Lords Sitting of 1 February 2001

Preamble
The House met at three of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Southwark.

  War Crimes
  Lord Janner of Braunstone Lord Janner of Braunstone asked Her Majesty's Government:
  Whether they will take steps in appropriate cases to exercise their powers to remove British nationality from individuals whom they are satisfied have been personally involved in the commission of war crimes.
  The Parliamentary Under-Secretary of State, Home Office (Lord Bassam of Brighton): My Lords, the Government take the issue of war crimes very seriously and are seeking to ensure that the UK is not, and does not become, a safe haven for individuals involved in such crimes. My right honourable friend the Home Secretary is examining various measures, including the scope for using the deprivation of citizenship provisions contained in Section 40 of the British Nationality Act 1981.
  Lord Janner of Braunstone: My Lords, I thank the Minister for that Answer and especially for his assurance that an investigation is taking place. I am sure that he is aware of the presence in this country of some 1,500 members of the Waffen SS from the regiment known as the 14th SS Volunteer Division Galicia, which includes a number of war criminals and against whom there is now new evidence. Can he indicate when the Home Secretary's investigation is likely to be completed; whether the powers of the Home Secretary to remove British nationality will be used if, but only if, there is sufficient evidence against an individual; and what other measures are being considered?
  Lord Bassam of Brighton: My Lords, I cannot be precise as to when the review will be completed, but it is urgently taking place. The noble Lord is right to draw our attention to the recent programme "The SS in Britain". I can inform him that the Metropolitan Police are investigating allegations made as a product of that programme and forwarded by the Simon Wiesenthal centre. The police have received helpful information with regard to these allegations and have received the co-operation of the programme-makers. They are giving it very careful analysis.
  Lord Campbell of Alloway: My Lords, how on earth can any government be satisfied of personal
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  involvement—that is what the Question asks—without a conviction in the courts? Is the Minister aware that the Hetherington report found many people personally involved, worthy of trial, and probably worthy of conviction, but there has been only one conviction since 1991? What on earth are the Government going to do? It is the business of the judiciary not of the Government.
  Lord Bassam of Brighton: My Lords, there was widespread concern about that. As a result of the inquiry conducted by Sir Thomas Hetheringon in 1989 our predecessors in government—they should be congratulated on it—brought forward the War Crimes Act. The noble Lord is right; there has been only one successful prosecution. But the police investigated—the responsibility must rest with them, it cannot rest with government—more than 300 allegations following the war crimes inquiry. We have to be satisfied that those allegations were properly and thoroughly investigated. I am sure that the police did a rigorous job in difficult circumstances.
  Lord Campbell of Croy: My Lords, will the Government, whatever they can or decide to do, treat in a similar way any persons found to be involved in crimes against humanity, not necessarily in wartime, and committed against their own nationals as well as others; for example, the atrocities committed in death camps such as Belsen, which was liberated by the British Army?
  Lord Bassam of Brighton: My Lords, those circumstances would be covered by the War Crimes Act. But the Government have recently introduced a Bill to allow the United Kingdom to ratify the International Criminal Court statute. That will allow UK courts to prosecute war crimes, genocide and crimes against humanity committed in the UK or by UK nationals and those subject to UK service jurisdiction overseas, and allow the United Kingdom to surrender indictees to the court. That gives ample testament to our commitment in this policy area.
  Lord Janner of Braunstone: My Lords, will the Minister tell the House whether he is in contact with Poland, which is looking into the extradition process, or with any other governments in connection with issues that he has been good enough to look at?
  Lord Bassam of Brighton: My Lords, the noble Lord will appreciate that I am not personally in contact, but I am sure that that the department is. I shall carry out some inquiries to find out exactly where those links and connections are. I shall write to the noble Lord and place a copy of that correspondence in the Library.

  Interception of Postal Items
  3.11 p.m.
  Baroness Gardner of Parkes Baroness Gardner of Parkes asked Her Majesty's Government:
  What bodies are entitled to intercept items carried by the Royal Mail; in what circumstances; and under what powers.
  Lord Bassam of Brighton: My Lords, the powers to authorise the interception of communications are to be found in the Regulation of Investigatory Powers Act 2000. Under that Act, there are nine bodies which may seek authorisation to intercept items carried by the Royal Mail. These are the Security Service, the Secret Intelligence Service, Government Communications Headquarters, the National Criminal Intelligence Service, the Metropolitan Police, the Royal Ulster Constabulary, Scottish police forces, Her Majesty's Customs and Excise and the Ministry of Defence.
  The grounds on which a warrant can be granted are strictly limited. It can be done only when the interception is necessary for one of the three following purposes: first, in the interests of national security; secondly, for the prevention or detection of serious crime; and, thirdly, for the purpose of safeguarding the economic well-being of the United Kingdom.
  Baroness Gardner of Parkes: My Lords, I thank the Minister for that Answer. Is he aware that on 20th January on the "Money Box" programme, the National Criminal Intelligence Service said that it had intercepted 10,000 letters from Nigeria concerning a financial scam asking people to move lots of money? Can he tell us exactly what is meant by "interception"? Can he further say what is the position about private mail, as a good deal of mail now comes via couriers and other means rather than via the Royal Mail?
  Lord Bassam of Brighton: My Lords, I am grateful to the noble Baroness for repeating the information given on that programme. I was not aware of it. Postal interception plays a very small part in interception operations. I am advised that out of 2,000 warrants issued in 1999, the latest year for which we have figures, just 130 authorised the interception of postal items. Interception is a vital intelligence gathering tool for law enforcement and national security purposes.
  As to the noble Baroness's final point, the fact is that an interception warrant may be served on a person who provides a "postal service". A "postal service" is defined in the legislation as any service which assists in the distribution and delivery of postal items. A "postal item" is defined as any letter, postcard or other thing in writing as may be used by the sender for imparting information to the recipient. That covers private courier services as well as the Royal Mail.

  London Underground: Financing Structure
  3.14 p.m.
  Lord Ezra Lord Ezra asked Her Majesty's Government:
  Whether they remain committed, in the future financing of the London Underground, to separating responsibilities for operating the system from providing for its infrastructure.
  The Minister of State, Department of the Environment, Transport and the Regions (Lord Macdonald of Tradeston): My Lords, yes. The Government remain committed to securing the best option for the Tube that combines value for money with maintaining and improving safety. We believe that our proposal for a public private partnership is the right one. We are also in discussion with the Commissioner for Transport of London, Bob Kiley, on his proposals. Building on the work already done, we aim together to work out how best to accommodate his thinking within the PPP framework.
  Lord Ezra: My Lords, I have carefully noted what the noble Lord has just said. I am glad that discussions are still going on with Mr Bob Kiley. However, in view of the difficulties which have arisen on the railways as a result of divided responsibilities, is it not important to see whether private sector participation, with which many of us agree, could be obtained on the Underground without dividing responsibility between operations and the infrastructure?
  Lord Macdonald of Tradeston: My Lords, safety is paramount and has been at the forefront of thinking on the PPP. I should make clear, however, that the Underground is not a fragmented system like the railways. The PPP is much more unified in its structure than anything that is involved in the national railway. The public sector London Underground will retain primary statutory responsibility for the whole network and the unified structure that we propose avoids separation between train maintenance and track maintenance.
  Lord Brabazon of Tara: My Lords, is the Minister aware that Mr Kiley has described the public private partnership as "fundamentally flawed" and a "prescription for potential disaster"? Does the noble Lord not recognise that Mr Kiley has a good deal more experience in running an underground railway than many other people in this country?
  Lord Macdonald of Tradeston: My Lords, it is worth emphasising that there is a great deal of experience in running London Underground in its present management. Indeed, it is that management which is carrying on the negotiation at the moment. But I do stress that we have had a series of constructive meetings with Mr Kiley. We are both looking for the best management system. We understand that Mr

