the Education Bill currently before this House? It could have been done for nothing. The School Inspection Act is already varied several times in that schedule. I assure the House that, if a suitable amendment had been proposed on school action plans, we on these Benches would not have prepared a midnight ambush against it. I should be grateful for the Minister's answers to those three questions.
  Lord Henley: My Lords, I appreciate that, as the noble Lord said, the provision is not exactly earth-shaking. He described it as being .005 on the Richter scale of education Acts. He then moved on to the regulation itself. He quoted from the first sentence of paragraph 2. It is a first sentence of which Henry
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  James himself would have been proud. The noble Lord, probably a great reader of Henry James, would be able to understand it perfectly well and, even given the lack of punctuation that he addresses, it is one that makes clear and sense.
  The noble Lord then moved on to the explanatory document, and complained to some extent that the document is too long. I believe the explanatory document is the very model of what explanatory documents ought to be. I believe that it received some praise in Committee in another place in relation to how it is set out, what we had done, and how and whom we had consulted. I take great pride in the fact that we list at enormous length those whom we did have to consult. Because I do not have to emulate my noble and learned friend the Lord Advocate in his activities of a night or two ago, I shall not take the trouble to read out the whole list of consultees in Annex 1. It stretches from page 7 to halfway down page 9. The noble Lord, Lord Harris of Greenwich, might like me to do so on some other occasion; should he wish it I will send him a copy.
  The noble Lord, Lord Morris, asked a number of questions relating to the cost, all of which can be addressed in a similar way. He asked first what was the cost of the order. I do not know; however, it was right that we should have proceeded on that basis. There was a burden on schools. Having done that, it was also quite right that we should have consulted. Having consulted, it was quite right that we should then have taken the opportunity to reduce the costs and burdens on schools, which is exactly what we are doing.
  Quoting from paragraph 4 of the explanatory document, the noble Lord says that the savings will be minuscule. But he talked only about savings in the cost of reproducing paper. The noble Lord should also remember that there are enormous savings in staff time. The noble Lord knows how long it takes to photocopy a large number of documents. That staff time could probably be used in other ways.
  Also, the noble Lord, as someone who is as "green" as myself, will also recognise that we should encourage schools to do their bit to reduce the number of forests that we have to chop down purely to produce these documents when they are not always so necessary.
  The noble Lord then went on to ask why this provision was not included in the 1996 Act. The 1996 Act was a consolidation measure relating back to the 1993 and 1994 Acts. As Members of this House, the noble Lord and his noble friend Lady Farrington also had a duty at that time to remind us that this might impose an unfair burden on this House in that it is a revising Chamber. I am sure they would have "done their bit" if this proposal had been suggested at the time.
  The noble Lord then went on to say that we could have saved an awful lot more money had we used Schedule 8 rather than this measure. I take the noble Lord's point. I do not know whether that is the case or not; but we have still to get that Act on to the statute book. I understand that the noble Lord and I will discuss that matter further on Monday. Nevertheless, the opportunity was available to us.

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  Even had we decided to follow the Schedule 8 route as the noble Lord suggested, I believe he would also agree with me, as I believe would the noble Baroness, Lady Farrington of Ribbleton, that it would have been right to consult on this matter. So we should not have saved the costs of the consultation even had we pursued the Schedule 8 route rather than the deregulation Act route. For that reason, and having answered all three of his points, I hope that the noble Lord will accept that this order, though not a major one, is a worthy one and that he will he prepared to support it. I commend it to the House.
  On Question, Motion agreed to.

  British Nationality (Hong Kong) Bill [H.L.]
  7.45 p.m.
  Lord Willoughby de Broke: My Lords, I beg to move that the Commons amendments be now considered.
  Moved, That the Commons amendments be now considered.—(Lord Willoughby de Broke.)
  On Question, Motion agreed to.
  COMMONS AMENDMENTS
  [The page and line refer to Bill (90) as first printed by the Commons.]
  COMMONS AMENDMENT
  Leave out Clause 1.
  Lord Willoughby de Broke: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 1. In doing so, I shall also speak to Amendments Nos. 2 to 18.
  One of the favourite expressions of the late Deng Xiaoping was,
  "It matters not what colour your cat is as long as it catches mice".
  So although the amendments before your Lordships will substantially alter the original Bill, I am satisfied that even though the cat—is a different sort of cat—a blow-dried, shampooed-and-set cat—it will still do its job and catch mice.
  I was touched when I read the proceedings of the Committee stage in another place. Several Members of the Committee were kind enough to express concern in case I should be in some way hurt or disappointed that my Bill should be so severely altered. I assure the Members of that Committee that I am not at all disappointed. I am only delighted that it is going ahead as planned. It is important that the Bill be enacted as soon as possible. Pride simply does not enter into it on this occasion. I thank the Members of that Committee for the time that they gave to reviewing the Bill, and particularly my honourable friend the Member for Staffordshire South who so skilfully piloted it through its various stages in another place.
  I also take this opportunity to thank my right honourable friend the Home Secretary for not being afraid to change his mind and for accepting the strong
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  case that was made to him by everyone who supported the Bill. My thanks go, too, to the Home Office officials who have worked hard to produce an effective and acceptable Bill in a very short space of time.
  Turning to the amendments, Amendments Nos. 1, 2 and 3 omit Clauses 1, 2 and 3 in order to pave the way for new Clause 1 and make some consequential rearrangements.
  The replacement clause in Amendment No. 4 provides for eligible people to have an entitlement to registration as British citizens on application, instead of an automatic claim to British citizenship. It also defines the requirements which applicants will need to satisfy in order to establish an entitlement, such as ordinary residence in Hong Kong at the time of application and immediately before 4th February 1997, the date on which the Home Secretary announced his intention to legislate. It excludes people who renounced or otherwise took active steps to give up another citizenship on or after 4th February 1997.
  The clause makes provision for the inclusion of children born as British nationals on or after that date and of those whose applications for naturalisation or registration as Hong Kong British Dependent Territories citizens or other British nationals are only granted on or after 4th February. It also makes provision for registration to take place only from 1st July 1997 to ensure that all potential beneficiaries qualify for right of abode in Hong Kong automatically on that date.
  Amendment No. 5 first removes subsection (1) of Clause 4 which provides for people becoming British citizens under the Act to lose British Dependent Territories citizenship (BDTC) and also British National (Overseas) BN(O) status if they have that status.
  As far as the loss of BDTC status is concerned, British citizenship under the Act will only be granted from 1st July; by then the status of Hong Kong BDTC will have ceased to exist; therefore that element of subsection (1) is unnecessary.
  As far as the loss of BN(O) status is concerned, depriving successful applicants of that status could mean that their children and grandchildren would not be able to benefit from Article 6 of the Hong Kong (British Nationality) Order 1986 and become British Overseas citizens (BOCs) if they would otherwise be stateless. Article 6 requires the person who would be stateless to be descended from a BN(O) or a BOC.
  Secondly, this amendment removes subsection (2) of Clause 4, which provides for the anti-statelessness provisions in Article 6 of the 1986 order to cease to have effect. As I have just explained, while these provisions will not be needed for the beneficiaries of the Act, they might still be needed for some potentially stateless children and grandchildren. They therefore need to be left extant.
  Thirdly, the amendment inserts the provisions contained in Clause 2 of the original Bill on the acquisition of British citizenship "by descent" and "otherwise than by descent". It adds provisions for British nationals other than BDTCs to acquire British citizenship by descent in all cases. Their present status is equivalent to a "by descent" status.

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  Amendment No. 6 reinstates the power, given under Section 41(2) of the British Nationality Act 1981, to make regulations for the taking of fees. It will be necessary to charge applicants a fee in the normal way to meet the costs of providing them with citizenship.
  Amendment No. 7 removes the reference to Section 44(1) of the British Nationality Act 1981. Section 44(1) says that any discretion shall be exercised without regard to the race, colour or religion of any person who may be affected by its exercise. This Bill has no discretionary provisions—registration will be an entitlement for those who meet the requirements. The reference to Section 44(1) is therefore unnecessary.
  Amendment No. 8 ensures that where, in legislation pre-dating the British Nationality Act 1981 which introduced British citizenship, there are references to,
  "[citizens] of the United Kingdom and Colonies",
  and their entitlement to do certain things or be eligible for certain things those references will automatically apply to people acquiring British citizenship under this legislation.
  Amendment No. 9 deletes subsection (3) of Clause 5 which is a House of Lords privilege amendment. A money resolution has already been passed making subsection (3) redundant.
  Amendments Nos. 10 to 17 are drafting changes which clarify Schedule 1 without affecting the substance. Amendment No. 18 deletes Schedule 2 which is not needed because the insertion of the reference to Section 41 of the British Nationality Act 1981 by Amendment No. 6—previously described—means that the British Nationality (General) Regulations 1982 would automatically prescribe how and to whom applications for registration should be made.
  I am delighted that the Government have accepted the Bill and I congratulate them on doing so. I know that those affected by it are immensely relieved.
  I end by thanking most sincerely all noble Lords from all sides of the House who have supported not only this Bill but the intention behind previous attempts to enact it. I think particularly of Lord Bonham-Carter. I know that he would be very pleased to see the Bill enacted, I only wish he were here with us. I am grateful to my noble friend on the Front Bench for her courtesy throughout all stages of the Bill. I warmly welcome her at last onto the side of the angels. I beg to move.
  Moved, That the House do agree with the Commons in their Amendment No. 1—(Lord Willoughby de Broke.)
  7.55 p.m.
  Lord Thomson of Monifieth: My Lords, the noble Lord, Lord Willoughby de Broke, is unduly modest in what he said in introducing the amendments. He has every reason to be proud at having finally been able to steer the Bill to a successful conclusion. When we last discussed it on Third Reading on 29th January, I made a final plea to the noble Baroness that it was not yet too late. That was in a mood of some pessimism and I was quite astonished, a few days later, to read the
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  announcement that the Government had decided to accept the Bill. We ought all to greet that change of mind very graciously.
  I am bound to say to the noble Lord, Lord Willoughby, that although I am not a great expert on procedure in your Lordships' House, I suspect that he is making a little piece of parliamentary history. It is not usual for this House to accept Commons amendments that virtually abolish the original Bill and rewrite it almost totally and then to say what a splendid thing the Government in the other place are doing in making the proposals.
  "Joy shall be in heaven over one sinner that repenteth, more than over ninety and nine just persons".
  There have been many just persons in all parts of both Houses and outside. They include distinguished former governors of Hong Kong and the present Governor of Hong Kong, I think one can now safely say. He felt that it was a point of honour for this country in dealing with the important minority of people in Hong Kong who have been loyal to this country and served it well. I notice from the proceedings in another place that the Minister there told us that there are probably 8,000 such people—a larger figure than some of us have used.
  Therefore, the Government have agreed to do something important. I was touched by what the noble Lord, Lord Willoughby de Broke, said about my former colleague, Lord Bonham-Carter, who was one of the pioneers in raising the cause. I join with the noble Lord, Lord Willoughby de Broke, and, no doubt, the noble Lord, Lord Dubs, in welcoming the change of mind on the part of the Government.
  7.56 p.m.
  Lord Dubs: My Lords, I very much agree with what the noble Lord, Lord Thomson, said. Perhaps I may on my own part congratulate the noble Lord, Lord Willoughby de Broke, on his single-minded dedication to getting the Bill through, the enormous amount of work he put into it and the able way in which he got us where we are. I am delighted that the Government have seen fit to change their mind. I was tempted to say that I always welcome the sinner who repents, but I do not regard the Minister as a sinner in that respect. I think that she had to do the bidding and was made to act as though she was a sinner, but I do not believe that she ever was. I do not expect her to comment on that but she was in a difficult position when the whole House was critical of the arguments that she put forward.
  It is good that we are now all agreed and I am delighted that the Government have seen fit to change their mind. I know that a lot of work went on behind the scenes to achieve that end and I congratulate the noble Lord, Lord Willoughby de Broke, and his friends who went to much trouble to see that the case for the Bill was well put and listened to by the Government. The result is that we now have agreement on what is before us.
  When I was in the other place, I had the privilege of serving on the Standing Committee dealing with the British Nationality Bill which became the 1981 Act. We spent much time considering the position of Hong Kong

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  and all felt uneasy as to whether we had got it right. The passage of time has suggested that we did not get it right. Further changes had to be made of which this is an important one.
  I do not wish to go through the details, the noble Lord, Lord Willoughby, has explained to the House what the new Commons amendments mean. I wish to make a comment about two of the changes. I think it is right that people should register to become British citizens rather than that there should be an automatic process. I believe that British citizenship is an enormous privilege, by whatever means one acquires it. It is right that for those who are not British citizens the process of becoming such should be an explicit and deliberate act rather than something that happens to them inadvertently so that they do not even know that they have got it. To that extent, the change is very much for the better and improves the principle underlying the Bill. I appreciate that many of the changes are technical and 1 do not wish to dwell on them.
  I wish to ask the Minister one question. In the new arrangements under the Bill, the critical date is 4th February 1997. I understand that with the exception of children born after that date, that is the cut off date and anyone who gave up any other citizenship before 4th February would be entitled to become British citizens on that date, assuming that they qualify by reason of the provisions in the new Bill.
  In the original version of the Bill, the cut off date was 21st November. I wondered what the reasons were for that change. I understood that the date of 21st November was chosen so that people would not have had any basis for renouncing their citizenship, whatever it was, in order to benefit. It gave a fairly long period so that the position would be clear. I wondered what the reason was for making the change. I do not dispute that there may be merit in it.
  Beyond that, I repeat the welcome to the new Bill. I am delighted that we have got there and done it before the election so that it is on the statute book and the people of Hong Kong will know that we have done our duty by a small minority of people there who deserve well of us and who will receive justice as a result of the measure.
  8 p.m.
  Baroness Blatch: My Lords, I am grateful to my noble friend Lord Willoughby de Broke for accepting the savaging—it is the only way I can put it—of his original Bill. But as my noble friend said, the purpose of the Bill remains firmly intact and at the end of the day that is what matters.
  When the Bill was last considered, I indicated that the Government remained opposed to new legislation to give British citizenship to the solely British ethnic minorities in Hong Kong. The House will now be fully aware that we have decided to withdraw our opposition. We have done so because, in the light of the views expressed in both Houses and by the Governor and others in Hong Kong, it has become clear that, however forcefully we emphasised the immigration guarantees which the ethnic minorities have been given, and
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  however much we underlined the fact that they would not become stateless, we had ultimately not succeeded in assuaging the concern that the ethnic minorities felt about their position in Hong Kong after the change in sovereignty. It is plain that nothing short of British citizenship will put their minds at rest.
  The Government are therefore now content to support my noble friend's Bill. As my noble friend said, the Bill as it has returned from another place is a rather different animal from the one which was before the House last year. However, it is different only in detail, not in its objectives. The amendments are all designed to ensure that the Bill properly meets its objectives. As amended, the Bill will ensure that, subject to certain safeguards to prevent abuse, all solely British nationals of whatever type in Hong Kong will be entitled to be registered as British citizens. It will also cover all those in the non-Chinese ethnic minority communities in Hong Kong who would have benefited from the immigration guarantee.
  My noble friend has unreservedly welcomed the amendments before us this evening and I also commend them to the House. I hope now that we can see early enactment of this measure and the speedy establishment of the machinery for dealing with the applications in Hong Kong.
  As regards the 4th February date mentioned by the noble Lord, Lord Dubs, the Bill, like the Government's earlier assurances, is aimed at the ethnic minorities living in Hong Kong when the Home Secretary made his announcement. It would be wrong for the Bill to apply also to people resident elsewhere who moved voluntarily to Hong Kong following the announcement by the Home Secretary. The cut-off date was pushed back, as it was thought only fair not to—I must pause there.
  Lord Dubs: My Lords, perhaps the Minister will give way. I welcome what she has said so far by way of explanation and look forward to hearing the rest of it when the Minister is ready to give it to us.
  Baroness Blatch: It was fair not to penalise those who renounced their citizenship before the Home Secretary made his announcement. I think I got it right in my own first answer. I should have left it at that while I was winning.
  I join my noble friend in thanking my right honourable friend the Secretary of State who did listen to the arguments; Members of another place who worked very hard and fast in bringing the Bill before us at this time; and the officials in the Home Office who, I know, have been helpful to my noble friend in talking him through the amendments to make sure that nothing in the intentions of my noble friend were compromised in any way.
  I think all of us will want to join my noble friend and other noble Lords who referred to the late Lord Bonham-Carter. What Lord Bonham-Carter started has been finished tonight, due in large measure, I believe, to the arguments he put in this House which were taken up by my noble friend Lord Willoughby de Broke. I am

  501
  not sure what protocol says about what I am about to say. But I should like not simply to put that on record but to write to Lady Bonham-Carter with the acknowledgment of this House that the efforts made by Lord Bonham-Carter in this respect have been both recognised and honoured in the passage of this Bill.
  Let me conclude by offering my congratulations to my noble friend on his success with the Bill. I know that it will give him and all those who supported him great satisfaction to see it enacted and this long-running and difficult issue brought to a happy conclusion.
  Lord Dubs: My Lords, before the Minister sits down, let me add a word in relation to the late Lord Bonham-Carter. I knew him very well as a friend in all kinds of political activities outside the House, although he was in a different party. I very much respected the stand that he took on this matter. I was not a Member of the House at the time. What the Minister said is a very noble gesture with which I should like to associate myself fully.
  Lord Thomson of Monifieth: My Lords, before the noble Lord sits down, I should like to express my appreciation and say to the noble Baroness that what she has just said is generous beyond the call of duty. I am sure that it will be very deeply appreciated by Lady Bonham-Carter.
  Lord Willoughby de Broke: My Lords, I commend Commons Amendment No. 1 to the House.
  On Question, Motion agreed to.
  COMMONS AMENDMENTS

  2 Leave out Clause 2.

  3 Leave out Clause 3.

  4 Before Clause 4, insert the following new clause

  ACQUISITION OF BRITISH CITIZENSHIP
  '.—(1) Subject to the provisions of this section, the Secretary of State shall, on an application made for the purpose, register as a British citizen any person who—

  (a) is ordinarily resident in Hong Kong at the time of the application; and

  (b) satisfies the requirements of subsection (2) or (3) below.

  (2) The requirements of this subsection are that, immediately before 4th February 1997 ("the relevant date"), the person—

  (a) was ordinarily resident in Hong Kong;

  (b) was a British Dependent Territories citizen by virtue only of his having a connection with Hong Kong (within the meaning given by the Schedule to this Act); and

  (c) would have been a stateless person if he had not been such a citizen, or such a citizen and a British National (Overseas).

  (3) The requirements of this subsection are that, immediately before the relevant date, the person—

  (a) was ordinarily resident in Hong Kong;

  (b) was a British Overseas citizen, a British subject or a British protected person; and

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  (c) would have been a stateless person if he had not been such a citizen, subject or person.

  (4) Subsections (2) and (3) above shall each have effect, in relation to a person who is or was born at any time on or after the relevant date, as if the reference to immediately before that date were a reference to that time.
  (5) Paragraphs (b) and (c) of each of those subsections shall have effect, in relation to a person who, at any time on or after the relevant date, becomes or became—

  (a) in the case of subsection (2) above, a British Dependent Territories citizen; or

  (b) in the case of subsection (3) above, a British Overseas citizen, a British subject or a British protected person,

  as if the reference to immediately before that date were a reference to that time.
  (6) A person shall not be registered under subsection (1) above if, on or after the relevant date, he renounces or renounced, or otherwise gives or gave up of his own volition, the status of a national or citizen of a country or territory outside the United Kingdom.
  (7) A person shall not be registered under subsection (1) above before 1st July 1997.
  (8) In this section expressions which are also used in the British Nationality Act 1981 ("the principal Act") have the same meanings as in that Act.'.
  5 Clause 4, page 2, line 1, leave out subsections (1) and (2) and insert—
  '(1) A person who is registered as a British citizen under subsection (1) of section (Acquisition of British citizenship) above, and satisfies the requirements of subsection (2) of that section, shall be treated for the purposes of the principal Act as—

  (a) a British citizen by descent; or

  (b) a British citizen otherwise than by descent,

  according as, immediately before becoming a British citizen, he was for the purposes of that Act a British Dependent Territories citizen by descent or a British Dependent Territories citizen otherwise than by descent.
  (2) A person who is registered as a British citizen under subsection (1) of section (Acquisition of British citizenship) above, and satisfies the requirements of subsection (3) of that section, shall be treated for the purposes of the principal Act as a British citizen by descent.'.
  6 Clause 4, page 2, line 11, leave out 'other than subsection (2)'.
  7 Clause 4, page 2, leave out lines 13 and 14.
  8 Clause 4, page 2, line 19, at end insert—
  'section 51(3) (meaning of "citizen of the United Kingdom and Colonies" in other Acts and instruments).'.
  9 Clause 5, page 2, line 24, leave out subsection (3).
  10 Schedule 1, page 3, line 5, leave out from 'person' to 'below' in line 8 and insert 'shall be taken to have a connection with Hong Kong for the purposes of section (Acquisition of British citizenship)(2) of this Act if—
  (a) subject to paragraph 2'.
  11 Schedule 1, page 3, line 15, after 'mother' insert '("the registered person")'.
  12 Schedule 1, page 3, line 20, leave out 'person registered' and insert 'registered person'.
  13 Schedule 1, page 3, line 25, leave out from 'would' to end of line 26 and insert ', but for his death or renunciation of citizenship, be such a citizen by virtue of his having such a connection'.
  14 Schedule 1, page 3, line 28, leave out 'citizenship has been renounced and subsequently resumed,' and insert 'the registered person had previously renounced citizenship of

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  the United Kingdom and Colonies, or British Dependent Territories citizenship,'.
  15 Schedule 1, page 3, line 36, leave out 'have been so but for his death' and insert ', but for his death or renunciation of citizenship, he such a citizen by virtue of his having such a connection'.
  16 Schedule 1, page 3, line 42, leave out '(3)' and insert '2.'.
  17 Schedule 1, page 3, line 43, leave out 'under' and insert 'as specified in'.
  18 Leave out Schedule 2.
  Lord Willoughby de Broke: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 2 to 18 en bloc, to which I spoke on Commons Amendment No. 1.
  Moved, That the House do agree with the Commons in their Amendments Nos. 2 to 18.—(Lord Willoughby de Broke.)
  On Question, Motion agreed to.

  Social Security Administration (Fraud) Bill
  8.6 p.m.
  House again in Committee.
  [Amendment No. 57 not moved.]
  Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 58:
  After Clause 5, insert the following new clause—
  REPORT TO PARLIAMENT: SUPPLY OF INFORMATION AND IDENTIFICATION OF ENTITLEMENT
  (". The Secretary of State shall, within two years of the commencement of this Act, lay before each House of Parliament a report on such progress as has been made on the efficiency of administration in maximising entitlement to benefit, to include—

  (a) an assessment from each local authority as to the progress made by that authority in identifying and maximising entitlement to benefit in that authority area;

  (b) the extent to which information held by any authority under the provisions of this Act has been used by the authority and the Secretary of State to identify those persons who are entitled to receive benefit for the purposes of determining that entitlement; and

  (c) the extent to which information supplied to one authority for the purposes of ascertaining benefit entitlement has been used as verification for another benefit claim.").

  The noble Baroness said: We return to the subject of benefit entitlement. It is an extremely important issue and only one amendment so far has addressed it. On that amendment, Amendment No. 6, with which Amendment No. 57 was grouped, we argued that in the four main income related benefits—family credit, income support, housing benefit and council tax benefit—perhaps £2 billion to £3 billion worth of benefit went unclaimed. In other words, probably as much benefit was underpaid in the DSS's budget as was lost because it was overpaid due to fraud, a pattern broadly confirmed by research abroad.
  It is worth emphasising that over 30 per cent. of those eligible for the in-work benefit of family credit fail to claim it; that probably 30 per cent. of pensioners eligible
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  for council tax benefit fail to claim it, a figure rising perhaps to 45 per cent. among pensioners who are owner-occupiers; and that 40 per cent. of pensioners entitled to income support fail to claim it. Those are very large figures indeed. I accept that there is always a loss of potential claimants whenever there is reliance on a means-tested benefit, unlike a universal benefit. But the failure especially of the elderly—and significantly, they are the under-claiming group in almost every income related benefit—to claim what is rightfully theirs is far too high.
  It is often said that people fail to claim because the sums are too small. But, as we argued last Tuesday, the sums can be very large indeed. A pensioner who fails to claim income support and council tax benefit is probably losing a £20 addition to a pension of £61 a week. Again, it is sometimes said that people fail to claim because their circumstances change very rapidly. Again, that is simply not true for pensioners whose income varies very little over the rest of their non-working lives.
  It is sometimes said by the Government—it was repeated by the Minister last Tuesday night—that it is a matter of personal choice. I fail to see how, realistically, it can be a matter of personal choice to live on £61 a week rather than £81 a week and have to stay in bed because you cannot afford to run the heating in the living room. We all have enough confidence in the Minister's decency to know that he does not want pensioners living below the poverty line because they fail to claim the benefits to which they are entitled. The question is how we encourage them to take up those benefits.
  One thing we have found, and it is clear from the Government's own report Income Related Benefits: Estimates of Take Up, is that of all the income related benefits, housing benefit has the highest take-up, even by pensioners. More than 90 per cent. of pensioners were claiming housing benefit to which they were entitled. If they were local authority tenants, so far as I can tell from the statistics, though they are not calculated in the most useful way for this purpose, it looks as though there is almost 100 per cent. take up.
  The reason is very simple. The local authority, as I well know because I have been involved in some of these campaigns, uses information technology and 100 per cent. mailing through rent books, backed up by take-up campaigns to ensure that every tenant is aware of housing benefit. It uses welfare rights officers to help with original forms and thereafter IT comes into play. As housing benefit is deducted from the gross rent, most pensioners—and certainly all of those on the basic state pension only—live, and learn to live, rent free.
  In other words, we already know how to use IT backed by entitlement campaigns to ensure that there can be virtually 100 per cent. delivery of an income-related benefit to the elderly, who seem with other benefits so unwilling to claim what is rightfully theirs. We ask the Government therefore to use the same information technology which is sought to eradicate overpayment due to fraud to ensure that it also eradicates that underpayment due to under-claiming. We

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  firmly believe that the Government could do it if they had the political will, but we believe that this Government are not interested in doing so. In his reply on Tuesday, the Minister said that ample information was available in leaflets, at post offices and on forms; this from the Government who have cut home visits, cut the helpline and cut the offices where pensioners can get help in person.
  The Victorians were rather keen on categorising people and used to divide their poor into God's poor, poor devils and the devil's poor; that is, those deserving of charity, those deserving of the poor law and those deserving of prison. We are right to stamp down on fraud and to proclaim publicly that we will not tolerate it. But in the process—this must worry all of us—we run the risk of demonising claimants as scroungers and thus deterring the very people—the "deserving poor" and certainly the elderly, those who cling to standards of respectability and privacy, who conceal their poverty rather than flaunt it and who are too easily shamed by being branded as a welfare claimant—from claiming that which is their due.
  Hence this amendment. We know that we have the technology to improve the take-up of benefits to meet real need. We know that a considerable number of pensioners claim one means-tested benefit, so that their financial circumstances are, so to speak, on file, but fail to claim another one. That information could be used to passport people onto that second benefit. If one took, for example, council tax benefit, we could probably reach about 70 per cent. of pensioners who are not claiming income support; not more than 70 per cent., I accept, because there are differences in the capital rules on the one hand and many pensioners live in the home of someone else so they do not receive council tax benefit. Nonetheless, if we used council tax benefit to passport people on to income support and reached those 70 per cent., where the two groups overlap according to our research, instead of only 60 per cent. of pensioners claiming their top-up in income support, we might reach between 85 and 88 per cent. We cannot get 100 per cent.—I accept all the warnings about technical difficulties, deduction rules and the like—but we can do a darned sight better than we are doing at the moment and than the Government appear willing to do.
  We have the technology. We now need to ensure the political will. We want to ensure that local authorities are determined not only to stamp out fraud but also to deliver benefit to those who are entitled to it. One way of ensuring that political will is to have local authorities report to the Secretary of State and the Secretary of State report to Parliament on how successful they have been in both regards—not just eradicating fraud but encouraging take-up of benefit. By engaging in take-up campaigns which will be beneficial to the claimant and to the local economy, we believe that local authorities can be very successful on this score. The take-up campaign in which my own local authority was involved brought nearly £500,000 of extra benefit into our community in the space of a month. I very much hope that the Government accept the spirit of the amendment. I beg to move.
  8.15 p.m.
  Earl Russell: The point the noble Baroness makes about demonising claimants is an important one. I have looked at some of the advertisements for the fraud hotline and I believe that they run the risk of creating that effect. I accept that that is not their intention, but again I come back to the point about balance. If you stress fraud and you do not stress entitlement you create a thoroughly misleading picture. Then you get a cult of hostility to claimants. If we can believe the advance publicity for the forthcoming programme on Channel 4 it seems that a great deal of that has rubbed off on people who do not know any better than to pick up casual information. There will always be such people. So something really must be done on this front.
  I intend to address this matter further on Amendment No. 59. However, if the Minister should happen to prefer the amendment in the name of the noble Baroness, I should be entirely happy with that. The points also apply about putting the local authority under two different incentives, two different criteria of success. Then the local authority can, with respect for the evidence, attempt to balance those criteria against each other. We already have targets, tables and all that apparatus for the detection of fraud. I have drawn the Minister's attention previously to the fact that Liberal Democrat councils happen to come top in them. I do not set much weight by league tables. I do not claim great credit for that fact. I just say it in order to say that I speak, as it were, from, in the Government's own terms, a position of perhaps some strength. It is from that position that I should like to see equal weight given to the pursuit of entitlement and take-up. I hope the Minister will look with favour on one or other of the amendments. It really does not desperately worry me which of them it is.
  Lord Carter: I should like to come in on another point with regard to the amendment. However, before doing so, perhaps I may take up a point made by the noble Earl, Lord Russell. He referred to the forthcoming Channel 4 programme and to the people who do not know any better. I understand from the pre-publicity that they all intend to vote Conservative.
  Perhaps I may return to a point that we discussed on Tuesday on Amendment No. 6, which was moved by my noble friend Lady Hollis and which dealt with eligibility for benefit entitlement. I had a friendly exchange with the Minister about the budget of the DSS. I asked how much the department estimates will be spent on benefits and how much is actually taken up. I do not think I explained it particularly well but, if I may, I shall remind the Minister of what I said:
  "Perhaps the Minister can assist on one aspect. Presumably, when the DSS agrees its budget with the Treasury every year in the public expenditure round it must include a figure which represents its expectation of the take-up of benefit. I remember reading that almost invariably the take-up has undershot the estimate. What is the figure that the DSS persuades the Treasury that it will pay and how much does it actually pay?".—[Official Report, 11/3/97; col. 224.]
  I have before me an extract from the Hansard report of the Bill's Report stage proceedings in another place. I think the answer to my question is there. It will be