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  Kiley accepts that the private sector has an important role to play. Despite the statements that we read, I emphasise again that discussions continue.
  Lord Marsh: My Lords, but is not Mr Kiley still committed to financing the new situation on the basis of direct access to the bond market? Is there a compromise between that and the PPP?
  Lord Macdonald of Tradeston: My Lords, I stress again that in our discussions we have made it clear that we are trying to seek as much common ground as possible. I am not aware that the question of bond finance would in the end frustrate an agreement were that agreement to be possible.
  Lord Harris of Haringey: My Lords, does my noble friend agree with the views of the Labour group on the Greater London Assembly—I declare an interest as its leader—that any scheme for the funding of the Tube should deliver money quickly to deal with the under-investment over many years but should also be capable of external validation as to safety and value for money for Londoners? Does he also share the widespread amazement at the Mayor of London's stance in supporting the proposed strikes on London Underground?
  Lord Macdonald of Tradeston: My Lords, we look both to the Health and Safety Executive to ensure that the safety regimes put in place are as rigorous as they should be and to the National Audit Office to ensure that whatever deal we do produces best value. I stress that we have said that the PPP must show itself to be the best value for London.
  On the question of the dispute, I am aware of the judge's decision but I am not aware of the full details of the judgment. However, it is worth pointing out that, although safety has been one of the points made by the rail unions in the dispute, the other areas are no compulsory redundancies, established staff levels to be maintained and all employees employed at the date of the present dispute to remain on their existing terms and conditions of employment. It is a concern about change that the unions are expressing—in a way, I think, we would all believe is of great inconvenience to the travelling public. But change is, I believe, inevitably in prospect if we want to get into the railway the kind of investment to which the noble Lord referred.
  Viscount Cranborne: My Lords, can the Minister satisfy what may be a rather selfish question? Did the Government welcome unequivocally the appointment of Mr Kiley and are they now happy to see him in place?
  Lord Macdonald of Tradeston: My Lords, we were not consulted on that appointment and we did not expect to be consulted. However, I have met Mr Kiley on a number of occasions, most recently half an hour ago. I explained to him that I had to leave our meeting to come to the House and answer a Question about
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  whether I would be meeting him. We have found Mr Kiley to be extremely able. He has engaged with us in constructive discussions.
  Baroness Hamwee: My Lords, the House will glad to hear those comments. The Minister has pointed out that the Government are doing what they can best to accommodate Mr Kiley's thinking within the PPP framework. Does that not suggest that the Government's willingness to be flexible in their thinking is very limited? What further assurances can the Minister offer noble Lords that he is prepared to consider the framework so that ultimately we achieve the best outcome?
  Lord Macdonald of Tradeston: My Lords. I stress again that our primary objective is to secure the best value for money for Londoners and to ensure that investment is put into the Tube as quickly as possible. We believe that the PPP is the best system for achieving that. However, we have been open in our discussions with Mr Kiley and have made it clear to him that we are prepared to discuss all of his objectives for the railway, for the Underground—I apologise to noble Lords for using American terms—and that we shall be happy to try to accommodate them where they do not threaten our core intention of providing best value.
  Lord Berkeley: My Lords, can my noble friend assist me on a matter regarding the performance of the London Underground? He stated that the objective of the PPP is to improve performance. Can he confirm that recent press reports stating that the PPP will not require the contractors to improve on their performance are totally incorrect?
  Lord Macdonald of Tradeston: My Lords, I can do so.
  Lord Lawson of Blaby: My Lords, does the Minister recall that a few moments ago his noble friend asked him whether he would condemn the Mayor of London's explicit support for the proposed strike? Does he also recall that inadvertently he forgot to answer that question? Perhaps I may give him an opportunity to do so now.
  Lord Macdonald of Tradeston: My Lords, I do believe that the Mayor of London is wrong to say that he will support the strike and take part in picketing. I think that it is also regrettable that, although the strike has been described as a one-day strike, it appears that it will be conducted in such a way that it will hit travellers over two days. That seems inherently unfair on the travelling public. As I have said, I think that the Mayor's actions are regrettable.
  Baroness Gardner of Parkes: My Lords, is the Minister aware that a statement was made in a news broadcast to the effect that the Mayor intends to borrow a considerable number of millions of pounds from the fire brigade pension fund to commence immediately and without further delay the transport

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  work? Can the Minister tell the House what are the implications of that action? How will it fit in with the other proposed financial arrangements for the Tube? Furthermore, is there any risk that ultimately the people of London will need to pay the money back through a higher levy?
  Lord Macdonald of Tradeston: My Lords, many noble Lords will be aware that one of the underlying intentions of the PPP is to transfer risk to the private sector. We believe that if the intended PPP is disrupted in any way it would take one to two years to put in place alternative financing systems. However, I am not aware of any intention to use fire brigade pension fund money for that purpose.
  Earl Attlee: My Lords, can the Minister tell the House what is the size of the public subsidy to London Underground and what is the capital requirement?
  Lord Macdonald of Tradeston: My Lords, those questions will be covered by the rules governing commercial confidentiality. The noble Earl will understand that at this time that must influence many of our public statements as regards capital needs. As to past funding, in recent years that funding has been running at an average of around £500 million per year. By the end of 2001, I believe that, since the Government came to power, we will have put in around £3.4 billion. That figure contrasts with the previous government's spending plans, which included the elimination of any kind of grant to the Underground.

  Hammond Inquiry: Terms of Reference
  3.25 p.m.
  Lord Roberts of Conwy Lord Roberts of Conwy asked Her Majesty's Government:
  Whether they will publish the terms of reference for Sir Anthony Hammond QC's inquiry in connection with matters relating to Mr Peter Mandelson's resignation.
  Lord Bassam of Brighton: My Lords, the terms of reference for Sir Anthony Hammond QC's review, announced by the Prime Minister on Wednesday, 24th January, are:
  "To establish what approaches were made to the Home Office in 1998 in connection with the possibility of an application for naturalisation by Mr S.P. Hinduja, and the full circumstances surrounding such approaches and the later grant of that application; and to report to the Prime Minister".
  Lord Roberts of Conwy: My Lords, I am grateful to the noble Lord for that detailed reply relating to this sorry affair. Can he confirm that the inquiry will be able to look into the question of how the Home Office appears to have succumbed to extraneous ministerial
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  pressures brought to bear when the issue arose over whether passports should have been granted to the Hinduja brothers?
  Lord Bassam of Brighton: My Lords, it would be wrong for me either to describe or circumscribe in any way the extent of the inquiry being carried out by Sir Anthony Hammond. I believe that it would also be wrong to pre-empt the outcome of that review. No doubt the review will be as extensive as the noble Lord wishes.
  Lord Renton: My Lords, will Sir Anthony's findings be published?
  Lord Bassam of Brighton: My Lords, the report will be published and I have been advised that copies will be placed in the Printed Paper Office and, of course, in the Libraries of both Houses of Parliament.
  Lord Davies of Coity: My Lords, can my noble friend confirm whether the previous administration, which was in power for 18 years, set up an inquiry to consider the behaviour of Neil Hamilton, Jonathan Aitken and Jeffrey Archer? If they did so, did they publish the terms of reference?
  Lord Bassam of Brighton: My Lords, I am not aware that that was done. Perhaps different rules then applied.
  Lord Campbell of Alloway: My Lords, will the evidence be taken on oath and will it be subject to cross-examination?
  Lord Bassam of Brighton: My Lords, I do not think that this is a judicial inquiry or investigation and I am not aware that evidence will be taken in the manner suggested by the noble Lord.
  Lord Cope of Berkeley: My Lords, I am sure that Sir Anthony Hammond's long experience as the in-house legal adviser at the Home Office for most of his career will enable him to probe this matter very deeply. However, if his report exonerates Mr Mandelson, will be once again be reinstated? Mr Mandelson was a most respected Secretary of State for Northern Ireland.
  Lord Bassam of Brighton: My Lords, it is undoubtedly the case that Peter Mandelson was a widely respected Member of Her Majesty's Government. He did an excellent job in his ministerial postings. As regards the position of Sir Anthony Hammond, I believe that he is an official whose standing is above and beyond dispute.
  The Earl of Onslow: My Lords, if Mr Mandelson is found to be lily-white and guilt free, why is he not being asked back into the Government? Alternatively,

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  what was the reason for his resignation? If the Minister does not know the answer, perhaps he would like to ask his neighbour sitting to his right.
  Lord Bassam of Brighton: My Lords, that is an entirely hypothetical question. Those matters are, of course, properly ones for the Prime Minister.

  The Steel Industry
  3.28 p.m.
  The Minister for Science, Department of Trade and Industry (Lord Sainsbury of Turville): My Lords, with the leave of the House, I shall now repeat a Statement on Corus which was made in another place by my right honourable friend the Secretary of State for Trade and Industry. The Statement is as follows:
  "I would like to make a Statement concerning the steel industry and the announcement made today by Corus.
  "The House will be aware that since early December Corus has been conducting a review of its operations. The results of this review were announced this morning. Corus has said that it intends to introduce radical restructuring measures which will involve significant job losses in England and Wales. Over 6,000 jobs will be lost. Around 3,000 of those will be in Wales and 3,000 will be in England.
  "Corus has failed to discuss its plans with the Government. Relevant information has not been disclosed; it has been resistant to any meaningful dialogue and has refused to discuss in detail its plans for the industry. We have expressed our concerns to the company about this lack of information at the highest possible level.
  "There is no doubt that Corus has been facing difficulties. Trading conditions are tough and there has been a clear need for the company to take steps to address these problems. The Government recognise that it is for Corus and any other company to take the commercial decisions they feel are necessary, but in this case capacity will be reduced and thousands of jobs lost as a result of a short-term response to the difficulties it faces.
  "The Government recognise that at a time of globalisation many sectors of industry are going through major reconstructing. In these circumstances the role of government is to provide economic stability. That is exactly what the Government are doing.
  "There are over a million more men and women in work than in 1997. Inflation now remains around or below the target of 2.5 per cent. Long-term interest rates are at their lowest level for 35 years. We have put an end to the old cycle of boom and bust. Building on that platform of stability, the Government have been driving forward an active industrial policy to enable established industries to modernise, to adopt new processes and technologies and to support the development of new industries.
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  "We have seen manufacturing productivity increase by around 3.5 per cent over the past year. Exports are growing, with manufacturing export volumes up by more than 9.5 per cent in the past year. Manufacturing output is rising, too. The prospects for manufacturing are improving, with most forecasters expecting growth to pick up over the next two years. Only this morning, the latest Chartered Institute of Purchasing and Supply report showed manufacturing growing at its fastest since March last year.
  "Today's announcement by Corus stands in stark contrast to other manufacturing companies. Those companies are prepared to take a long-term view. In recent weeks, both Toyota and Nissan have taken positive decisions on production in the UK when they could have gone elsewhere in the world. These companies have decided that they have a future as manufacturers in the UK. They have committed to substantial new investment. They have demonstrated confidence in their workforces and in the economic stability and favourable business environment the Government have established. Corus should—like Toyota and Nissan—weigh up its long-term interests and prospects and, in responding to the real challenges it faces, it should put greater weight on the new opportunities that exist for developing into new markets.
  "Even after today's announcement, Corus will remain a major employer, with around 22,000 employees in the UK, a demonstration of the fact that there is a future for the steel industry. It is because there is a future for the industry that Corus should think again about these proposed closures and redundancies and instead work with the trade unions, government and the National Assembly for Wales to identify a better way forward.
  "We recognise that this is a commercial decision to be taken by the company and that action has to be taken to tackle the losses being suffered by Corus. But Corus should now engage openly and work constructively with all the relevant parties, building on the strengths that exist in the steel industry.
  "UK steel workers have improved productivity dramatically in recent years. They are the most highly productive steel workers in the whole of Europe. Between 1998 and 1999 alone, they increased productivity from 533 tonnes per person to 571, well above the levels in Germany and France. We have been working with the industry to help it improve productivity, to modernise and adopt new technology.
  "The workforce at Corus has shown its long-term commitment to the industry and to the company, and I share its anger at Corus's behaviour. Corus should now work with its employees and the communities affected. If Corus refuses to change course, then it must meet its obligations. It must pay the costs of the clean-up of the sites involved in today's announcement. It should then release them quickly and play its part in helping the communities affected.

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  "The Government will not walk away from the innocent victims of this decision. We will be there alongside them. We will provide help for the individuals affected, support for local communities and backing for regeneration schemes to support the local economy and bring new jobs for people.
  "But it need not come to that. Corus should adopt a different approach. If it were to do so, it would have the support of the Government. On behalf of 6,000 steelworkers, their families and the communities in which they live, I urge Corus to think again and to work with us to identify a better way forward".
  My Lords, that concludes the Statement.
  3.35 p.m.
  Lord Roberts of Conwy: My Lords, I am sure that we are all grateful to the Minister for repeating this very worrying Statement made in another place. I fear that the loss of 6,050 jobs is a severe blow to the British economy. Those job losses will, of course, have a ripple effect and other jobs will be lost in ancillary businesses of all kinds.
  It is a particularly devastating blow to Wales, which is due to take about half the job losses, mainly at Llanwern and nearby Ebbw Vale and Bryngwyn, which are to close completely. Shotton in North Wales also loses more than 300 jobs. All this in spite of the high productivity which the Minister was happy to acknowledge.
  One has to remember, too, that the job losses announced today come after 2,000 jobs were shed by Corus in its Welsh plants last year—4,200 in all in England and Wales. Employees and people generally in Wales have been deeply disturbed by this news, which comes on top of other job losses in manufacturing at Sony, Panasonic and elsewhere. So I am not quite as sanguine about the prospects for manufacturing as the Minister appears to be.
  I understand that the company argues that the job losses are necessary because of over-capacity in the industry—this may explain its refusal to accept the Iron and Steel Trades Confederation's proposal for a take-over of Llanwern—although it is only the heavy end, as I understand it, that is being closed at Llanwern. Corus also blames lack of demand in the UK for certain of its products.
  My first question to the Minister is whether it can be argued that Corus is engaged in reconstruction of the steel industry in the United Kingdom and whether it would qualify for financial assistance in this from the European Commission and its Steel Aid Fund. The company's losses have certainly been high and it will surely need such assistance. Have the Government sounded out the Commission? If not, will they do so?
  Judging by the exchanges at Welsh Questions in the other place yesterday, the Government are critical of Corus for keeping them in the dark about its plans. The Minister echoed those feelings today. I find this rather difficult to understand because Sir Brian
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  Moffat, the Corus chief executive, met the Prime Minister and a number of his Cabinet colleagues in Downing Street last week. As the Minister acknowledged, rumours of the company's difficulties and impending cut-backs have been circulating for quite some time. I cannot believe that the Government were unaware of them. My second question is, therefore, what did the Government do when they heard these reports? Did they really press Corus for its plans? Certainly they should have pressed the company harder than they did because we are told that Corus did not produce its plans.
  Although it is understandable in view of the imminence of an election that the Government should attempt to load as much of the odium for these closures on Corus, it is also fair to ask whether they think that the climate change levy—80 per cent of which will be paid by Corus alone—is appropriate at this time. Will the Government consider the suggestion put forward by the noble Lord, Lord Ezra, when we discussed the steel question on Tuesday, that the Government seek to postpone its effect or to modify it in other ways? In the present circumstances the business rate paid on some of the plants should also be considered. I am told that Corus raised that issue with the Welsh Assembly some weeks ago.
  On Tuesday, we were reassured by the noble Lord, Lord Sainsbury, that,
  "If further job redundancies are announced shortly, we shall take the action that we have taken in similar cases to ensure that we create jobs in the area and enable people to search for new jobs".—[Official Report, 30/1/01; col. 554.]
  What exactly do the Government propose? Who will take the lead on this? Is the First Secretary at the Welsh Assembly to take the lead so far as concerns Wales? Will it be the Secretary of State for Wales; or the Secretary of State for Trade and Industry; or will it be the Prime Minister in person? There seems to be some confusion as to who is in the lead in this area. Frankly, it has to be said that too many cooks spoil the broth.
  Each area affected is very different in character. Ebbw Vale, for example, is almost totally dependent on its steelworks. Each area will require special treatment. I hope that the Government will bear in mind that south-east Wales in not in the Objective One area and cannot benefit from the resources available under that heading.
  When Ravenscraig, Llanwern's sister plant in Scotland, was closed a decade or so ago, there were much better prospects of attracting major inward investment projects and every effort was made to secure alternative employment in the Ravenscraig area. It will be much more difficult to do that now, in spite of the high-quality workforces available in Gwent and elsewhere, because there is not so much mobile industry available.
  Finally, we are all concerned about the proposed reduction in steel producing capacity and our possible need of it at a later date. Will the Government examine the national interest in this issue in some depth? There are clearly implications for defence procurement.