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  interesting to see whether the Minister can put some flesh on this point. The Parliamentary Under-Secretary of State for Social Security, Mr. Oliver Heald, said:
  "It is a dear measure of success that in 1994–95—the most recent year recorded—£9 out of every £10 of available benefit was claimed".—[Official Report, Commons, 4/2/97; col. 847.]
  When the DSS agreed the public expenditure round with the Treasury, did it include the figure expecting the £10 of available benefit to be claimed or did it use a lower figure?
  This is a genuine attempt to find out how the outturn corresponds with the amount the DSS expects to be claimed. The Minister said in another place that the take-up appears to be £9 out of every £10 of available benefit. Does that mean that the DSS agrees with the Treasury on the basis that £10 will be claimed? The Minister shakes his head. I shall be interested to hear his explanation of the difference.
  Earl Russell: I am sorry to disappoint the noble Lord, Lord Carter. He said that all the people in the Channel Four Dinner Party programme intended to vote Conservative. That was this morning's information. But the Evening Standard has since followed up these people and identified them and found that no more than three out of six of them intend to vote Conservative. I have no idea for whom the others intend to vote. I hope that it is not my p y and I am sure that the noble Lord also hopes that is not his party. One of them admitted to having voted last time for the Natural Law Party. Maybe it serves a useful purpose.
  Lord Mackay of Ardbrecknish: By and large I do not believe that it enhances my information in any shape or form to watch Channel 4. I do not know what the noble Earl is talking about, and neither do I intend to watch a programme on Channel 4.
  Perhaps I may turn to this new clause. Much of the argument is the same as that which we went over on Tuesday. I have no intention of repeating all that I said on that occasion about uptake. I say to the noble Lord, Lord Carter, that he is confusing two quite separate issues. The first is the calculations which are made from the information collected in the Family Resources Survey and the report on take-up that we produce. That is entirely separate from the second issue, which is the way in which we and the Treasury discuss what our expenditure will be in the year ahead. In fact, we use expenditure this year to calculate, bearing in mind factors such as the inflation rate, what expenditure might be in the year ahead, and so on. The two things are quite separate.
  Lord Carter: Does that mean that the department does not estimate any improvement in its success rate in increasing entitlement?
  Lord Mackay of Ardbrecknish: That is not a conclusion that we would reach deliberately. We use the information that we have on the money that we have spent in the current financial year and extrapolate that into the future, given the inflation rate, demography, and so on to arrive at what we would expect to spend on the
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  same basis. My recollection is that we tend to undershoot and normally spend a little more than we have estimated. That usually appears in the Red Book at Budget time. Quite clearly, when we do that we have supplementary estimate demands on the reserve for extra expenditure. We are hopeful that, thanks to the new payment system which will be developed along with the benefit payment card, that we shall be able to project more accurately what our requirements will be in the year ahead.
  The new clause before us seeks to put in place arrangements for reports on the take-up of benefit, including the use of information as proposed in the noble Baroness's other new clause, which we have now passed by and which does not form part of the Bill. Without going into the arguments to the same degree as I did then, my response to this amendment is quite straightforward. Of course, we agree that it is important to monitor all aspects of the policy in practice. We make a great deal of effort to monitor across quite a wide field. We produce a lot of information and statistics about benefits in all their shapes and sizes and about the take-up.
  Every year we publish estimates of the take-up and that is where the noble Baroness gets her figures on those matters. They include the income-related benefits such as housing benefit, council tax benefit, income support and family credit. We produce such a report annually from information that we have in other fields and extrapolate from it what benefits may not be taken up. That is the information which the noble Baroness is praying in aid in this debate as she did during Tuesday's debate. I believe that the continuation of this publication, which is not in any doubt, more than adequately meets the position for producing statistics in this area.
  I do not want to go into detail as I did on Tuesday about all the ways in which we attempt to make sure that people know about their entitlement to benefit. Local authorities do the same. We tell people about housing and council tax benefit if they are on income support. If they are receiving pensions that information is in the pension book. The local authorities tell people who might claim housing and council tax benefit about other benefits to which they may be entitled.
  In the current three-year period the department and our various agencies are spending something like £84 million on publicity. I have already explained the various things we do and I shall not weary the Committee by repeating my speech of last Tuesday. The important point about this new clause is that it requires reports on the take-up of benefit. I believe that the income-related benefits and the estimate of take-up in the annual report from the department's Analytical Services Division largely meets the demands of the noble Baroness. I do not see the need for this new clause.
  Baroness Hollis of Heigham: I must say that, unusually, for the Minister, that was a rather perfunctory reply to the amendment. The amendment asks not for a snapshot of the current statistics based on that report, of which I believe we are both well aware and which I am

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  sure we have both studied assiduously, but for an assessment of the progress made by an authority in identifying and maximising entitlement to benefit in that authority area. Perhaps the Minister can tell me to what extent the report that he has, with which I am very familiar, in any way meets either the requirement as to progress in maximising entitlement and speaks to the efforts of local authorities. That is what the amendment calls for and that report in no way touches it. Perhaps the Minister can help us.
  Lord Mackay of Ardbrecknish: I believe that I have made it clear that I believe the statistics which are collected in this report are adequate to give us a picture of the position. I do not believe that it is necessary to get each authority to produce a report. I have made that position clear. I can pad it out for the next 20 minutes, but, frankly, I do not see any point in that. We have had the argument about take-up. I believe that our present approach is the way to address the problem. The statistics that we already produce seem to give the noble Baroness more than enough information to make speeches on the subject of take-up.
  Earl Russell: If the Minister does not see any point in asking local authorities to report on their efforts on take-up, why does he see so much point in asking them to report on their efforts in relation to fraud?
  Lord Mackay of Ardbrecknish: We are only able to produce the first and second sections of the report by getting statistical information from the local authorities and using the other information we have to try to work out an estimate within considerable margins of error—that is something which is never pointed out by the people who use the figures—about what we think the full take-up might be in contrast to the actual take-up. We work quite hard. I have explained the ways in which we gather the information we need. The local authorities also work hard in order to make people aware of the benefits and to encourage them to take them up. That is the proper way to deal with the matter, as I said on Tuesday.
  Baroness Hollis of Heigham: Perhaps the Minister had a bad supper. His reference to considerable margins of error which are never pointed out can be dealt with at some length. If the noble Lord checks his statistics against mine and the document, he will find that in most cases I took the median point of the Government's average range of variations. Where the range runs from 90 per cent. to 95 per cent., I have given a figure of 92 per cent., so I have tried to handle the figures at least as scrupulously as the statisticians.
  The Minister has not even faintly begun to address the report. Because he had a speech on the subject prepared for him last Tuesday he is not willing to engage with this issue, which is concerned with encouraging local authorities to maximise entitlement and in the process to report to Parliament. I am so disappointed at the irritable and bad-tempered way in which the Minister, unusually for him, has replied. I wish to test the opinion of the Committee.
  8.29 p.m.
  On Question, Whether the said amendment (No. 58) shall be agreed to?
  Their Lordships divided: Contents, 18; Not-Contents, 61.

  Division No. 3

  CONTENTS

  Addington, L.

  Gould of Potternewton, B. [Teller.]

  Alderdice, L.

  Carlisle, E.

  Grey, E.

  Carter, L.

  Hollis of Heigham, B.

  Clancarty, E.

  Kilbracken, L.

  Dubs, L.

  Morris of Castle Morris, L.

  Dubs, L.

  Redesdale, L.

  Ezra, L.

  Russell, E. [Teller.]

  Falkland, V.

  Turner of Camden, B.

  Farrington of Ribbleton, B.

  Whitty, L.

  NOT-CONTENTS

  Ailesbury, M.

  Henley, L.

  Allenby of Megiddo, V.

  Hindlip, L.

  Anelay of St. Johns, B.

  HolmPatrick, L.

  Astor of Hever, L.

  Keyes, L.

  Attlee, E.

  Kingsland, L.

  Balfour, E.

  Lindsay, E.

  Belstead, L.

  Long, V.

  Berners, B.

  Lucas, L.

  Biddulph, L.

  Lucas of Chilworth, L.

  Blatch, B.

  Luke, L.

  Brabazon of Tara, L.

  Lyell, L.

  Brigstocke, B.

  Mackay of Ardbrecknish, L.

  Brookes, L.

  Mackay of Clashfern, L.

  Brougham and Vaux, L.

  [Lord Chancellor.]

  Cadman, L.

  Mackay of Drumadoon, L.

  Chesham, L. [Teller.]

  Miller of Hendon, B.

  Clitheroe, L.

  Mountevans, L.

  Coleridge, L.

  Munster, E.

  Courtown, E.

  Onslow, E.

  Craigavon, V.

  Oppenheim-Barnes, B.

  Cumberlege, B.

  Park of Monmouth, B.

  Denbigh, E.

  Pearson of Rannoch, L.

  Denton of Wakefield, B.

  Renton, L.

  Dixon-Smith, L.

  Shaw of Northstead, L.

  Downshire, M.

  Skelmersdale, L.

  Feldman, L.

  Strathclyde, L. [Teller.]

  Ferrers, E.

  Trumpington, B.

  Goschen, V.

  Ullswater, V.

  Haddington, E.

  Vivian, L.

  Hardwicke, E.

  Wilcox, B.

  Harris of Peckham, L.

  Wynford, L.

  Resolved in the negative, and amendment disagreed to accordingly.
  8.37 p.m.
  [Amendment No. 59 not moved.]
  Clause 6 [Role of Audit Commission]:
  [Amendment No. 60 not moved.]
  Clause 6 agreed to.
  Clause 7 agreed to.
  Clause 8 [Directions by Secretary of State]:
  [Amendment No. 61 not moved.]
  Clause 8 agreed to.
  Clause 9 [Enforcement of directions]:
  Earl Russell Earl Russell moved Amendment No. 62:
  Page 15, line 34, at end insert—
  ("() Before serving any such notice, the Secretary of State shall consult the Audit Commission on the question whether the local authority was capable of achieving the specified standards of service without exceeding its capping limits.").
  The noble Earl said: This amendment asks the Secretary of State to consult the Audit Commission on whether an authority is capable of achieving the specified standards of service without exceeding its capping limits. We have heard about the demonising of claimants. I think that we should also think about the demonising of local authorities—and there has been a good deal of it in the past 18 years. There has been a good deal of blame heaped on authorities for not doing things which many people believe that the amount of money given to them would not have enabled them to do. The Minister is perfectly entitled to say that many people are mistaken—that has happened before and it will happen again—but the point of the amendment is not to say who is right; it is to get a competent and impartial judge of who is right, which might enable us to make a certain amount of progress on the subject.
  Again, if it does not happen in this way, it might happen in another way which the Minister would find less congenial. The question whether the amount of money given to a local authority is capable of being sufficient, if competently managed, to do the task set before it, is something which is liable to judicial review. Recently that was confirmed for me in a Written Answer from the noble Viscount, Lord Ullswater. It was a judgment of the court in a case involving Claycross Council. It did not uphold the claim on that occasion but ruled that the case was one of which it could perfectly properly take cognisance. If it is not to be done by the Audit Commission, it may be done through judicial review which in this case I believe is the less competent way of doing it.
  The Minister may refer to the money that is given to local authorities to fight fraud; but that money is top-sliced off an ordinary grant, so it does not increase the amount of money available but only earmarks a certain part of it. But that process of earmarking steadily diminishes the amount left over to everything else. Before everyone blames the local authorities for everything that they do, perhaps we should have some independent investigation. I beg to move.
  Lord Whitty: I rise briefly to support the noble Earl's amendment. I do so in defence of hard-pressed local authorities who in this area as in others find it difficult to reconcile the escalating demands of Parliament through statutory requirements and orders such as those envisaged in this clause with the increasingly rigorous financial restrictions placed upon them by Parliament. It is in the interests of central government and all of us that local authorities improve their standards, and it is the responsibility of local authorities to do so. However, as in other areas where Parliament imposes obligations on local authorities, there is real difficulty in complying with such an order if it leads to expenditure that so distorts local authority
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  budgets that capping limits are threatened. That is the contingency with which I believe the noble Earl is concerned. Local authorities then face the unenviable task of breaking one law or the other in the potential conflict between this clause and their responsibilities under local authority finance Acts.
  This is dangerous territory. My noble friend Baroness Gould and I in our former capacities used to tell Labour-controlled local authorities that whatever they did in their budgetary strategies, they should stay within the law. Occasionally their riposte to us was, "That is all very well; but which law should we break?" It is very dangerous territory because it creates a situation in local authority management in which the reputation of the law is called into question. We do not want to get into that kind of conflict. The amendment does not of itself resolve that conflict; it ensures that the DSS and the Secretary of State seek advice from the Audit Commission and other sources and takes into account the financial and legal implications of an order under this clause so that the Secretary of State can make a judgment accordingly. In certain circumstances there may be better ways of ensuring that performance is improved which do not involve the possibility of a local authority refusing or failing to comply with this instruction. For those rather more general reasons, I support the amendment.
  8.45 p.m.
  Lord Mackay of Ardbrecknish: Before I come to the details of the amendment, I should like to remind your Lordships of the current funding arrangements. Subsidy is provided by central government to meet the cost of administering housing benefit and council tax benefit, including measures to ensure the prevention and detection of fraud. In addition, local authorities may earn additional funds through the weekly benefit savings scheme. This can provide extra resources to be used against fraud, and many local authorities have achieved very good performance by targeting their resources and activities intelligently. Fraud overpayments identified by the local authority attract full subsidy, and in most cases the authority will be able to recover all or some of the amount overpaid. Elsewhere in the Bill we are making changes which will further improve authorities' ability to recover these overpayments. On top of this, there is provision for authorities to bid for moneys from the challenge fund where they are able to offer innovative schemes to tackle fraud. Thus, in addition to the direct saving to the authority from stopping fraudulent claims, further effort on fraud work can produce extra income. On the more general question of capping, it is for local authorities to ensure that the budget that they set enables them to meet their statutory duties. But in setting a cap which is reasonable, appropriate and achievable, account is taken of all the circumstances that an authority may face.
  I now turn to the changes to the procedures introduced by the Bill which the proposed amendment would make. The amendment appears to envisage that the issue of a notice that a determination is being considered and indeed that a direction on standards will be taken in isolation. This is not the case. There are