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  The Government cannot stand idly by, denigrating Corus, although that is understandable. They must be realistic. Although they may plead with Corus to change its mind, it is somewhat unlikely to do so.
  3.43 p.m.
  Lord Ezra: My Lords, I, too, should like to thank the Minister for repeating the Statement by his right honourable friend in another place. I join with him and the noble Lord, Lord Roberts, in regretting that this decision should have had to be taken and that this large number of highly skilled steel workers should no longer have employment.
  From my days in the coal industry, I recall visits that I paid to both the plants in South Wales that are primarily affected, Llanwern and Ebbw Vale. Indeed, I was at Llanwern shortly after its opening in 1962, when I was shown round by the late Sir Campbell Adamson, then the plant manager. Therefore, I speak with enormous regret that such a wonderful plant, as it then was and as it has served the country ever since, should now face partial closure. I agree that everything possible should be done to reverse that decision if it is still feasible to do so.
  The Minister said in repeating the Statement that it is clear that,
  "at a time of globalisation, many sectors of industry are going through major restructuring".
  I should like to remind the noble Lord of the proposals that I made when the subject of manufacturing arose in this House on previous occasions, specifically in relation to the steel industry. I suggested that, because of the difficulty that many sectors of manufacturing were meeting, the Government should be studying the issue and should be bringing out a White Paper in which they could formulate a strategy. Had they done so, it would have been easier for the management of Corus to take a long-term view relating to such a strategy. I hope that it is not too late for that issue to be addressed.
  I should particularly like to know, as the noble Lord, Lord Roberts, indicated, what the Government have in mind if the management of Corus were now, even at this late stage, to take a different view? What measures could the Government introduce to help Corus which would not contravene either European or British competition rules; and which could make such a material difference that we could retain these assets for the long term, as we should all like to do, maintain a higher level of employment than is presently envisaged, and at the same time enable the company to regain its viability? Those are the real issues on which we should like to be informed.
  3.46 p.m.
  Lord Sainsbury of Turville: My Lords, the noble Lord, Lord Roberts, was right to say that the closures will have a ripple effect. I hope that I was in no way over-optimistic about the situation in manufacturing generally—although it should be pointed out that output in manufacturing is up: we saw productivity rise by around 4 per cent throughout last year, and
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  some parts of the manufacturing sector, such as aerospace or fibre-optics—one of the leading new areas—are doing extremely well. What we are seeing is a variable picture between the different parts of manufacturing. It is typically those parts of manufacturing with low margins such as steel, or where there is global excess capacity—for example, in automobiles—where the greatest pressure is being felt.
  I believe that there is no question of giving help under the rules of the European Coal and Steel Community, which are very tight indeed. With the Prime Minister and the Secretary of State, we have had meetings with Corus. The company was pressed at the highest level to give us details of what it was planning to do and its long-term strategy. It is a measure of how out-of-touch the company is with current thinking on these matters that it should have refused to give us those figures, and that the figures and plans were only heard by us at eight o'clock this morning. I do not think that it is an appropriate way for a major company to behave in today's economy.
  So far as concerns the climate change levy, it will be appreciated that, with the 80 per cent discount, it comes to only £10 million. Therefore, the figure has not been significant in the overall scheme. We suggested discussing a package which covered areas such as business rates and various other matters. We accept that it would not have been a huge package, because we cannot do that under the rules of the European Coal and Steel Community; however, it could possibly have gone some way to mitigating the impact of the severity of the cuts. I am sure the House will agree that any such mitigation should have been given serious consideration by the company. However, the view of the company was that it would not affect its decision in any way.
  As I hope the Statement makes clear, we are asking Corus to reconsider and rethink its decision. If it persists, we shall obviously bring forward proposals on the basis of the figures that we now have. I had hoped that the other parties in this House could join with the Government in asking Corus to reconsider its decision.
  As regards manufacturing industry, the Government are deeply concerned about, and have given great consideration to, the interests of manufacturing, which we believe can continue, as now, to play a very large part in the economy of this country. There are many opportunities going forward. I am not certain about a strategy, but we have policies that obviously impact on the different factors that influence manufacturing. As I believe I illustrated when I mentioned the varying situations in different parts of manufacturing, I doubt if a manufacturing strategy will take us any further.
  I can tell the noble Lord, Lord Ezra, that, as I said earlier, we offered to try to put together a package that included business rates, but the company were not interested in it. Of course, the major factor as regards the company's profitability is the question of the exchange rate. But since the dismissal of the two chief executives in December the situation has moved on

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  significantly by over 10 pfennigs. That, alone, would have an impact of £80 on the profitability of the company, which is the major consideration. In responding to that short-term situation, we have not been persuaded that the company has really given the proper and due weight to the long-term situation.
  3.51 p.m.
  Lord Shore of Stepney: My Lords, the Government need to be rather more self-critical about their failures to act in this matter. As has already been pointed out, we have known for a long time—much to the distress of many noble Lords on this side of the House—that Corus has been losing heavily financially. My noble friend the Minister gave us an illustration of just how much when he said that for every 10 pfennigs of change in the exchange rate between the euro and the pound £80 million of profit is wiped out. We are not talking about one lop or a 10 pfennig change; we are talking about 35 to 40 changes in the exchange rate over the past two years. Indeed, we are talking about hundreds of millions of pounds of loss. We are familiar with what happened with BMW and Rover and the closure, and large loss of car making, of the two great American car subsidiaries at Dagenham and Luton.
  That being so, has it really not gone home to the Government that they have to do something about the exchange rate, if they believe that it is misaligned—and they do? Indeed, my noble friend told us just how much only yesterday. We are dealing with what we have been told twice from the Front Bench is the most efficient, productive steel enterprise in Europe. Yet we are here today calmly talking about a very substantial closure. Either the Chancellor of the Exchequer must wake up to the realities of what the exchange rate policy is doing, or the Secretary of State for Trade and Industry had better get much tougher in his dealings with manufacturers who are behaving badly.
  Lord Sainsbury of Turville: My Lords, with the greatest respect to my noble friend, I believe that his desire to return to the policies of the past and the failed policies of boom and bust is not one that the great majority of British industry would in any way welcome. I see that my noble friend shakes his head, but, in reality, if we want to reduce the level of the pound, there is only one way that that can basically be done; namely, by convincing the financial markets that inflation will take off in this country and that there will be an extensive increase in the money supply, with all the inherent risks involved in terms of inflation rising. That is surely one of the lessons that has been learnt over the past 25 years. This Government have no intention of returning to those polices. If people want to put forward such policies, I believe that they should honestly say that increasing the money supply and the inflation rate is what they propose in order to bring down the pound. British industry should be asked whether that kind of instability and boom and bust is what they want.
  Lord Brookman: My Lords, perhaps I may begin by declaring an interest. I worked for some 20 years at the
  806
  Ebbw Vale steelworks, which is now one of those places destined to be closed. I must confess that I never thought that I would be present in this Chamber and hear from my noble friend the Minister—not of his making—that the heart would be ripped out of the Welsh steel industry. It is a sad day for me. Of course, even further job losses will take place in Redcar and elsewhere; and, indeed, there will be an unspecified number in other areas, probably 3,000, about which we do not know as I stand here today.
  Corus is wrong. It is short-sighted and, as many noble Lords will I am sure agree, it is grossly unfair. The company should keep its nerve. My noble friend the Minister is correct: manufacturing has a future. Toyota and Nissan showed that recently with their respective announcements. Corus is wrong in the whole area of consultation. Quite frankly, the situation is absurd. My noble friend said that the Government knew about the company's plans at eight o'clock this morning. That is unbelievable. Therefore, if ever there were a case that proved that further legislation should be introduced so that workers could have their due rights discussed in consultation, this situation has surely proved that point.
  My union, along with my successor, has worked extremely hard in a proper manner to put together a plan, a set of proposals. The latter was not formulated off the top of anyone's head in that sense: the proposals were properly constructed so as to try to save these jobs at Llanwern. They suggested the putting together of a consortium. That suggestion was rejected out of hand. That, in itself, is disgraceful. Workers have a right to be consulted and to have their views considered. If that union, the Iron and Steel Trades Confederation (ISTC), has a consortium ready to pick up the gauntlet in an effort to try to save those jobs, I believe that Corus should listen to the workers even at this late hour.
  Can my noble friend the Minister tell the House what the Government actually put before Corus in relation to the package? Indeed, the Welsh Assembly also maintained that it did so. Finally, will my noble friend or the Government be attending further meetings with the company to try to persuade those concerned that what they are doing is irresponsible and wrong for the British people?
  Lord Sainsbury of Turville: My Lords, I agree with my noble friend; there is a future for manufacturing in this country. Indeed, I believe that there is also a future for steel manufacturing in the UK. That is why we have asked Corus to reconsider its decision. I very much hope that the company will give serious consideration to the views that we have put forward today.
  As regards consultation, it is most regrettable that people hear of these collective redundancies by way of radio programmes rather than through proper arrangements from the company. That is why, on 18th January in the light of events elsewhere, the Secretary of State announced a review of UK arrangements for collective redundancies. As I said, this is no way for people to hear about such developments. I can tell my