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  several stages during which account should be taken of the particular circumstances of a local authority and at which the authority will be able to put forward views.
  The report to the Secretary of State on the administration of housing and council tax benefit will cover the arrangements currently in place within the authority, including the measures taken to prevent and detect fraud. Recommendations in the report will reflect these and include practical steps that the authority can take to improve performance. The local authority will be given full opportunity to comment on the report. In putting forward proposals, it may include reference to any financial constraints. If the authority wishes to make representations on the resource implications of any recommendations and its impact on the timetable for improvement, it will be able to do so.
  Where a direction has been issued and the local authority has failed to attain the standards required notice that a determination is being considered will be issued. This will be a further opportunity for the authority to comment, in particular, on why a determination on standards on contracting out should not be issued. Any representations made about financial constraints would need to be borne in mind by the Secretary of State before making his decision. I add that to have to refer to the Audit Commission at that stage before any response has been received from the authority or the Secretary of State has decided on a determination seems to be a pointless administrative expense.
  I do not believe that this amendment is necessary to ensure that proper account is taken of the resources available to the local authority. It creates an unnecessary additional step in those cases where resources are not at issue. I hope with that explanation of how we envisage the system will work and that we believe the amendment would not help, the noble Earl will feel able to withdraw it.
  Earl Russell: Of course, I understand that the proposition that the level of public funding is sufficient is always a tautology. That has been the view of Ministers for a very long time. Whatever the level may be, whatever it is meant to do, in Minister's eyes it is always sufficient because it is the level. I also understand the Minister's comment that the Secretary of State will look at any issue that arises from this, and that he will consider whether the level of public funding appears to him to be sufficient, but in that the Secretary of State is judge and party in his own cause. Therefore, he is subject to a very severe temptation to believe that the funding is sufficient.
  I am grateful to the noble Lord, Lord Whitty, for his support. He made an excellent speech in which he said a great many things that I wish I had said. The point about "Which law shall I break?" is a very telling one. If one believes in respect for the law, as any drive against fraud must believe, it can only undermine the purpose if one spreads the idea that the law does not need to be obeyed. The Minister referred to the anti-fraud challenge fund. I thought he would. Does the Minister deny that the money which goes into that fund
  514
  is top-sliced from general finance? Therefore, it does not put any more money into local authority coffers; it simply enables one local authority to get a bigger share of the pie than another.
  The Minister's reply reminds me of a letter written by Sir Robert Walpole outlining his reasons for setting up Queen Anne's bounty. Your Lordships may remember that that was a pension for clergymen's widows. Sir Robert decided that he would create a certain number of these awards but they would not be sufficient to go round. Therefore he said that a clergyman's wife day and night, in season and out of season, would not cease to urge upon her husband the virtues of conformity. That is ministerial thinking in any generation. I shall not divide the Committee again so soon, but I confess that I have been tempted. I can occasionally resist temptation. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Earl Russell Earl Russell moved Amendment No. 63:
  Page 16, line 41, at end insert ("and").
  The noble Earl said: The amendment deals with the requiring of authorities to contract out. Amendments Nos. 63 and 64 are linked amendments. Amendment No. 63 adds the word "and". Amendment No. 64 removes the words "and accepting" from the list of what local authorities are obliged to do with contracting out. The provision requires the local authority to put services out to tender but it does not require the local authority in all circumstances, regardless of what bids it receives, to accept one of those tenders.
  Does the Minister believe in a free market? If he does, he must accept that a market cannot be genuinely free where one of the parties has to trade and the other does not. It is an extremely unequal negotiation which has taken place. I do not know how often the Minister has dealt with an auction house where a ring operated. One has rather low prices offered. That is precisely why auction houses in their wisdom have seen fit to put a reserve on property that they put up for sale. There is no provision in the Bill for the local authority to put a reserve on the contracting out of the services. If the Minister were prepared to provide for a reserve, he might rob my amendment of some of its force. I shall be interested to see whether he is prepared to do so. I beg to move.
  Lord Mackay of Ardbrecknish: It may be helpful if I explain the purpose of new Section 139G. This section is aimed at giving power to the Secretary of State to make enforcement determinations. Such determinations could be issued following a failure by an authority to attain the standards specified in a direction and where the authority had not offered any reasons why a determination should not be issued. Thus, it would apply in only the most serious cases, where, despite being given the opportunity to improve its standard of administration, an authority had failed to do so.
  The determination is designed to secure the attainment of the standards in question and, in order to achieve this, may also contain other provisions. These

  515
  include that the authority must comply with specified requirements as to inviting, preparing, considering and accepting bids to carry out the work. This is necessary as the general powers on competitive tendering would not apply in these circumstances and there has to be a means for setting up a mechanism to allow this to be done. This provision also aims to ensure that, in undertaking a tendering exercise following the issue of a determination, the local authority complies with whatever requirements the Secretary of State decides are necessary, including requirements as to the quality of person to take on the work, procedures to achieve this and, assuming persons of sufficient quality apply, that a bid is actually accepted.
  These amendments proposed by the noble Earl would have the effect of limiting the conditions which the Secretary of State is able to set out for the tendering process by removing the power to specify requirements relating to the accepting of bids. This would have the effect of removing all the teeth from this provision. It would allow an authority to pay lip service to the order to contract out by going through all the stages of the contracting process only to reject all of the bids out of hand or to award the contract to a bidder who could not provide the necessary effectiveness against fraud.
  We do not envisage that the power to order contracting out will need to be invoked often. And we do not envisage that the powers relating to accepting bids will be used to tell a local authority which bid to accept from those that provide an acceptable level of action against fraud.
  However, I think that it is important that we have the power and the teeth to make the system work effectively in the very small number of cases—hopefully, there will be no cases—where the authority is simply not prepared to take the steps which have been found to be necessary to be effective against fraud, and is going out to contract in a way which suggests that it is not looking for a bid which will give us an effective way of administering the system with the securities against fraud.
  I understand the noble Earl's reservations. They are those he normally has about powers of Secretaries of State. But if we are to envisage the possibility that a local authority refuses to accept any of the points made by the fraud inspectors, and refuses to make any changes, and we have to contemplate the next step of forcing the local authority to go out to tender, we have to ensure that it is looking for and accepting a tender which will carry out the criterion of being effective against fraud that we seek.
  I hope that, with that explanation, the noble Earl can withdraw the amendment.
  Earl Russell: Before I decide what to do with the amendment, perhaps I may ask the Minister one point of clarification. He referred to a local authority not giving reasons for its failure to reach a required standard. Did he mean failure to advance any reasons, or failure to advance reasons which appear sufficient to the Secretary of State?
  Lord Mackay of Ardbrecknish: I mean failure to advance any reasons. While I think it entirely theoretical,
  516
  one might envisage the reasons the local authority gives as being thoroughly inadequate, not proper reasons, and showing no indication that it intends to change the way it has been carrying out the system.
  We come back to all the discussions we have had. The local authority may give reasons which are reasonable and adequate and may suggest ways in which it might improve its system, as we discussed earlier. If those are reasonable reasons and it is making the necessary changes, the Secretary of State will accept that. We do not intend to force authorities to go out to contract willy-nilly. We wish to have this power only for those authorities which are obviously unwilling to take the necessary steps laid out by the fraud inspector.
  Earl Russell: Has the Minister any idea how arbitrary he sounds? Think about it the other way around. Think of it from the view of officers of a town hall. Think of them using the same sort of language. Think of them saying that the Minister shows absolutely no ability to change, that he shows absolutely no ability to do what needs to be done, that he shows absolutely no willingness to take account of the points made. Those officers have as much right to make those points as the Minister has to make his. They have a point of view too. We cannot know in advance which of those points of view will be correct.
  The Minister used the words that the local authority complies,
  "with whatever requirements the Secretary of State decides are necessary".
  What would he say if he were required to comply with whatever the local authority deems necessary? There are a great many things that a local authority deems it necessary for his department to do. I do not suppose for one moment that he will do any of them.
  We on these Benches complain frequently about over-centralised government. As the Minister says, we complain frequently about the powers of the Secretary of State. I have never heard quite such a barefaced defence of the Secretary of State's claim to enforce his own judgment as if it were infallible. When I rose I had absolutely no intention of asking the opinion of the Committee. But the Minister has really made me see red. I must do so. I ask the opinion of the Committee.
  8.59 p.m.
  On Question, Whether the said amendment (No. 63) shall be agreed to?
  Their Lordships divided: Contents, 17; Not-Contents, 60.

  Division No. 4

  CONTENTS

  Addington, L.

  Grey, E.

  Alderdice, L.

  Hollis of Heigham, B.

  Carlisle, E.

  Kilbracken, L.

  Carter, L. [Teller.]

  Redesdale, L

  Clancarty, E.

  Richard, L.

  Dubs, L.

  Russell, E. [Teller.]

  Falkland, V.

  Turner of Camden, B.

  Gould of Potternewton, B.

  Whitty, L.

  517

  NOT-CONTENTS

  Allenby of Megiddo, V.

  Kingsland, L.

  Anelay of St. Johns, B.

  Lindsay, E.

  Astor of Hever, L.

  Long, V.

  Attlee, E.

  Lucas, L.

  Balfour, E.

  Lucas of Chilworth, L.

  Belstead, L.

  Luke, L.

  Berners, B.

  Lyell, L.

  Biddulph, L.

  Mackay of Ardbrecknish, L.

  Blatch, B.

  Mackay of Clashfern, L.

  Brabazon of Tara, L.

  [Lord Chancellor.]

  Brigstocke, B.

  Mackay of Drumadoon, L.

  Brougham and Vaux, L.

  Marlesford, L.

  Cadman L

  Miller of Hendon, B.

  Chesham, L. [Teller]

  Monk Bretton, L.

  Clitheroe, L.

  Mountevans, L.

  Coleridge, L.

  Munster, E.

  Courtown, E.

  Onslow, E.

  Cumberlege, B.

  Oppenheim-Barnes, B.

  Denton of Wakefield, B.

  Park of Monmouth, B.

  Denton of Wakefield, B.

  Pearson of Rannoch, L.

  Dixon-Smith, L.

  Renton, L.

  Downshire, M.

  Shaw of Northstead, L

  Feldman, L.

  Skelmersdale, L.

  Ferrers, E.

  Strathclyde, L. [Teller.]

  Goschen, V.

  Trumpington, B.

  Haddington, E.

  Ullswater, V.

  Hardwicke, E.

  Vivian, L.

  Harlech, L.

  Wharton, B.

  Harris of Peckham, L.

  Wilcox, B.

  Henley, L.

  Willoughby de Broke, L.

  HolmPatrick, L.

  Wynford, L.

  Resolved in the negative, and amendment disagreed to accordingly.
  9.7 p.m.
  [Amendment No. 64 not moved.]
  Clause 9 agreed to.
  Clause 10 [Adjustment of subsidy]:
  Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 65:
  Page 18, line 6, leave out from ("order") to end of line 9.
  The noble Baroness said: We are hoping for the usual answers of sweetness and light which until recently we had come to expect from the Minister. In moving Amendment No. 65, I shall speak also to Amendment No. 68. They would remove the power of the Secretary of State to deduct amounts from the subsidy paid to local authorities for the cost of housing benefit and council tax benefit administration. We are concerned about the gradual withdrawal of government subsidy for benefits administration. We also doubt whether the deduction of subsidy is a sensible way to improve local authority anti-fraud performance.
  We believe that local authorities' attempts to tackle fraud are hampered by inadequate levels of benefit subsidy paid by government. When local authorities took over the administration of housing benefit and council tax benefit from the DSS it was on the understanding that the cost of local authority administration would be fully met. However, over the period 1991–92 to 1995–96 total central government subsidy provision for the administration of costs for English authorities has averaged only two-thirds—65 per cent. or thereabouts—of actual costs. In 1996–97, the provision of £261 million from central government
  518
  compares with local authorities' estimates of actual costs of £419 million. Accordingly, local authorities now meet £160 million of the administration of those benefits from the general fund compared with just £32 million in 1988–89. Only half of the subsidy provided is distributed direct to authorities in the form of a specific grant. The other half is fed into revenue support grant.
  The effect is that authorities as a whole receive only one-third of their costs in specific grant. As many local authorities are close to their capping levels, a matter we explored in the previous amendment, any additional spend on administration must be at the expense of other services. The answer to that under-funding is to implement the Audit Commission recommendation, made in 1993 in its report on housing benefit, that all support for local authority benefit administration costs should be distributed by a specific grant. That would be neutral in terms of public expenditure. However, we still do not know why—and perhaps the Minister in his new sweetness and light mood will tell us—there has been a consistent refusal to make that change.
  The second concern is that the anti-fraud incentive scheme allows authorities to earn additional subsidy by meeting government-set targets for the detection of fraud. The problem with that is that it concentrates on the amount of fraud actually detected. Therefore, it acts as a disincentive for authorities to take preventive measures to avoid fraud in the first place. Indeed, local authorities which have good preventive measures in place, and therefore less fraud to detect, may very well face a subsidy penalty for not detecting fraud that does not exist.
  The DSS has established an anti-fraud challenge fund which allows authorities to compete for funds to finance anti-fraud initiatives. The problem is that the £5 million allocated to that has merely been top-sliced from existing funds. That adds to the difficulties of local authorities. The local authority associations are particularly concerned about the power in the Bill for the Secretary of State to make deductions from subsidy payments to local authorities for poor performance. Deducting subsidy from poorly performing authorities will serve only to make it more difficult for them to make improvements. The Minister really must not treat local authorities like delinquent teenagers who, they believe, need a short sharp shock to bring them up to scratch.
  We await the Minister's reply. However, we believe that if central government want local authorities to respond, this is an area in which the carrot is infinitely more valuable than the stick because we share a common objective. The Government are in danger of subverting their own ends. I beg to move.
  Earl Russell: I have two questions for the Minister. First, will he confirm that the Audit Commission is correct in believing that if all the money to local authorities for administering housing and council tax benefits were paid via a specific grant, that would be cost neutral? Is that the view of the Treasury as well as that of the Audit Commission? Secondly, what is to

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  happen to a local authority with exceptionally honest citizens which does not have enough fraudsters to meet its target?
  Lord Mackay of Ardbrecknish: Clause 10 re-states and makes additions to the Secretary of State's powers to adjust the subsidy paid to local authorities for housing and council tax benefit by introducing amendments to Section 140B of the Social Security Administration Act 1992. In particular, it qualifies the circumstances and manner in which deductions from subsidy must be made.
  Perhaps I may describe briefly the existing power relating to deductions from subsidy and its application and the intention of the additional power introduced by Clause 10, additional powers which the noble Baroness's amendment seeks to remove. The Social Security Administration Act contains a long-standing provision for the Secretary of State to deduct from the subsidy which would otherwise be payable to an authority any amounts which he considers it unreasonable to pay. The power has been used administratively over the years to claw back from local authorities amounts of subsidy which have been or would otherwise be overpaid. Examples are where there has been an error in an earlier subsidy claim and it comes to light that the authority has incurred unlawful expenditure or has claimed subsidy twice on the same expenditure. This general power is restated in the proposed new subsection (5)(b) of Section 140B of the Social Security Administration Act, which is inserted by Clause 10. It would be removed, of course, by the second of these amendments.
  The new powers relating to deductions are intended to clarify the existing general power. New subsection (4)(b) of Section 140B inserted by Clause 10 provides for deductions to be made in the annual subsidy in respect of matters other than expenditure on benefits; for example, incentive schemes. The proposed new subsection (5A) makes it clear that the powers to deduct are general and include instances where an authority has failed to comply with a direction or has failed in some other way to prevent and detect fraud.
  Amendments Nos. 65 and 68 would together remove not only the Secretary of State's power to make deductions from subsidy in the case of poor fraud performance but also the general power to make deductions which is fundamental to the housing and council tax benefit subsidy regime. The removal of the power to make deductions would leave the Secretary of State powerless to provide in the subsidy order for deduction of subsidy in specified circumstances or to recoup questionably paid subsidy or to decline to pay dubious claims. I am sure that it is not the intention of the noble Baroness to remove an essential safeguard to the public purse, but this would be one of the effects.
  Amendment No. 66 seeks to add a further example of circumstances in which additional subsidy may be paid; that is, for success in meeting performance targets for clearance and accuracy in administration of benefits. However, it is not necessary to include these further examples. Local authorities can and do receive additional subsidy in these circumstances and that will
  520
  continue. The amendment would not permit any payment to local authorities by the Secretary of State that he cannot already make under the existing powers.
  In addition, the Committee may be aware that my department is currently conducting research and carrying out tests in a range of local authorities on the feasibility of introducing a framework of minimum standards for verification, accuracy and clearance times. In the light of the research and test results we shall consider what adjustments may be needed to current funding arrangements to take account of the introduction of such a framework. Any extra subsidy that might be payable as a result of authorities meeting the standards could be paid under provisions in this Bill or provisions already in existence.
  Amendment No. 67 seeks to remove some, but not all, of the Secretary of State's powers to pay additional subsidy.
  Baroness Hollis of Heigham: I am sorry, it is possibly my fault but, in introducing the group, I spoke only to Amendments Nos. 65 and 68. I was expecting my noble friend Lady Turner to move Amendment No. 66, and no doubt the noble Earl, Lord Russell, wishes to speak to Amendment No. 67. If I have caused any inconvenience to the Minister, I apologise, but I thought that perhaps he had registered that.
  9.15 p.m.
  Lord Mackay of Ardbrecknish: I am afraid I had not registered that, but if in fact the noble Baroness is saying that she is speaking only to Amendments Nos. 65 and 68, I have probably already dealt with them.
  Earl Russell: I am grateful to the Minister. Amendment No. 67 is grouped with these amendments. The points I made were intended to relate to Amendment No. 67 as well as to Amendment No. 66. So if the Minister has a reply to Amendment No. 67, I would be grateful to hear it.
  Lord Mackay of Ardbrecknish: I thank the noble Earl for that. The effect of Amendment No. 67 would be to remove some but not all of the Secretary of State's power to pay additional subsidy. In particular it seeks to remove the power for the Secretary of State to reward success in preventing or detecting fraud. The provisions that the noble Lord seeks to amend enable the Secretary of State to invite applications for additional subsidy specifically for the purposes of prevention and detection of fraud. I am sure the Committee agrees that the Secretary of State should, if he deems it appropriate, be able either to reward local authorities that have been particularly successful in their fight against fraud or invite local authorities to consider new and cost-effective approaches to tackling fraud; moreover, he should be able to provide any such funding for these new measures on a statutory basis. The powers provided within Clause 10 provide just that.
  The noble Baroness asked about the deduction power on administration costs. The power is not purely an administration cost. The amendment removes all powers to deduct, so all the provisions dealing with improper expenditure would be struck down. That is the point.

  521
  The noble Earl mentioned challenge funding being top-sliced. The challenge fund this year and next year includes new money, so it is not all top-sliced from the overall local authority administrative budget. But, of course, it remains within the total budget which the Government have set out and the total public expenditure plans we have already set out and which, I understand, at least the party sitting exactly opposite me—although, I accept, not the party of the noble Earl—have said will be more than sufficient for them for the next two years. I am not entirely sure that I was hearing the noble Baroness correctly. I am sure that she did not mean to make her original remarks sound like a promise to increase the funding going from central government because, of course, that would be incompatible with the views of her right honourable friend Mr. Gordon Brown, who has said that he will stick to the Government's spending plans.
  Baroness Hollis of Heigham: That should cheer up the Minister enormously.
  Lord Mackay of Ardbrecknish: It does cheer me up enormously, as indeed it cheers up my right honourable friend the Chancellor to have such endorsement of the Government's spending plans for the next two years. We are deeply grateful for the approval of the shadow Chancellor. If the shadow Chancellor agrees that our spending plans are perfectly all right, there does not seem to be any point in changing the person who holds the office of Chancellor of the Exchequer in the events which are about to happen in the next month or so. However, I must not be drawn into that because, as I have reminded myself—the noble Earl will remind me if I do not—we do not have a vote and therefore there is no point in electioneering here.
  Earl Russell: I was merely asking the Minister to qualify what he said about there not being a case for changing the Chancellorship. What his words logically imply is that there is no point in changing it in that direction. That is all that they imply.
  Lord Mackay of Ardbrecknish: I must always be careful about the noble Earl. I am happy to say that I have no little stories to tell about a man going to Ipswich or coming from Ipswich. What I meant—I am sure everyone understood—is that I thought my right honourable friend the Chancellor was doing such a splendid job, endorsed by Mr. Gordon Brown, that my right honourable friend should continue in office after the general election. However, as I said, there is no point in electioneering in this Chamber.
  Over recent years the adjustments to subsidy have had a dramatic effect in influencing local authorities' attitude to anti-fraud work. The ability to adjust subsidy has led to greater effectiveness but there is still much to be done. The noble Baroness never ceases to tell me about the amount of fraud she thinks is going on as regards housing benefit. While I think the figure is about £1 billion, she thinks it is double that. If she is more correct than I am, that is all the more reason why we
  522
  should take the powers which exist in this Bill to tackle the matter, and it is all the less reason to believe that somewhere there is an authority which is so virtuous that it has no fraud at all perpetrated against it. I do not believe that such an authority exists.
  I think that the general administration subsidy of local authorities is intended to cover the actions for which they are responsible in assessing benefit and preventing and detecting fraud. It is worth noting that incentive payments for fraud detection are also available for detection at the outset of claims; in other words, the prevention point to which the noble Baroness referred. Challenge funding can be made available for prevention measures. Therefore the measure is not just related to the amount of fraud that is detected. I hope that I have answered the various points that have been made. I invite the noble Baroness and the noble Earl not to pursue their amendments.
  Earl Russell: With respect I do not think the Minister has quite answered my question about the local authority without enough fraud. I agree it is difficult to imagine an area with no fraud but it is not quite impossible. Also, we have here something which is quantified. If one local authority detects less fraud than another, is it not just possible that it might be because there is less fraud being committed in the area of that local authority? Can the Minister eliminate that possibility? I do not know whether he was in the Chamber when the noble Lord, Lord Boyd-Carpenter, asked the noble Viscount, Lord Astor, who was then speaking from the Dispatch Box, how the Government knew the total of undetected fraud. That question deserves an answer and the noble Lord, Lord Boyd-Carpenter, did not get one. I should be glad if I were luckier.
  Lord Mackay of Ardbrecknish: I referred to a figure of £1 billion worth of fraud and the noble Baroness thinks the figure is £2 billion. Against that background it is a little academic to believe that there is one local authority in the country which does not suffer any fraud perpetrated against it. It would be fortunate if that were the case; but I have indicated that incentive payments for detection are available for effective prevention. Clearly, such an authority would be effectively preventing fraud. If the steps it has taken lead to extra costs, it would be eligible for consideration for incentive payments and for challenge fund payments.
  I can see that some way down the road, once we have managed to reduce the fraud considerably, we may have to look at other ways. But for the moment I see no reason why the incentive arrangements need adjustment. If they need adjustment, that can be taken into account when we look at the verification standards a local authority has in place which are succeeding, as the noble Earl prophesied, in bringing down fraud and preventing it. Those verification standards and verification procedures will be eligible for assistance to keep them in place, because clearly it is in our interests to keep them in place. We have also to guard against an

  523
  authority which says, "There is no fraud here". Why there is no fraud there is because it is not looking very hard.
  Earl Russell: But does the Minister understand that those incentives may be—in the words of the first Lord Burghley about the High Commission:
  "Rather a device to seek for offenders than to reform any"?
  Is that not a financial inducement to find fraud regardless of how good is the evidence? Is it not very near partaking of the character of a corrupt payment?
  Lord Mackay of Ardbrecknish: I do not believe that it is. The noble Earl is perhaps just pushing his argument a little too far. The fraud inspector's report on an authority would be one source of information, and if that report showed that that authority was running a splendid system and keeping on top of fraud, some of the procedures it had in place could be eligible for the payments I have mentioned—either the challenge fund payments or the other incentive payments. I can see the noble Earl's point. I should like to think—and I shall certainly check it—that an authority in that halcyon state will not find that the Government are not giving it any money to continue in the halcyon state.
  Baroness Hollis of Heigham: At the end of his first reply the Minister said that he hoped that he had answered our questions. It would be fairer to say that he had addressed them rather than answered them. I accept that the amendment as drafted is defective, and so I am sure that the Minister will be delighted to know that it is not one that I intend to press.
  The sustained point is I believe that the Government have developed a flawed method of supporting the administration of benefits and a deformed method of financing the eradication of fraud. The Government have constructed a system some of whose consequences are quite perverse. Some of them have been mentioned. I recall a couple of months ago bringing to this place one of the rural authorities. I cannot remember now whether it was Mendip or Chilterns. It complained that it had been complimented by the Audit Commission, and the like, on its efforts to eradicate fraud. In consequence therefore it faced a benefit penalty, because there was not the fraud there for it to uncover, as it had already set in place exemplary methods of preventing it from occurring.
  Another perverse effect which has been touched on by the Minister—again local authority associations are worried about this in terms of the integrity of the public ethic—is that local authorities now have an active incentive to turn error into fraud both to meet their targets and to avoid repayment, and instead to claim subsidy. If something is an error, local authorities do not receive compensation for it. If they can turn that error into fraud by making it culpable, they do. Those are unhealthy pressures on hard-pressed local government officials where it is often the word of one person—"I did put my form in on such-and-such a date. I did so honestly"—against the word of an official. In good local
  524
  authorities those issues go to members to resolve, but there will now be a perverse incentive to short-cut them. That is worrying.
  As to the wider point regarding the position of a potential Labour government, I say nothing about the potential head space offered by recovering more fraud savings than the Government have so far identified. Think what one could do with the £1 billion to which the Minister repeatedly referred.
  The whole method of financing this form of activity has to be reconstructed. Within the same spend figure, it could be made to deliver more effective and less perverse results than the Government have so far achieved. I am confident that that is what we shall seek to do. I beg leave to withdraw the amendment.
  amendment, by leave, withdrawn.
  9.30 p.m.
  Baroness Turner of Camden Baroness Turner of Camden moved Amendment No. 66:
  Page 18, line 15, at end insert ("or
  (c) success in meeting such performance targets for clearance and accuracy in the administration of benefits as may be prescribed.").
  The noble Baroness said: The Minister to some extent pre-empted this amendment by replying to it in addressing previous amendments—but not entirely. The purpose of the amendment is to allow regulations to provide for an extra subsidy for better administrative performance. I emphasise that that does not mean just the detection of fraud.
  The housing benefit and council tax benefit regulations state that benefit should be processed within 14 days wherever possible. We have discussed the 14-day period in relation to other amendments. Regulations or amendments to the subsidy order could be made to allow additional subsidy to be paid where authorities meet that target over a consistent period and could also include a target for accuracy.
  The amendment could act as a carrot to good administration. That is its intention. It would minimise the opportunity for fraud and at the same time reward authorities that are proceeding with a very good administration in the area of benefits generally. I beg to move.
  Lord Mackay of Ardbrecknish: As I explained, this clause makes changes to Section 140B of the Social Security Administration Act 1992, under which the Secretary of State pays subsidies to local authorities in respect of their expenditure on housing benefit and council tax benefit.
  Subsections (4)(a) and (4A) inserted into that section by Clause 10 re-enact the Secretary of State's power to pay additional subsidy to local authorities in circumstances that are to be specified in the subsidy order. Subsection (4A) gives two examples of what that additional subsidy could be paid for; namely, the costs of administering the relevant benefit, and in respect of success in preventing or detecting fraud.