  807
  noble friend that we did not go into great detail on the package of measures. It was not an enormous package, but it was dismissed out of hand by the company. Again, that is a sign that the company is not prepared to give serious thought to these issues.
  When proposals—though not worked-out properly—were put forward for the workers to take over some of these operations, it is extremely unfortunate that they were not given any consideration. I hope that the company will now reconsider the issues involved and sit down with the Government, the trade unions and the National Assembly for Wales to see whether we can overcome at least some of these difficulties and identify a way forward.
  Lord Marlesford: My Lords, I obviously realise the deep anxiety and concern of the local people in Wales as a result of this announcement. I recognise that Corus probably behaved less than tactfully. I also recognise that the company may have made a commercial mistake. I have not the slightest idea as to whether or not it did; indeed, I wonder whether anyone in this House knows whether or not it made a commercial mistake. Does the Minister recognise that the economic success of this country, over the past decade at any rate, has been largely due to allowing major restructuring of British manufacturing industry?
  I take the latest figures available for steel. At constant prices, the value of output of iron and steel from the UK increased by 32 per cent between 1983 and 1999, during which period employment in the industry fell by over 50 per cent. In the eight major manufacturing industries in the United Kingdom, employment since the end of the war has fallen by over 80 per cent; in steel by 82 per cent. During that period the total employment went down from over 4 million to well under 1 million. Yet we have an economy with high productivity and high output. Inflation for the past decade has been less than 4 per cent. As the Minister rightly says, that is one of the factors that makes the pound high. I wonder whether higher inflation would be a price worth paying in order to get a lower pound.
  Does the Minister agree that it is right to allow overall market forces to continue because otherwise we too could regress as France has done? France has considerable economic problems because it has failed to face up to restructuring.
  Lord Sainsbury of Turville: My Lords, I do not think this is a question of tact; it is a question of how a major corporation in this country behaves to its workers. I believe that in this day and age consultation and discussion with them about long-term strategy when in this difficult situation is absolutely fundamental to running a good business. As I say, this is not a question of tact; it is about how one runs a modern business appropriately.
  The Government are quite clear. We are not saying that we know better than Corus with regard to its strategy. What we are saying is that a company of this
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  size in these extremely difficult circumstances should be prepared to talk to the Government to discuss its strategy and the way forward so that it can convince the Government that it is following an appropriate strategy and adopting a long-term view and that it is not reacting to a short-term situation. When it refuses to do so, it cannot expect the Government or any other parties not to suspect that it is taking a short-term view. The behaviour of this company is not in tune with what we would expect of a major company. Of course, we are well aware of the importance of restructuring and, indeed, the necessity for it in many industries. However, this company has systematically restructured over a long period and has achieved incredibly high—indeed, the highest—rate of productivity in Europe for this kind of plant. The question, therefore, that must be raised is whether it is a long-term sensible decision to take the action that the company has done. That is what we question, not the need for restructuring to take place where it is necessary.
  Lord Davies of Coity: My Lords, this is an extremely sad day for the people of South Wales. It is not the first sad day that the people of South Wales have had to suffer. I think that we all recognise that for well over a hundred years the economy of South Wales was based on coal and steel which produced hundreds of thousands of jobs in their heyday. I take a leaf out of the book of my noble friend Lord Shore when he says that we should not calmly discuss the eonomics of the situation. I am not concerned in this debate about the exchange rate or restructuring. What I am concerned about is the impact that this action will have on people's jobs, on communities and on the quality of life in South Wales when these closures are implemented. I have always believed that we should consider the economics of the situation but that we should also remember that the economics must be geared to improve people's quality of life. Sometimes we have to stand back and say, "What is most important is how this impacts on people".
  My noble friend said that Corus employs 22,000 people in the steel industry in this country. When I left the industry 32 years ago in 1969, there were 17,500 people working in a single plant at Port Talbot where I had worked for 20 years. That is the difference. I congratulate the Government on attacking Corus for what I call "industrial vandalism" in this case. It is not considering the people who have produced the steel and helped to make the profits over a long period of time. The Opposition ought not to be carping about the Government's condemnation of Corus. They should support that condemnation. They should support the Government if and when they put in place support for the people involved. I say that for one big reason: it is not so long ago that the party opposite saw pit after pit close in this country, particularly in South Wales, damaging the interests of communities and

  809
  people. This House needs to face up to the fact that people are more important than anything else. I believe that the Government recognise that.
  Baroness Amos: My Lords, before the Minister replies, I remind the House of the statement in the Companion about limiting comments to questions to the Minister.
  Lord Sainsbury of Turville: My Lords, I understand the anger of people caught in this situation, as expressed by my noble friend. This is a devastating blow for the communities involved and, indeed, also for the workers who raised their productivity in the industry year after year to the highest level in Lurope. That is why we are again asking the company—I stress this—to reconsider the matter and to work with us to find a way forward.
  Lord Wedderburn of Charlton: My Lords, will my noble friend confirm two short points? First, long before eight a.m. this morning Corus came under legal obligations to inform and consult not only trade union representatives but also the Government. The failure to inform the Government has been sanctioned in statute by criminal sanctions for some 25 years. There is no need for a new law on this matter in the particular circumstances of the case we are discussing, although there may be such a need in the case of other employers. Does not my noble friend agree that when Ministers met Corus last week they should have told it that it was flying in the face of a criminal offence long dictated by statute and, indeed, departing from the normal consultation procedures of good employers? The good employers point has been mentioned, but as my noble friend mentioned Community rules, will be not also take account of the rules on our statute book of which Corus is flagrantly in contempt?
  Lord Sainsbury of Turville: My Lords, the noble Lord has raised an extremely important point. I do not wish to comment on it without further information on the details of the conversations that took place as that may indicate when decisions were made to take these actions. However, I shall take further advice on the matter. If I can obtain any further information, I shall write to the noble Lord and place a copy of the letter in the Library of the House.
  Lord Hardy of Wath: My Lords, some of us have watched the steel industry closely—I have watched the engineering steel industry closely and, I hope, helpfully—for a long time and have rejoiced at the enormous achievements of that industry. It was preeminent internationally only two or three years ago.
  My noble friend may be aware that at that time the industry and parliamentary representatives established beyond doubt that there were areas of unfair competition in Europe. We have heard nothing from Corus in recent years about problems unless it has mentioned them today. As a result of our happy relationship with what was then British Steel, we
  810
  attended the meeting two or three years ago when it explained the implications of the merger with the Dutch firm. We accepted its hopes and assurances which now do not seem to have been fulfilled. Is there any possibility that jobs are being lost in this country because workers here may have fewer employment rights than workers in partner firms in mainland Europe? Will the Minister pay particular regard to the point raised by my noble friend Lord Wedderburn about making clear that this business's interests are no longer with Britain? Instead they relate to the short-term calculation of profit wherever it can be planned, with no regard to the long-term interest in the United Kingdom which it should still possess?
  Lord Sainsbury of Turville: My Lords, I do not believe that Corus has suggested recently that unfair competition is involved. Any suggestion of unfair competition would be immediately investigated. The question was asked as to whether people have been made redundant in this country rather than in Holland because it is easier to dismiss them in this country. There is no great difference in terms of costs, if not always of procedures. In this case it is fairly clear that the position relates to the performance and profitability of the individual plants rather than differences in costs or procedures for redundancy.