  525
  The proposed amendment seeks to add a further example of circumstances in which additional subsidy may be paid—that is, for success in meeting performance targets for clearance and accuracy in administration of the benefits.
  It is not necessary to include these further examples as local authorities can, and do, receive additional subsidy in these circumstances, and that will continue. The amendment would not permit any payment to local authorities by the Secretary of State that cannot be made under existing powers.
  In addition, my department is currently conducting research and carrying out tests with local authorities on the feasibility of introducing a framework of minimum standards for verification, accuracy and clearance times. When we receive those research and test results we shall consider what adjustments might be needed to the current funding arrangements to take account of the introduction of such a framework. Any extra subsidy that might be payable as a result of authorities meeting the standards could be paid under the provisions of this Bill or provisions that already exist without the further assistance of the noble Baroness's amendment. In short, the amendment is not necessary. With the assurance that what she wants is capable of being done already, I hope that the noble Baroness might withdraw her amendment.
  Baroness Turner of Camden: I thank the Minister for that explanation and also for the assurance that what I seek in the amendment can already be done. I shall read his earlier remarks carefully in Hansard tomorrow. But in the meantime, I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  [Amendments Nos. 67 and 68 not moved.] Clause 10 agreed to.
  Lord Whitty Lord Whitty moved Amendment No. 69:
  Before Clause 11, insert the following new clause—
  REFUSAL OF PAYMENT OF HOUSING BENEFIT TO LANDLORD
  (".—(1) In any case where—

  (a) a person has claimed housing benefit and requested or consented to payment of housing benefit to another person; or

  (b) a person is in receipt of a payment of housing benefit on behalf of another person,

  an authority administering housing benefit may refuse to make such a payment or continue to make such a payment, as the case may be, in the circumstances mentioned in subsection (2) below.
  (2) The circumstances referred to in subsection (1) above in which an authority may refuse to make a payment of housing benefit or to continue to make such a payment are—
  (a) in the case of paragraph (a) of that subsection, where it is satisfied that—

  (i) the person to whom the payment is to be made is not the landlord under the tenancy in respect of which the request was made or consent given; or

  (ii) such a tenancy does not exist; or

  (iii) that the person to whom the payment is to be made is or has at any time been in receipt of housing benefit as a result of fraud; and

  526
  (b) in the case of paragraph (b) of that subsection, where it is satisfied that the person in receipt of the payment is in receipt of a payment of housing benefit as a result of fraud.").
  The noble Lord said: The proposed new clause and the amendment that follows bring us to one of the central areas where we feel that the legislation has a serious deficiency. It is in dealing with the widespread problem of landlord fraud.
  The amendment paves the way to recognition of a specific offence, but it does not depend on such an offence being created. The next clause deals with that. This clause could apply with the offences already existing and those created by the Bill. Therefore, I shall move the amendments separately.
  Amendment No. 68 recognises that, in a large number of cases identified as the main location for housing benefit fraud by the Select Committee of another place, it is not an individual claimant but a third party—a landlord, a hotelier, an accommodation agent—who creates the fraud. In some cases that is done with the connivance of the individual claimant, in other cases it is done completely without such connivance and in ignorance on the part of the alleged claimant. It can be a deception involving just one single case or it can be a multiple and criminally organised fraud of substantial proportions.
  In the discussion on the Bill in another place, there was at least some grudging recognition by Ministers of the importance of landlord fraud and the need for special measures to deal with it. Clause 11 was introduced at a rather late stage in the Commons proceedings in response, I should like to think, to the eloquent arguments of my colleagues there. But it is the only explicit recognition that there is a separate and different problem of landlord fraud.
  However, Clause 11 is not sufficient to deal with it. It deals only—though importantly—with the information that may be required of landlords receiving direct payment of housing benefit. It does not deal with powers against their involvement and engagement in fraudulent activities. It still seems somehow to be assumed, despite all the evidence in the Select Committee report in another place and elsewhere, that the other powers in the Bill which are directed primarily at individual claimants are sufficient to be used against landlord fraud. But they are not sufficient. The amendment deals with the circumstances: situations where the alleged landlord is not the landlord; situations where the alleged tenancy does not exist; situations where the recipient of direct payment has previously been found to be in receipt of fraudulently claimed benefits. It allows the authorities to stop and suspend payment in such cases. Such an authority which, on receipt of information, refuses or ceases to make direct payments to the landlord, may still be required to pay to the individual claimant, if the application is genuine and valid.
  The wording of the new clause is similar to that in the London Local Authorities Bill, which I understand received its Second Reading in this House last night. I regret that I could not be present for the debate. That Bill envisages a comprehensive package of reforms to

  527
  tackle the whole problem of landlord fraud. It would give local authorities the power to require landlords who ask for housing benefit to be paid direct to supply them with details of other properties that they control. It would be a stronger power than the permissive power in Clause 11. It would require them to maintain a register of landlords and also provide what the proposed new clause would demand: an ability to refuse payment to landlords because authorities believe that they are involved in fraudulent claims. That is a more robust and effective approach than is reflected in this Bill. It would also, in my view, protect legitimate and decent landlords from association with some of the practices that have grown up in this area.
  I submit that this amendment goes some way in that direction. It is true that the Minister's colleagues in another place conceded some of the principles underlying the approach. Ministers there argued that primary legislation was not necessary. However, they undertook to come forward with changes in the regulations that govern the making of direct payments to landlords and in the guidance that is given to local authorities in the circumstances where direct payment can be made. It would be interesting for the Committee to hear what progress has been made on revising those regulations. But I have to say that, unless and until the Minister can promise watertight regulations to deal with the issues and provide for such powers, I remain unconvinced that the problem has been dealt with without the heavier primary legislation provided for in the amendment. I beg to move Amendment No. 69.
  Lord Mackay of Ardbrecknish: This amendment seeks to allow local authorities, as the noble Lord, Lord Whitty, has just explained, to refuse or stop payments of housing benefit being made directly to a person other than the claimant, the landlord or indeed, I assume, his agent in certain circumstances. The circumstances are: that the proposed recipient of the direct payment has no title to let the property; that there is no such tenancy; or that the proposed recipient is or has at any time been in receipt of benefit as a result of fraud. For many of those housing benefit at present cannot be paid. Moreover, any current recipient of direct payments could have such payments discontinued if the authority is satisfied that he is in receipt of payment of housing benefit as a result of a fraud.
  I understand the intentions behind the amendments. Equally, I myself was not able to be present last night when the London Local Authorities Bill was discussed, as I had another engagement. But I know that there is similarity between some of the provisions in some amendments that we have been discussing and some of the provisions in that Bill. So I understand the intentions.
  Direct payments can cause difficulties. They can make it easier for landlords, and indeed for both landlords and claimants, to commit fraud. My officials have consulted representatives of the local authority associations to identify specific problems with the direct payment provision and to see how they can be put right. We have found that most of the problems that they raised with us can be tackled by amending current
  528
  secondary legislation. Indeed, as the noble Lord, Lord Whitty, acknowledged and as was indicated by my honourable friends in another place, we propose to amend that secondary legislation and to issue circulars to make the situation clear to the local authorities.
  But I want to make it clear, if I can, that in almost all cases there is no obligation on local authorities to make direct payments. A major factor contributing to the difficulties that local authorities have with direct payments is that many believe that they are under such an obligation. The department will issue clear guidance to the effect that local authorities are not generally under any obligation to make direct payments to landlords unless claimants are substantially in arrears with their rents. In addition, my right honourable friend the Secretary of State is currently consulting with local authority associations with a view to proposing amending regulations to deal with three specific issues.
  Baroness Hollis of Heigham: I wonder whether the Minister will mind my interrupting him at this point. I take the point that he has just made that the department intends to issue clear guidance showing that local authorities are not obliged to make direct payments. But the research commissioned by his own department, undertaken, I think, by Dr. Kemp, which I have read and studied, makes it clear that increasingly landlords require direct payments as a condition of accepting a DSS tenant. What would be the Minister's advice in such a situation?
  Lord Mackay of Ardbrecknish: It would rather depend on the suspicions that the local authorities might have. For example, the local authorities must in law be satisfied that the landlord is indeed the landlord and that the tenancy does indeed exist, before they pay any housing benefit. If they are not satisfied that the tenancy does exist, they should not pay anybody—either landlord or, obviously, tenant. That is a very clear provision.
  So far as concerns direct payments—I believe it will certainly answer the point of the noble Lord, Lord Whitty, and I hope that it will help the noble Baroness—a circular has been drafted. I understand that it is now with the local authorities association as part of the statutory consultation that we have to undertake. That consultation is planned to end on 15th April 1997.
  But I mentioned three specific issues at which we are looking. The first proposal will enable an authority to require a landlord to produce any necessary information in connection with the specific benefit claim. That might include evidence of his legal right to let the property.
  The second proposal is for a discretionary power to refuse or terminate direct payments where an authority is satisfied that the recipient is not a fit and proper person. For example, an authority could refuse to make a direct payment to a landlord who had a record of obtaining benefit by deliberate fraud. It could equally decide to exercise its discretion to make a direct payment where, despite the landlord's history, such an arrangement was the only means of safeguarding the tenancy, although in such a case the authority would be

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  expected to introduce safeguards to minimise the risk. That may go a little way to answer what I thought was the question posed by the noble Baroness.
  The third proposal we are discussing would require local authorities to ignore rent arrears which are incurred while a claim or a change of circumstances is being determined. This would mean that authorities would not be obliged to make direct payments in such cases, removing what amounts to a perverse incentive to a fraudulent landlord to force a delay in the determination of a claim.
  All the proposals I have outlined are being brought forward under existing legislation—and I hope answer satisfactorily the points raised by the amendment—without requiring a new primary power or producing the counterproductive results of the proposed amendment. We are discussing some of these matters with the local authorities. Others are in the circular which has been drafted and which is with the local authorities for consultation.
  I hope that those assurances and indications of progress will help the noble Lord, Lord Whitty, to withdraw his amendment in the confidence that we are taking serious steps along with the local authorities in order to help the local authorities deal with the question of landlord fraud.
  9.45 p.m.
  Lord Whitty: I am grateful to the Minister for his reply. It goes some way towards reassuring me that these issues are being tackled. However, his reply does not deal with the central point. I am well aware, as I am sure are most local authorities, that they are not obliged to make direct payments to landlords in any circumstances. They have the discretion not to. However, the reality is that local authorities are faced with the fact that landlords are telling their tenants or potential tenants that unless they are given direct payments the tenants will not get the lodgings. In those circumstances it would be a serious problem for local authorities to insist on payment to a tenant if the landlord said that he would not then take him on. The question of the power relationship between a tenant and the landlord is involved here and is perhaps best dealt with by the subsequent clause.
  However, I am more pleased than I expected to be that some progress has been made since the deliberations in another place on the redrafting of these regulations and consultation with the local authorities. In the spirit of goodwill and understanding, I am prepared at this stage to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Lord Whitty Lord Whitty moved Amendment No. 70:
  Before Clause 11, insert the following new clause—
  OFFENCE OF FRAUD BY LANDLORD
  (".—(1) If a person—

  (a) dishonestly produces or furnishes or causes or allows to be produced or furnished to any authority administering housing benefit or council tax benefit or to a person authorised to exercise any function of such an authority
  530
  relating to such a benefit, any document or information which is false in a material particular as to persons resident in accommodation owned, managed or controlled by him or in which he has any form of proprietary interest; or

  (b) fails to notify or causes or allows another person to fail to notify any authority administering housing benefit or council tax benefit, or a person authorised to exercise any function of such an authority relating to such a benefit, of any change of circumstances as to persons resident in accommodation owned, managed or controlled by him or in which he has any form of proprietary interest,

  with a view to obtaining any benefit or other payment or advantage (whether for himself or for some other person) derived as a result of more than one claim to benefit, he shall be guilty of an offence.
  (2) A person guilty of an offence under this section shall be liable on conviction on indictment to imprisonment for a term not exceeding 10 years, or to an unlimited fine, or to both.").
  The noble Lord said: I apologise to the Committee as I may have to take some time in explaining the amendment. We found in another place that Ministers have not taken the point on this issue. I therefore have to restate the arguments. We on these Benches have given strong support to the objectives of the Bill. We have not always shared the rhetoric that surrounds it but we are determined to play our part in bringing an end to fraud in the social security system. However, if the Government are so keen to tighten up on payment fraud, I cannot understand why Ministers are resisting the obvious parallel but separate problem of tackling criminal landlord fraud, which creams off both the welfare state and genuine claimants. Indeed, it often goes beyond that and exploits vulnerable people who for one reason or another are outside the national insurance system.
  I have read carefully the report of the Select Committee of another place on these issues. It concludes that a large proportion of fraud in the housing benefit area is located in landlord fraud in the private rented sector. It quotes numerous examples. The sample survey carried out by the London Borough of Haringey revealed that no fewer than 21 per cent. of such claims were fraudulent in one way or another. Lest the Committee assumes that this is a problem of Labour local authorities, perhaps I may also draw attention to a submission to the Select Committee by the fair City of Westminster, which gave a trenchant analysis of the problems in its area, particularly with fraud by hoteliers.
  I have also read carefully the proceedings on the Floor and in Committee in the other place on this Bill. There seems to be an extraordinary defensiveness about Ministers' responses here. That suggests that they, and maybe civil servants at drafting level, are being a little complacent or maybe they are living in a world of ignorance as to what is going on. We have already been warned that we should not electioneer in this Chamber. There is no point in doing so, which is rather a different matter. I do not want to undermine the efforts of my colleagues in other places to make sure that the Labour Party is seen as a party which represents the whole of the country.
  But I am forced to be a little bit "classist" and "regionalist" about this. There seems to be a feeling that this is a problem only of the inner cities. In fact, the Select Committee report proves exactly the opposite. It is a problem for small towns and the shires which for at

  531
  least another couple of weeks the party opposite purports to represent. Some of the worst examples are in those areas. Some of the criminals engaged in these activities are moving out of London and other cities because they are finding that life is too tough for them because of the way in which London local authorities and others are beginning to tackle these problems.
  But even if we concentrate on the inner cities, this is a crime which is well understood. The DSS civil servants in the offices down the line understand it; the benefits staff of the local authorities understand it and are horrified by their inability to tackle the problem effectively. The police know of it and it is often a problem for them. The social services know of it and the general public also know it.
  Until recently I lived for 20 to 25 years in south London. There is just as much tittle-tattle in the shops and pubs of south London about the existence of criminal fraud by landlords as there is about individual claimants who cream off the system. Moreover, there is also recognition at that level that the crimes are different. Ministers in the other place argued that far from there being only one clause in this Bill dealing with landlord fraud, in fact there are eight separate powers in it to tackle the problem because it is caught by the provisions in the Bill for individual fraud.
  That is erroneous. It seems that the only rationale for the Government's position is that they regard landlord fraud as a secondary offence. By that I do not mean that they do not regard it seriously, but they see it as a connivance at individual fraud rather than fraud of itself. In fact, it is a massive conspiracy and often an organised one against the public purse and often against claimants. It is massive exploitation both of genuine claimants and by people who are used in these scams who purport to be claimants. At the Second Reading debate I used the term "scam" and then I corrected myself because that was too cosy a term.
  Some landlord fraud deals in petty connivance and individual deception; but we are often dealing with something which is far more sinister. The police understand that they are dealing with a continuum of crime here, such as immigration rackets, overcrowding and unsafe dwellings and protection rackets. These are crimes of the unofficial economy and therefore they are quite difficult to catch up with. But in this Bill we are dealing with the point where we should most easily be able to catch up with it; namely, the point where criminals gain their money directly from the state.
  These facts are known from the cases reported, from anecdotes and statistics. They were revealed very clearly in the report of the Select Committee. They all show that this is a rapidly growing problem. We can all have views as to why that is happening. There are some underlying social problems which go towards it. In many of the inner city areas and in our smaller towns, the housing market has become seriously distorted. There has been no new building for public housing and availability is limited and inadequate. There has been family break up, migration and the atomisation of households. Owner-occupation is not an option for a very large number of these people. Even the jerry-built
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  flats built in the 1980s are beyond their purse. The private rented sector has been deregulated and now has rents which are often beyond the purse of the people we are talking about. This is a potential recipe for disaster and is already occurring.
  When direct payment to landlords of housing benefit was first introduced, the assumption was that the hulk of such payment would be to public sector landlords or social landlords like housing associations. However, with the decline in public sector housing and the rise in rents in the private as well as the public sector, that is no longer entirely the case. Direct payments now account for over one-third of all payments, and that proportion is estimated to rise to one-half, yet that one-third of payments accounts for two-thirds of the fraud. Direct payments have been growing as a proportion of all housing benefit and the share to private landlords is growing. Control and monitoring are therefore primarily problems in the private sector. However, there have been a few instances of local authority officials being involved in organising and/or conniving at organised housing benefit fraud. Obviously, such individuals should be ruthlessly prosecuted; but the main issue is how to control fraud in the private sector.
  What form do the scams take? The amendment partly reflects this. Landlords claim for tenants who do not exist, often using national insurance numbers which have been obtained from non-claimants by illegal purposes or deception. Tales were even told in the Select Committee and are recorded in the proceedings of another place of dossers in one part of London being paid £10 for their national insurance numbers which were then used in another area. It is clear from the Select Committee report that national insurance numbers alone do not offer sufficient protection against such fraud. There are cases of where the alleged tenant exists, but there is no dwelling—or of where there is a dwelling, but no tenant. There are cases of where the alleged tenant once existed and once lived at that property but moved out a long time ago. There are cases of where the alleged tenants exist but claim for dependants who do not exist, or who do not live there, or who have not lived there for some time.
  There are also hotel frauds. I have already referred to the very telling report from the City of Westminster, which shows how hoteliers in such areas take advantage not only of potential claimants and others, but also of the social security system.
  There are also cases of cheques being made out to genuine claimants but going in practice to the landlords, as a result of extortion or planned redirection. Such cheques are often cashed without recourse to a bank account by means of the growing phenomenon of slightly dubious cheque shops. I have seen some evidence from the relatively small town of Northampton of £400,000-worth of benefit cheques, the bulk of which is paid to landlords, being cashed at dubious cheque shops. There is an estimated commission on that of £30,000 which is going to somebody. Surely that was not the intention of housing benefit. It is also a way of avoiding tax. If the Bill is using data matching to check

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  on claimants, surely we must make greater use of data matching with Inland Revenue declarations on landlords who receive benefit directly.
  This is a different sort of crime. It requires separate powers. In determining the sanctions, we have accepted some of the arguments of Ministers in another place that the maximum sanction should not be too out of line with that in parallel legislation such as the Theft Act. This amendment therefore reduces the maximum penalty from the 12 years suggested by my colleagues in another place to 10 years.
  The central issue here is that we need powers to identify such fraud as a crime that is separate from the individual crimes of individual claimants. The new clause would provide such powers. If the Committee were to accept the amendment, we would not only save the public purse, but take steps which would help to put a few very evil men behind bars and which would protect genuine claimants and decent legitimate landlords who suffer from the implication that so much is wrong with the sector; we would also protect a lot of very vulnerable people from being used in such conspiracies. I beg to move.
  Earl Russell: Wherever there is a fireplace, there will be soot. Wherever there are sewers, there will be rats. Wherever there is a large stream of public money, there will be corruption. I have no information on the extent of landlord fraud, but it is sadly inevitable that when a large supply of public money is devoted to any purpose, some people will attempt to batten on it and to make corrupt use of it. Clearly, there is landlord fraud. Clearly, it must be combatted.
  I was particularly interested in the point that the noble Lord, Lord Whitty, made about tax evasion. One of the ways in which we can tackle the frightening, widening gap between the amount of money that we need to support the services which everybody wants and the amount that it is assumed that people are prepared to pay for them is by collecting tax which can legally be collected under the present law. Wherever that can be done, it is useful.
  The question raised by this amendment is whether there should be a separate offence of landlord fraud or one should take the line that fraud is fraud is fraud and it is simply a crime, no matter who perpetrates it. I hope that the Minister will be helpful on that matter. The argument put forward in favour of a separate offence of landlord fraud is the very large scale on which it can on occasions take place. That is a powerful point. However, if fraud is taking place on a very large scale, presumably it means that it is taking place in relation to a large number of dwellings.
  Normally, the maximum sentence is seven years' imprisonment. The maximum sentence proposed by this amendment is 10 years. But if fraud takes place in respect of a great many different dwellings is it possible in extreme cases to impose separate sentences for separate offences and let them run consecutively? The Minister may be able to shed light on whether this amendment is the way to tackle a problem that we all agree needs to be tackled.
  10 p.m.
  Baroness Hollis of Heigham: Before the Minister replies, I should like to put one question to him. As I understand it, in 1994/5 £599 million of benefits fraud was detected. In 1995/6 the figure was £638 million. However, the proportion represented by detected multiple identity fraud, of which landlord fraud is the most obvious example, was only £6 million and £11 million respectively; in other words, landlord fraud represented only a tiny percentage. Does the Minister believe that this reflects the fraud practised on the ground?
  Lord Mackay of Ardbrecknish: The amendment proposed by the noble Lord, Lord Whitty, seeks to target dishonest behaviour specifically by landlords in connection with multiple claims to housing benefit and council tax benefit. The amendment adds nothing to the effectiveness of the offence proposed in Clause 13. It would replicate elements of the offence already contained in that clause and to that extent it is unnecessary. With the new powers in Clause 13 as drafted we have already made adequate provision to deal with landlord fraud.
  Clause 13 introduces a new offence tailored to serious social security fraud which will be capable of being applied to landlords or claimants, or both if they are involved in a conspiracy. This offence is, as is normal with the criminal law, framed so as to target particular criminal behaviour, not individual sections of society, even if legislation has been prompted by the need to overcome behaviour exhibited by specific sections of society. Landlords who receive direct payment of their tenants' housing benefit are already under a duty to report changes of circumstances which they might reasonably be expected to know will affect a claimant's right to, or the amount of, or receipt of, benefit. Clause 13 makes dishonest failure to report such a change an offence.
  This new clause, as the noble Lord has so carefully explained, is intended to provide a new and separate offence of aggravated landlord fraud—an offence which differs from that in Clause 13 by being specific to landlords and specific to one type of housing benefit fraud, namely, multiple claims. But there are other types of serious housing benefit fraud, such as setting up a ghost claim or a contrived tenancy. The offence in Clause 13 as drafted is capable of being used for all types of serious landlord fraud. The additional powers introduced by this amendment therefore achieve nothing of substance other than to introduce a stiffer sentence of up to 10 years' imprisonment for a landlord involved in the dishonest obtaining of benefit in relation to more than one claim.
  During Second Reading, I outlined the Government's 10 point plan for combating landlord fraud. I shall not test the Committee's patience by going through the full list tonight. But perhaps I may mention two points. The fact that authorities are isolated from each other is one of the key contributory factors enabling landlords to commit fraud. For example, a genuine claimant may move into a property and claim housing benefit which is then paid direct to the landlord. Later the claimant

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  moves on and opens a new claim in another area but fails to notify his old authority of the move—a common occurrence. The landlord, however, continues to accept the benefit payments on behalf of the departed tenant and relets the flat. Because the authorities are unable to share data with each other, the fraud goes undected.
  New measures—we have discussed them—will mean more information, particularly in relation to suspect landlords, will be available to the authorities and that information, as well as other relevant data, will be shared, making this type of fraud much more difficult to get away with.
  The next important measure is that which gives local authority inspectors the right of entry into business premises. This will enable them to enter the business premises of a landlord or agent, question people there and examine the records. This will be a powerful new tool in the detection and prosecution of landlord fraud.
  In addition, the new Benefit Fraud Inspectorate will make sure that all authorities are making appropriate efforts to tackle the problem of landlord fraud and will facilitate the spread of practical advice and guidance.
  I have already explained that we shall be issuing further guidance to local authorities on the question of direct payment to landlords. We have already discussed that. I do not think that there is any need to repeat it.
  I have great difficulty with the proposal that a separate, more severe, sentence for landlords is appropriate. The new offence in Clause 13 would increase the maximum penalty under targeted social security offence provisions to seven years' imprisonment.
  The Government's approach is not to make landlords, or any other sector of society for that matter, a special case but to adopt an even-handed approach across the board. Landlords guilty of fraud will be dealt with under the same system as everyone else with the full range of offences available depending on the severity of the case. The courts will have the power to take account of the degree of criminality and the seriousness of the offence within the maximum penalty set. They will also have the ability to take account of other factors such as whether the fraudster was in a position of trust. And they will sentence accordingly. In a DSS case in 1996 the Court of Appeal established a benchmark of six years' imprisonment for contested trials where there is a considerable loss to public funds (in that case, around £300,000) combined with an element of breach of trust. In the light of this, a heavier maximum sentence than seven years in cases of serious fraud perpetrated by those in a position of trust (such as landlords receiving direct payments) appears out of line.
  In the very worst cases, the new offence will not be the only basis for prosecuting landlords who commit serious fraud; the Theft Act and conspiracy charges can continue to be used by prosecuting authorities where appropriate. Section 15 of the Theft Act—obtaining property by deception—and conspiracy to defraud both carry a maximum sentence of 10 years.
  Perhaps I may continue to look at sentencing as regards consecutive and concurrent sentences. Whenever someone is convicted in court of more than
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  one offence on indictment, the judge may, if he feels it appropriate, pass consecutive sentences which can exceed the maximum for a single offence. It is a matter for the judges, and—dare I say it?—given some of the other arguments on some of the Bills of my noble friend Lady Blatch I would find it a little odd if I were invited to force judges to pass consecutive sentences and not leave it to their discretion. But they can do that if they see fit.
  I believe that the noble Baroness, Lady Hollis, raised the point that the saving of £6 million and £11 million indicate that the offence of multiple ID fraud has not been tackled.
  Baroness Hollis of Heigham: I sought to suggest that the figures reported indicate that the amount detected under the heading of multiple identity landlord fraud seemed to be relatively tiny compared with the pattern of fraud. It suggests to us that large swathes of landlord fraud remain undetected. I asked whether the Minister concurred in that view.
  Lord Mackay of Ardbrecknish: The figures mentioned relate to work by the Benefits Agency. The remit of the agency's fraud investigators is to tackle serious fraud. By its nature, such fraud investigation is both complex and labour intensive. It is always difficult to work out the amount of fraud that is not being detected and to break it down into specific types.
  In order to be helpful to the noble Baroness, I wish to explain our estimates of the total level of landlord fraud. They are based on a DSS accuracy review into housing benefit which was carefully planned and statistically sound. The review found cases where claims could not be traced, including those where the money was going directly to the landlord. The estimate for all such residence fraud was about £240 million. Half of that was going directly to the landlords. Therefore, if one takes into account collusive tenants, the suggestion is that landlord fraud may be of the order of £150 million.
  That is backed by evidence given by the London Boroughs Fraud Investigation Group to the Select Committee in another place of £40 million a year landlord fraud in London. As London has one-fifth of all the private-sector rented HB claims, and if landlords in the rest of the country are as fraudulent as the fraud investigation team believes London landlords to be, landlord fraud would amount to approximately £200 million. We thought of £150 million, but as we are making estimates I do not believe that the figures are widely far apart. They certainly show the ballpark position.
  I do not want it to appear, and I hope that the Opposition will not suggest, that I am somehow dismissing £150 million or even £200 million of landlord fraud as insignificant. It is very significant and I have suggested some of the ways in which the Bill will help authorities to counter such fraud, especially the kind mentioned by the noble Lord, Lord Whitty.
  I am disappointed that the Opposition continue to suggest that landlord fraud is somehow more inherently serious than all other types of benefit fraud, including