  Social Security Fraud Bill [H.L.]
  4.11 p.m.
  The Parliamentary Under-Secretary of State, Department of Social Security (Baroness HON of Heigham): My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
  Moved, That the House do now resolve itself into Committee.—(Baroness Hollis of Heigham.)
  On Question, Motion agreed to.
  House in Committee accordingly.
  [The DEPUTY CHAIRMAN OF COMMITTEES (Baroness Nicol) in the Chair.]
  Clause 1 [Additional powers to obtain information]:
  Lord Higgins Lord Higgins moved Amendment No. 1:
  Page 1, line 7, leave out from beginning to ("(persons") in line 9 and insert—
  ("After subsection (1) of section 109B (power to require information,) there shall be inserted—
  "(1A) magistrate may, on an application from an authorised officer who has reasonable grounds for believing that a person—

  (a) is a person falling within subsection (2A) below, and

  (b) has possession of or access to any information about any matter that is relevant for any one or more of the purposes mentioned in section 109A(2) above,

  make an order requiring that person to provide to the authorised officer such information specified in the order as is information of which he has possession, or to which he has access, and which it is reasonable to require for a purpose so mentioned."
  (2A) After subsection (2) of section 109B").
  The noble Lord said: In moving the amendment which stands also in the name of my noble friend Lord Astor of Hever, I point out that it may be convenient

  811
  for the Committee to consider Amendments Nos. 28, 48 and 49. I thank the Minister for writing on a number of points raised at Second Reading; and for a briefing meeting with officials on what is an extremely technical and complex Bill of great interest to many outside organisations and people.
  At Second Reading I stressed that we on this side of the Chamber are keen that social security fraud should be reduced. In that context we support the main contentions of the Bill. None the less, it is important to take into account the considerable representations on the side effects of the Bill, in particular on the protection of data and, related to that, the violation of human rights. No doubt those themes will arise time and again. I hope that we shall be able to avoid undue repetition. We shall come later to a specific amendment on data protection. It may be convenient to deal with the detailed human rights aspect on the Question whether Clause 1 shall stand part.
  We dealt with the question of whether the title of the Bill shall be postponed. Governments are enthusiastic about this kind of title. It is difficult to oppose a Bill with such a title. The classic example was Mr Michael Foot's Employment Protection Bill. It had many objectionable features; none the less it was difficult to oppose. How can one oppose a Bill entitled the Social Security Fraud Bill? Perhaps we should change the title to the Data Protection Infringement Bill.
  Important issues are raised. It seems likely that a general election will not be long delayed and, therefore, the measure may come into that group of Bills which the Government may nod through on the spur of the moment. If there is any possibility that that may occur, given the title of the Bill, noble Lords must give detailed consideration to the Bill to ensure that it is as good as it can be since discussion in another place may be curtailed.
  Amendment No. 48 is a subsidiary amendment. It deals with electronic data. I shall turn to that later.
  The amendment provides that the way in which the Government wish to obtain information to prevent social security fraud should be circumscribed in a similar way to that which exists when trying to prevent abuse of drugs, criminal acts generally, tax fraud and so on. Previous governments have always felt it appropriate to protect the position by recourse to the courts in one form or another. That is what the amendment seeks to do.
  As the Bill stands, there is virtually unfettered discretion for authorised officers to demand information from many outside bodies. That should be subject to a review, perhaps only briefly, by an outside body. The problems are set out clearly in the correspondence contained in the bundle of responses to the consultation document, kindly provided by the Minister. At Second Reading I pointed out that that was only a summary of a summary. The noble Baroness has now given us the full information. From the response to the consultation process provided by the Data Protection Commissioner, one sees how deeply concerned the commissioner is about the Bill and its side effects. Her letter to the Secretary of State states:
  812
  "As you will see, I have been unable to support the proposals in the form in which they are currently made".
  So far as I can see, they are now in the same form in the Bill.
  The commissioner makes a number of specific points. She says:
  "The commissioner does not believe that the department has made a convincing case that the proposed interference with the rights of privacy is necessary".
  Nor does she believe that the proposed safeguards—a matter to which the European Court of Human Rights has attached considerable importance—are sufficient to protect the rights of benefit claimants and applicants. As the Committee will recognise, those are strong words. The commissioner does not accept that the means by which it is proposed that investigators should obtain information are fair. She is particularly concerned that there will be no prior judicial authorisation of the exercise of the new powers and that too many hopes are invested in the code of practice. We shall come to the code of practice later.
  The present legal framework is that private sector information can be released only if a court or judge order disclosure, if the individual has given consent, or if the organisation holding the data is persuaded that not to make the disclosure in an individual case would prejudice the prevention and detection of crime or the apprehension or prosecution of offenders.
  It is clear from the comments of the commissioner and other parties that the Bill would significantly weaken the legal safeguards on privacy and probably create the problem of whether there had been discrimination in some respects. We shall come to those issues later.
  Another important point is that the information will be disclosed without the knowledge of the person whom it is about. Hitherto we have been anxious to avoid that—witness the way in which one can obtain details of whether a particular credit rating has been affected.
  The commissioner finally suggests an alternative approach, which your Lordships may wish to consider, stressing not least the importance of asking people whether they will provide the information voluntarily rather than in the way set out in the Bill.
  Amendment No. 48 relates to the bulk provision of information. The explanations are rather naïve, saying that the measures that allow authorised officers to get general information on electricity, gas or telecommunications, for example, relate to the provision of information only on addresses, not on individuals. That is naïve, because, as much of the process outlined in the Bill involves cross-checking of data, it is not difficult to relate an address to the name on the electoral roll and thereby identify the individual to whom the information relates.
  There are also concerns about the scale of the operation. As we understand it—no doubt the Minister can give more details—the department envisages a very large operation on bulk information. The department may argue that the main amendment would result in some delay in getting the information,

  813
  but the points of principle I have addressed are very important. We are proposing the traditional approach that past governments have always adopted on drug trafficking, crime or other actions of fraud, rather than making the department the judge of whether it is reasonable for it to carry out an investigation, with no control exercised by any outside body, except in the limited case of local authorities, which will require the general, but not specific, authorisation of the Secretary of State.
  Baroness Hollis of Heigham: The noble Lord uses the word "judge". Does he accept that the authority against which the offence may have been committed is the judge of whether it needs information to establish that? It is not the judge of whether an offence has been committed. That will be for the courts to determine.
  Lord Higgins: Of course that is true.
  Baroness Hollis of Heigham: It is the substantive point.
  Lord Higgins: It is a substantive point, but it is not the only substantive point. The question is whether the so-called authorised person will have complete discretion, without anyone being able to check whether they have a justifiable suspicion or a firm basis for carrying out the investigation. We shall deal with that issue on many other aspects of the Bill. I beg to move.
  Earl Russell: I support the amendment, to which I have put my name. I join the noble Lord, Lord Higgins, in offering my thanks to the Minister, and through her to her officials, for their kindness, their capacity for taking pains, their courtesy and their great skill and efficiency in dealing with communications about this and many past Bills. They are a model of what a private office ought to be. It is a pleasure to deal with them.
  I also join the noble Lord, Lord Higgins, in his comments about fraud. Fraud is an evil. Where there is gold, there will be claim jumping. Where there is public money, there will be fraud. That must be fought. Fraud is a form of theft and is so recognised in law. The prevention of fraud is prima facie always a good and legitimate public objective. That is common ground between all of us. At the same time, all of us, on whichever side of the argument, feel a certain unease about the arbitrary character of the powers created in the Bill.
  The Minister and the noble Lord, Lord Higgins, were arguing a moment ago about the concept of judge and party in their own courts. The Minister is correct that the final judge of whether an offence has been committed is the court. Equally, the noble Lord, Lord Higgins, is correct that the final judge of whether there is a need to get the information about a particular person will be the investigating officer. The Minister may say that that is liable to control by the courts. So it is, but by the time that the courts are called in, the horse will have been stolen.
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  I, too, have seen the powerful and impressive memorandum from the Data Protection Commissioner, to which the noble Lord, Lord Higgins, referred. She drew attention to the number of people who wish to obtain information for their own private purposes and who are capable of using official procedures to bring it about. I recall one case that concerned the local women's refuge about a quarter of a mile from where I live, sadly now closed. A violent former husband succeeded in getting the address of the refuge through the benevolence of a kindly policewoman in his home town who thought that he wanted it entirely for benevolent purposes. Hope does indeed spring eternal. If the Bill becomes law, with the best will in the world it will encounter such cases.
  There is a growing respect in this country for confidentiality and the right to privacy. The problem lies in deciding which is the lesser of two evils. My late noble friend Lady Seear used to say that ethical decisions in politics were always a matter of choosing the lesser of two evils. It will be for the Minister to convince me that the methods that she is proposing are a lesser evil than those that they are designed to prevent. I say that without for one minute wishing to dispute that the evils that the Bill is designed to prevent are very great.
  The evil in the proposals in the Bill would be very much diminished by the judicial control proposed in the amendment. The Minister will produce a number of objections along the lines that the amendment will diminish the effectiveness of the proposals in the Bill. I understand that well enough. However, I am asking the Minister to convince me that that is the lesser of two evils. I believe it to be a fair request; and, in the course of setting out to convince me, I ask the Minister to take account of the proposals made in the light of the European Convention on Human Rights.
  If the Minister is to show that the proposal does not infringe Article 8.2 of the convention and that, in fact, it enjoys the protection of that article, she must show that what she is proposing is necessary. That, among other things, involves showing that the amendment would not be appropriate. If her proposal can be achieved by the means suggested in the amendment, which, other things being equal, clearly would be preferable, then the proposal itself is not necessary. However, she must show that.
  It is necessary to show that the remedy is proportional. It has been suggested, I believe, by the British Bankers' Association that the penalties to be imposed on benefit claimants are harsher than those to be imposed on tax evaders. Were that to be the case, there would be room for an argument that the remedy was not proportional. In order to come within the terms of Article 8.2, it is necessary to show that safeguards are in place. We may address how far that can be done in later amendments. However, it would be prudent for the Government to include safeguards where they are able to do so because that may improve their standing in future court proceedings.
  Justice points out that under the convention it is not an absolute requirement for intrusions into private life to be subject to judicial authorisation. However, the

  815
  European Court of Human Rights said in the case of Klass v. Germany that it is in principle desirable to entrust supervisory control to a judge. Justice argues that that principle should be reflected in the Bill. That would put the Government into a much safer position in any future legal proceedings. Therefore, to that extent, the amendment would be desirable.
  If the Minister can put forward reasons which persuade me that, in spite of all those advantages, the amendment is less desirable than the procedure laid out in the Bill, I shall listen. But it remains for her to convince me.
  4.30 p.m.
  Lord Grabiner: As I understand them, these amendments would render the Clause 1 powers expressly subject to the approval of a magistrates' court. I believe that the practical effect of the amendments, were they to be agreed, would be not simply to diminish—I believe that that was the word used by the noble Earl, Lord Russell, a moment or two ago—those powers but, in my view, to emasculate them to the extent that they would become unworkable. Magistrates' courts are already heavily overworked and Parliament would not be thanked for having unnecessarily increased that workload.
  With regard to the question of necessity, I believe that it should be borne in mind that the exercise of the powers will not inevitably or even probably lead to an arrest or prosecution. The powers are intended to enable, for example, DSS investigators to detect and prevent fraud and error. The introduction of what, in effect, would be an additional level of vetting is, I suggest, entirely disproportionate in that it would unreasonably cut down the value of the powers being granted in the first place.
  The point can be tested by reference to the drafting of the proposed amendment. First, so far as concerns the language of the existing Bill, the prerequisite for the exercise of the powers in the first place involves the need for the investigator to have reasonable grounds for believing that one or other of the matters currently listed in sub-paragraphs (a), (b), (c) or (d) have in fact happened or, as the case may be, are likely to happen in the future.
  I suggest that the presence of that pre-condition is the short answer to the point made by the noble Lord, Lord Higgins, in his opening remarks. He said that the power was unfettered. With great respect, that is not right. The power cannot be exercised absent the satisfaction of the investigating officer to the extent provided for under the terms of the Bill.
  The amendment, as drafted, introduces precisely the same test—on this occasion to be operated by the magistrates' court—as the one currently provided by the Bill which is to be operated by the investigating inspector or investigating officer of the DSS. I do not understand what possible advantage there can be in introducing precisely the same test—namely, that the magistrates must be satisfied that there are reasonable grounds, and so on—as the one which must be satisfied by the investigating officer. If the amendment were to
  816
  be adopted, I believe that inevitably it would result in delay and enormously increased expense. Meanwhile, without over-emphasising that concern, Rome is burning.
  I wish to make one other point which has already been raised by the noble Earl, but I emphasise it because it is important. A wrongful exercise of a power—that is, the power specified in the Bill as currently drafted—would be judicially reviewable. I believe that in those circumstances the position of the private individual is adequately protected without the need for these amendments.
  Finally, in the course of his opening remarks, the noble Lord, Lord Higgins, drew to the attention of the Committee some observations made by the information commissioner, as I believe she is now called. One point to which he drew attention was that, under these arrangements, a person would not know that he had been the subject of investigation. The information would be sought pursuant to powers without the knowledge of, so to speak, the target of the inquiry.
  The comparison was made with the situation relating to credit ratings. However, I suggest that there is a significant difference between the two sets of circumstances. With respect, I agree that substantive criticism can be made of credit ratings, although the current law allows precisely for that to take place. In such a scenario, and to give a clear example, an individual would be refused credit without knowing that the reason for the refusal was that the person deciding whether or not to give the credit was acting on the basis of erroneous information. That would be a very bad case. However, I dare say that, even as I speak, such cases are occurring hundreds of times out there in the real world.
  The distinction between that type of case, which, as I say, takes place at present under existing law, and the case with which we are concerned here is simple and obvious. If information is obtained pursuant to the powers that we are now discussing and it leads investigators to the conclusion that there is a case to be answered, inevitably the individual concerned will have to be invited to give an answer to the question. If, on the other hand, the investigators are satisfied that there is no case to be answered, that will be the end of the matter. With respect to the information commissioner, perhaps I may suggest that the point which she has put forward is not a good one.
  Lord Goodhart: Before the noble Lord sits down, perhaps I may ask whether the logic of his argument—that it is not necessary to get a magistrates' order in order to obtain this private information—would lead on to the argument that it is quite unnecessary to go to a magistrate in order to obtain a search warrant to search someone's house because the police officer who believes that there is reason to do so is satisfied in his own mind.
  Lord Grabiner: The concerns that drive the answer to the question of whether or not the obtaining of a search warrant should be made subject to an order of

  817
  the court would no doubt depend on the particular context. I know, for example, that such procedures and provisions apply in relation to serious revenue offences, or to the suspicion that there has been a serious revenue offence. However, it does not follow that the investigatory powers that are being sought would operate in a context that should be subject to the same considerations that statutorily will be applied, if that is the decision, in the case of search warrants.
  I turn to another important point in this context. We talk a great deal about the infringement of rights, and it is entirely right for us to do so. The Human Rights Act 1998 is an important part of our law. Articles 8 and 14 are critical in this discussion. We shall later discuss that in more detail. In that debate I shall certainly draw attention to the provisions of Section 29 of the current data protection legislation. That section legislates for the permission that is granted in the second paragraph of Article 8 of the convention, and it deals with the fact that it is right and proper to permit an interference with what would otherwise be people's rights under the first paragraph of Article 8 in a suitable case. A suitable case is one that involves the need to detect tax avoidance, or perhaps I should say tax evasion, a subtle distinction, but Members of the Committee will be familiar with it. It also involves the need to detect crime in its early stages. There is little point in closing the gate after the horse has bolted.
  The provisions are consistent with the entitlement that is granted under Section 29 and provide an opportunity to detect wrongdoing in advance and without the need to wait until it is too late to do anything about it. If we talk about necessity in this context, I respectfully suggest that Section 29 has to be taken into account. The relationship operates both ways: we need to take into account fairness to the individual and fairness to the community at large.
  Earl Russell: The noble Lord, Lord Grabiner, is correct to say that fairness works both ways, but he made a remark that surprised me very much. He said that he could not see that a useful purpose would be served by allowing the test that is currently in the Bill to be used by someone other than the investigating officer. However, it is surely fundamental, as a principle of law, of politics, and of common prudence, that having to consult someone else and rely on his decision before going ahead and doing what one wants to do is a valuable belt-and-braces double check on human judgment, which at all times is necessarily imperfect.
  I was also a little surprised by the extent to which the noble Lord relied on the argument that the courts would be overwhelmed by the body of work. However much that argument may have some substance in fact, it is capable of being worked to a dangerous degree of extension. If he relies on that argument I should be grateful if he would indicate what the point is beyond which he would not take it. How great an erosion of reliance on the courts would be allow in order to pursue his objectives?
  818
  The trouble is that the DSS and other government departments far too easily think that because something appears to them to be just and expedient they should be free to do what they want without further checks or controls. We all feel that, but it is not always good for us to be able to get away with it. I shall return to that point when we discuss the Bill's regulation-making powers. I detected just a whiff of that approach in the noble Lord's speech. I look forward to his further answers because I have not yet heard enough to persuade me.
  4.45 p.m.
  Lord Grabiner: I shall try to deal with the two points that the noble Earl made. On the first, I suspect that I was putting my argument inadequately. I pointed to the fact that the investigator has to be satisfied that there are reasonable grounds for forming the judgment that he has prima facie formed, and I discovered in the amendment that a similar test—indeed, precisely the same test—would be deployed. The point I was trying to make was that I find the situation illogical. A complaining individual, so to speak, may be targeted by the exercise of the powers, and it might be said, when the individual investigating officer had formed that judgment, that the individual's behaviour would be susceptible to judicial review; that is, to civil proceedings. However, that approach would disappear if the individual had to satisfy a magistrates' court of precisely the same test because that would involve criminal jurisdiction. The point I was trying to make was that that seemed an unnecessary and illogical confusion. I well understand the belt-and-braces argument, but the real argument is about whether the particular context justifies what I would regard as a rather onerous and burdensome way of going about things. That brings me to the noble Earl's second point, although I should be happy to give way to him if he would prefer me to do so.
  Earl Russell: No, the noble Lord should conclude his speech.
  Lord Grabiner: The noble Earl's second point was about how far we should be willing effectively to erode the legal process in favour of the individual. I am not in favour of eroding any legal processes for any individual. Apart from anything else, that would be inconsistent with my professional life. The more legal process there is, the better off I am. I thereby disclose an interest. In a more serious vein, the decision is essentially a matter of judgment. Are we discussing a situation that falls on the side of the line that requires the judicial approval of a magistrate before the matter can be taken any further? Alternatively—I contend that this is the case—are we on the side of the line that involves saying that it is good enough, given the context of a particular case, that the matter need not go to a magistrate because it could be dealt with effectively by an investigating officer who acts bona fide and in accordance with the requirements of the statutory provision?