  537
  that committed by professional organised criminals making false claims, sometimes using, as we discussed on Tuesday, what might be called "insider trading" by having someone in an office of the local authority or Benefits Agency helping them in the creation of fictitious identities in order to commit the crimes. Of course, landlord fraud is serious. This Bill introduces a range of practical measures which will help local authorities investigate fraudulent landlords and bring them to justice. There is a range of tough offences under which landlords can be prosecuted and, despite the views of the Opposition, crooked landlords should be in no doubt that this new offence will be much more effective in dealing with them.
  The way to tackle landlord fraud is through effective prevention and detection methods, followed up by prosecution under, if necessary, the new offence for all serious fraud already in the Bill. That is the approach we are taking with the Bill and with other measures which make up our anti-fraud strategy, some of which I have outlined.
  I do not like to suggest it, but I believe that there is a certain amount of window dressing about wanting a 10-year sentence for landlord fraud whereas a seven-year sentence for all other types of fraud will do. All fraud, if it is of sufficient seriousness, ought to meet the same level of penalty. Seven years is a very substantial penalty. I have drawn the comparison with a Court of Appeal case where imprisonment for six years was made a benchmark. I have also indicated that the provisions of the Theft Act exist if the authorities wish to take other charges against a landlord. All in all, I believe that the approach in Clause 13 is correct and that we should not begin to categorise the type of criminal. We are attempting to root out the crime itself, whoever commits it.
  I hope that after that explanation, the noble Lord, Lord Whitty, will see fit to withdraw his amendment. However, I know from debates in the other place and I suspect from debates here that the noble Lord feels strongly about the issue. In that event, if it is put to a test, I hope that my noble friends will feel convinced by my argument and will support me in the Lobby.
  10.15 p.m.
  Lord Whitty: I am grateful to the Minister for giving such an extensive reply. We welcome the powers in Clause 13 and the other sanctions and powers to which the Minister referred. But we are not picking out for special attention landlords as a sector in society because they are landlords. Quite the opposite. We are seeking to protect decent landlords and to provide decent rented accommodation.
  The reason that landlords are a separate case is because they are the only people, apart from the claimants themselves, to whom housing benefit is paid directly by the state. Therefore, the state, in all its manifestations, has a responsibility for ensuring that that money is paid correctly and that anybody who misleads the state is dealt with by the law.
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  I crave the indulgence of the Committee and give just one example, which is referred to in the Select Committee report. It is a reported case of an hotelier who organised a major conspiracy as regards housing fraud. Out of 21 rooms for which benefit was claimed, only nine were found to be occupied. The documentation related to a large number of identities. One room was found to have documentation relating to five identities; another to 24; and another to 37. That was not even a case of multiple properties but a single property owned by a single hotelier who was organising that fraud.
  That is of a different dimension from the fraud committed by those 66 individuals, if any of them ever existed. Each of those individual claimants would be liable potentially to sanctions of up to seven years' imprisonment. I submit that the person organising that fraud and conspiracy to defraud the public purse should be liable to greater sanctions.
  I understand the provisions in this legislation and should like to give them a fair wind. But I remain unconvinced by the Minister's arguments. However, I shall reflect on them and reserve the right to come back at a later stage if we are allowed the luxury of a Report stage. I shall not divide the Committee at this point. I ask the Minister to consider our remarks, and on this side of the Committee we shall consider whether we wish to return at a later stage to the issue. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Clause 11 [Information from landlords and agents]:
  Earl Russell Earl Russell moved Amendment No. 71:
  Page 18, line 43, after ("supply") insert ("relevant").
  The noble Earl said: In moving this amendment, I shall speak also to Amendments Nos. 72 and 73. This is a closely-related group of amendments, so close that I should like to treat them as consequential. They deal with the provisions in Clause 11 to require information from landlords and their agents.
  I have no objection to the requiring of information but I wish to know precisely what information is required and for what purposes because the phrases in the Bill seem to me extremely wide. On Tuesday, the Minister told us that he did not want to go on fishing expeditions. I hope that he meant what he said because if he did he will accept a version of the amendments.
  Let us consider the power given in the Bill to require information either to the authority or to a person authorised to exercise any function on behalf of the authority. It may require any appropriate person to supply information of a "prescribed description" to the authority or other person. There they are: the Government are over-prescribing again.
  My amendment seeks to take out the words "of a prescribed description" and insert instead the more specific test of "relevant" information; that is, information relevant to the administration of housing benefit. Surely that is the Government's intention. That is all they want. I would like the clause amended so that that is all they will actually get.
  Amendment No. 73 seeks to delete subsection (4), which says:
  "Regulations may provide that any prescribed person, or any person of a prescribed description, is not an appropriate person for the purposes of subsection (I) above".
  That means, not being an appropriate person, they would not be required to supply information. In other words, it is a blanket power by regulation to confer exemption on various people from the requirements to supply information. I do not know what the Government had in mind in drafting the clause but, under these powers, one could exempt absolutely anybody one wished. For example, one could exempt all landlords from supplying information. One could exempt all tenants from supplying information. One could exempt all employees of a local authority from supplying information. I am sure that none of that is intended by the present Minister, but he knows that he will not be in office for ever. We have no idea who in future—even in the far distant future—may be using the clause. The power is not sufficiently carefully drawn.
  As for the power to supply information, in the hands of people given a blank cheque like this such powers are definitely capable of abuse. There are regrettably large numbers of people in this country who hate some category of their fellow subjects. Hearing the noble Baroness, Lady Castle of Blackburn, in such good voice earlier, I was reminded of the campaigns of the noble Baroness, and for those I take off my hat to her. They were against the cohabiting rules as they were in days of yore. Those were rules which allowed the exercise of a vast amount of prurient interest in other people's private lives. One can imagine those powers in the hands of a jealous ex-husband. I repeat the principle that public officials are also private people with all the ordinary passions that ordinary people have.
  Regrettably, there are large numbers of our fellow citizens so passionately homophobic that they are prepared to commit breaches of the peace against other people they just happen to dislike. We all have every right to dislike each other, but it does not follow that we should commit breaches of the peace as a result. One could imagine information being demanded, asking for the precise details of all the sleeping arrangements, which could be brought together precisely in order to serve that kind of prejudice.
  One knows also that there are certain people who are near to the point of paranoia about illegal immigration. One knows how complicated immigration documents may be: those of us who sat through the asylum Bill last summer had plenty of evidence of that. Again, for those of our fellow subjects who happen to hate everybody with a black skin—we must admit that there are such people—the powers under this clause would authorise a fishing expedition for other than a public purpose. No doubt the official concerned would be able to argue that there was a public purpose, because, of course, it is the very essence of all these prejudices that they involve the belief that the person against whom one is prejudiced is more likely to be criminal than almost anyone else.
  As for the power to supply information, I imagine that the power to convey exemptions from the list of appropriate people might be used to exempt children
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  from being required to supply information against their parents. I hope it would be so used, but the Bill does not say so. The Minister may or may not, in days to come, choose to prescribe children under subsection (4) as being not appropriate people to supply information against their parents.
  There is not even any clear recognition of the basic common law provision that husband and wife may not be required to supply evidence against each other. It may be that all that will be all right in regulation but we do not know. If we are asked to accept that it will be, we are being asked to accept the creed of legislation of the noble Lord, Lord Peston, that it will be all right on the night. Perhaps it will, but perhaps it will not. If we let this clause go from us we have given up our chance to review the exercise of power. Still we are told that Parliament controls the executive. I know it does not but we ought to try every now and then. I beg to move.
  Lord Mackay of Ardbrecknish: The regulation making powers within Clause 11 enable the Secretary of State to prescribe, by regulations, the type of information a landlord or agent may be required to supply. We intend that the information will cover full postal addresses and ownership details of a property, for example, where the properties are owned or run by limited companies, details of those companies, their ownership and associated companies. Managing or letting agents and other persons acting on behalf of the landlord will be required to supply the local authority, if requested, with the name of the responsible landlord, and vice versa, and may be asked to give details of other properties they manage. That matter concerns many of the important points we discussed on the previous amendment.
  Information covered by this provision will not be restricted to properties which fall within the local authority's own area. It will extend to all geographical areas in which housing benefit may be payable. Moreover, information will not be restricted to those properties containing housing benefit claimants or those to whom such benefit is paid direct. This is particularly important as landlords do not always know which, if any, of their tenants is in receipt of housing benefit, if they are not being paid directly.
  Amendments Nos. 71 and 72 to which the noble Earl has spoken seek to remove the Secretary of State's power to prescribe in regulations the types of information a landlord or agent may be required to supply to an authority. This would be replaced by a general provision giving each local authority or its contractor the right to demand any information from a landlord or agent it considered relevant. Of course we want the information which landlords and agents are required to supply to be relevant. But we believe that it should be relevant to the primary policy intention behind the clause: the prevention, detection and investigation of housing benefit and council tax benefit fraud. We intend to set out the detail in regulations, after consultation with local authorities and other interested organisations. The approach we have adopted ensures that we have the maximum flexibility to adapt the provisions in the light of experience.

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  There would be a number of difficulties if the clause were to be amended as suggested. First, removing the power to prescribe, by regulations, the types of information which may be required and putting the word "relevant" on the face of the Bill leaves open the whole question of what information is relevant, and what it is relevant to. This exposes local authorities to allegations that they are exploiting a general provision for purposes other than those for which the power is intended.
  Secondly, although it might appear quite reasonable to allow local authorities to determine, in the light of their local knowledge and experience, what information is relevant to the prevention and detection of benefit fraud in their area, each local authority would apply its own set of criteria in making that decision. Practice could vary therefore from authority to authority and from contractor to contractor. The fact that this new power extends beyond local authority boundaries means that some authorities might collect one type of information, while another group might gather a different type of information. The Committee can see that a certain amount of confusion could easily arise.
  The result would be multiple sets of data which, when compared with each other—this is one of the important things this Bill would enable us to do—might not reveal the very discrepancies this power is designed to uncover. To get the maximum benefit from the information gathered using this power we must ensure that we have some uniformity in the type of information to be required. It is our intention that this uniformity will be achieved by laying down in regulations descriptions of the information authorities may require a landlord to supply.
  Finally, the amendments would lead to increased local authority administration costs resulting from processing differing sets of information and missed opportunities to uncover benefit fraud by dishonest landlords because different authorities would be collecting different information. These amendments would introduce difficulties which will not arise with the clause as it stands.
  Turning now to Amendment No. 73, it may be helpful if I explain to the Committee that we intend to use the regulation-making powers in this provision to require information only from landlords or agents who are being considered for, or are in receipt of, direct payments of housing benefit and in relation to whom there is either a suspicion of wrongdoing or an ongoing investigation into an allegation of benefit fraud.
  The reason for specifying the first of those two conditions is that one of the commonest types of fraud involving landlords is that where direct payments are received in relation to either fictitious tenants or genuine tenants who are no longer resident in their properties.
  We shall be monitoring the use and effect of that power. If it should become apparent, for example, that dishonest landlords are evading the requirement to
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  provide information by avoiding the direct payment facility, we will have the flexibility to adjust the classes of landlords or agents to whom the provisions of this clause will apply. The need for this flexibility is the reason why the details of who is to supply what information, and in which particular circumstances, have been left to subordinate legislation.
  The other restriction on the use of this power—that is, to apply the requirement to landlords suspected of being implicated in some misdeed in relation to the benefit system—is designed to prevent wholly innocent landlords from being subject, unnecessarily, to a burden on their business and exposed, unreasonably, to the possibility of a penalty for non-compliance.
  Those classifications of landlord will be set out in regulations made under the powers in subsection (1) of the new Section 126A of the Social Security Administration Act 1992 inserted by this clause. The separate regulation-making power in subsection (4), which this amendment seeks to remove, will allow us to make further regulations to provide for prescribed persons to be excepted from this requirement.
  We do not, at present, have any plans to exclude particular persons or classes of person from these provisions but we believe that it is important to have the power to prescribe exceptions in reserve should this prove necessary in the light of experience. Our initial intention is, as I have explained, to use the powers in subsection (1) to draw the conditions for the use of this power quite tightly. That being the case, we do not feel that there is a need to define further classes of person to whom the provisions will not apply.
  If, however, experience shows that we must cast our net wider, then we shall need to consider whether particular cases or classes of case which would then be caught should be excluded. Moreover, if this measure is causing extreme unintended difficulties for certain classes of landlords, or individuals, we believe it is both sensible and prudent to have the flexibility to provide for exceptions to the rule. Subsection (4), as it stands, provides for these flexibilities.
  This amendment would remove that safeguard. I do not believe that to do so will assist local authorities in their fight against fraud. Nor will it usefully extend the scope of the powers already contained in Clause 11 to a greater number of landlords, if that is what is intended by the noble Earl. It will, however, make it far more difficult to provide for any anomaly which might arise in the future.
  I appreciate, because it is not the first time, that the noble Earl is rightly suspicious of the Executive gaining powers. I happily concede that the department may not always have enlightened Ministers such as Mr. Lilley and myself running it. But I take a broadly generous view of the democratic process—
  Baroness Hollis of Heigham: But not an optimistic one of your own party.
  Lord Mackay of Ardbrecknish: Within reason, when I am old and grey, or older and greyer—depending on how noble Lords are looking at this time of night—then of course some younger colleagues in my party may well succeed me in being Ministers. I have absolute confidence in them approaching this matter sensibly. Leaving that aside, and going back to the serious point, I hope that, in the light of my explanation, which is obviously on the record, the noble Earl will feel that he has got me to put on the record what are our intentions and will feel that the amendments are not necessary.
  10.30 p.m.
  Earl Russell: I thank the Minister for that reply. I propose to try to save the Committee's time. We have gone around this course several times already. So, unless he objects and wishes to intervene, I propose to represent as a dialogue his points and my points. If he objects to the way these are put, I will give way to him instantly.
  First, in relation to subsection (1) I do not object to the categories of information the Minister proposes to prescribe. My response is that if that is what he wants to prescribe, why does he not say so? If he did, I would make no complaint about the clause.
  The Minister will invoke, as he has a thousand times, the virtues of flexibility. I reply: why only his flexibility? He talks about adapting the provisions in the light of experience. Why only his experience? When have any such provisions been adapted in the light of Parliament's experience, or the local authority's experience, or the claimant's experience? Why should the experience of the Department of Social Security have this unique privilege? It does not seem to me to be reasonable.
  The Minister exclaimed in horror that if this amendment were accepted practice might vary. He will have heard of the principle of horses for courses. It has quite a lot to recommend it.
  He talked about the need to compare by means of an identical system of data. In the bureaucrats' heaven the world might indeed be like that. But things are very, very different from each other. I was suddenly reminded while the Minister was speaking of a speech by the late Lord Swann during debate on the education Bill in 1988. I quote from memory and may not be quoting exactly. Lord Swann referred to a questionnaire sent to university departments asking what they were doing to promote the values of free enterprise. Lord Swann said: "This caused considerable perplexity when it fetched up in various faculties of divinity". The Minister will see from that why I think the Procrustean power to compare identically matched data, though it does have its superficial attractions, comes out of the bureaucrats' heaven and the rest of the world's hell.
  Finally, I am deeply disappointed that in subsection (4) the Minister has no intention of excluding children from the category of appropriate persons. Has he considered what that will do to relations between parents and children? If information is received from an innocently prattling 4 year-old which leads to the parents being evicted, the parents inevitably will feel
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  resentment and the child will inevitably feel guilt. Has the Minister no sense of priorities? If I had no other objection but that alone, that in my view would be sufficient for asking the opinion of the Committee.
  10.37 p.m.
  On Question, Whether the said amendment (No. 71) shall be agreed to?
  Their Lordships divided: Contents, 11; Not-Contents, 42.

  DIVISION No. 5

  CONTENTS

  Addington, L.

  Grey, E.

  Alderdice, L.

  Redesdale, L.

  Clancarty, E.

  Russell, E. [Teller.]

  Turner of Camden, B.

  Falkland, V. [Teller]

  Whitty, L.

  Gould of Potternewton, B.

  Winchilsea and Nottingham, E.

  NOT-CONTENTS

  Anelay of St. Johns, B.

  Long, V.

  Attlee, E.

  Lucas, L.

  Balfour, E.

  Lucas of Chilworth, L.

  Blatch, B.

  Lyell, L.

  Brabazon of Tara, L.

  Mackay of Ardbrecknish, L.

  Brougham and Vaux, L.

  Mackay of Clashfern, L.

  Chesham, L. [Teller]

  [Lord Chancellor.]

  Coleridge, L.

  Mackay of Drumadoon, L.

  Courtown, E.

  Marlesford, L.

  Cumberlege, B.

  Miller of Hendon, B.

  Denton of Wakefield, B.

  Mountevans, L.

  Ferrers, E.

  Park of Monmouth, B.

  Goschen, V.

  Pearson of Rannoch, L.

  Haddington, E.

  Shaw of Northstead, L.

  Hardwicke, E.

  Skelmersdale, L.

  Harlech, L.

  Strange, B.

  Harlech, L.

  Strathclyde, L. [Teller]

  Henley, L.

  Trumpington, B.

  HolmPatrick, L.

  Ullswater, V.

  Keyes, L.

  Wilcox, B.

  Kingsland, L.

  Willoughby de Broke, L.

  Lindsay, E.

  Wynford, L.

  Resolved in the negative, and amendment disagreed to accordingly.
  10.43 p.m.
  [Amendments Nos. 72 and 73 not moved.]
  Clause 11 agreed to.
  House resumed.

  National Health Service (Primary Care) Bill [H.L.]
  Returned from the Commons agreed to with amendments and with a privilege amendment; the Commons amendments ordered to be printed.
  House adjourned at fourteen minutes before eleven o'clock.