  819
  What persuades me that it is unnecessary to go through the process of a magistrates' court—I appreciate that this may not necessarily persuade the noble Earl—is that if one exercises the powers, one is taken to the continuing process of inquiry. One is not taken to prosecution or conviction. One is taken to a process of further inquiry. If the matter is to go any further, there are adequate safeguards in the system—in the criminal process—for dealing with any complaint that may arise thereafter. I respectfully suggest that in many cases the matter will go no further but if it does there will be adequate safeguards to protect the individual.
  Lord Higgins: It may be convenient for me to intervene now rather than later. I want to take up some of the issues raised by the noble Lord, Lord Grabiner. I may not have fully understood his arguments. I am not, as Members of the Committee know, a lawyer. He keeps referring to a magistrates' court. I searched in vain in the amendment for such an expression. That is a relevant consideration. Having said that, the question is whether it is appropriate for a magistrate to take an impartial view on the issue. The noble Lord pointed out that the test is much the same in both cases but that there is a difference between the test being applied by someone who is an authorised officer of a department and by a magistrate who will adopt an impartial view and who may be able to appraise the situation. After all, those authorised officers are not going to be at the level at which decisions are taken; for example, cases in regard to Inland Revenue fraud and so forth, where it is an impartial officer in the department.
  Judicial review may arise if the matter comes to court. But all these investigations are going on without the individual's knowledge. It is only if the department eventually decides that there may be a case to answer that the individual is told. None the less, a great deal of this information will start floating around the system and one of the worries I have about the Bill generally—perhaps reflected in the views of the commissioner—is that the information, once it is in the system, will tend to leak from one part to another. Hitherto there have been the most stringent Chinese walls between various government departments, but increasingly those seem to be disappearing.
  It is for those reasons, among others, that we feel there is a case for this amendment. The noble Lord, Lord Grabiner, says that the Bill will be emasculated. But such provisions did not emasculate any of the Bills concerned with other offences. As far as I know—perhaps the noble Baroness will tell us if I am wrong—in other instances there is a degree of impartial review of whether or not it is appropriate to go ahead.
  Lord Grabiner: Perhaps I may respond briefly to those points. I did say "magistrates' court" and the amendment refers to "a magistrate". I presume that what is intended is that the matter can be dealt with by a single magistrate, and I stand corrected accordingly. However, it does involve the judicial process. I do not know how one goes about that; I have not been in such
  820
  a place for many years. But I am sure that it takes up valuable time and is expensive. That may not be so for an individual case but, multiplied by the anticipated 900,000 figure, it comes to a lot of time and quite a lot of money.
  I did not say that the provision would emasculate the Bill; I said that it would emasculate the Clause 1 powers with which we are concerned in this amendment. My final point—and then I shall sit down—is that we are concerned about investigating officers who will, as I understand it, be nominated persons specially trained for the tasks involved in this legislation. They will be brand new powers, the use of which will require proper training and education.
  Earl Russell: I hope that the Committee will forgive me for taking up one more point made by the noble Lord, Lord Grabiner, but if I do not take it up now I shall certainly have to take it up afterwards.
  The noble Lord attempted to put on all fours the authorisation by a magistrate and judicial review. But there is a significant difference in that one of them happens before the event and the other happens after the event. Very often by the time information gets into the public domain the damage is already done and any attempt to restore it is too late.
  The Data Protection Commissioner mentioned the possibility of bribery. Let me suggest a possible case. It is not likely, but I am sure that the noble Lord will not say that it is impossible. Let us imagine a newspaper, in collusion with an investigating officer whom it has paid, wanting to look at the bank account of a Minister and to discover where he spent a specific night. It finds that he spent the night in a double room at a time when his wife was certainly elsewhere. That would be of considerable interest to the newspaper. It would spread widely around the media and cause a great deal of comment. In such a case judicial review after the event would be otiose and I would be surprised if the Minister resorted to it.
  Lord Grabiner: First, the example is a "homely" one. But what was absent was the existence of another party in the double room. By itself it would be entirely innocuous information. But that is beside the point and not much to do with social security fraud.
  The noble Earl talks about the information being available at large, but that is not the case. We are dealing with information which will be known, on the examples with which we are concerned, to the investigating officer and to the magistrate to whom the matter has been presented, or simply to the investigating officer alone. If the noble Earl is talking of circumstances where, improperly and through bribery and corruption, the individual investigating officer transfers that information to a third party, with the greatest respect I must point out that this amendment will not help in the slightest. The information will be bribed out of the investigating officer and passed on to a third party and nobody will go anywhere near a magistrates' court. If that is the

  821
  purpose, or part of the purpose, of the introduction of this provision, it will not prevent that sort of grossly improper behaviour.
  Lord Higgins: The person being bribed will not have the information because he would not have managed to obtain a magistrate's order.
  Lord Grabiner: As I understand the proposed amendment, the individual seeking to obtain the order has to satisfy the magistrate that he has reasonable grounds for wanting the order. So ex hypothesi he must have the information before he goes to the magistrate. He cannot go to the magistrate with a blank piece of paper. He must say, "These are the facts of the case. I reasonably believe that an offence has been committed by this individual and would like access to", whatever it may be. But he cannot do that unless he has the information to enable him to make the application in order to exercise the powers. That is the point.
  In this example, the individual would have the information. He would not need to go to the magistrate in order to exercise the power but, in return for payment, he would sell it to a third party. I believe that was the example posited.
  Baroness Noakes: Perhaps I may take the noble Lord, Lord Grabiner, back to an earlier remark he made on the importance of the training and experience of the individuals within the Department of Social Security, or other authorities, exercising these judgments. With respect, that is perhaps a little of a red herring because all public servants engaged in carrying out such activities should first have proper training in them, whatever their level, whether they are making decisions and exercising powers under the clauses of this Bill or undertaking more commonplace activities.
  Following on from that, in the light of the noble Lord's great experience and my lack of knowledge, can he say whether he is aware of any precedent of officials having similar powers to ask for information? There are many existing precedents where other authorities—for example, the Commissioners of Inland Revenue—are asked for decisions before those powers are taken.
  5 p.m.
  Baroness Hollis of Heigham: It may be convenient for the Committee if I seek to address some of the points raised so far.
  These amendments seek to require DSS and local authority authorised officers to obtain an order from a magistrates' court, or a magistrate, in order to obtain any information from the organisations listed in new Section 109B(2A). I take this issue seriously and will try to give a careful reply. It is clearly a matter of concern to Members of the Committee. When people claim benefit they know that they are required to tell the truth. We shall make it clear that what we are told may be checked with third parties. If a person tells a lie
  822
  in the light of all that, we believe that we should have the right to check up on them. We also have a responsibility to the taxpayer to do so.
  I want to make three points. First—this point was made by my noble friend Lord Grabiner—if the DSS and local authorities had to obtain a court order every time they wanted to check the information provided by a claimant, it would significantly hamper their investigations. The process would certainly take too long to enable us to check information before we pay claimants. That would mean that we would have to let fraud into the system that could have been prevented. It will lead to serious delays in which relevant information could vanish and financial matters be re-arranged. We would be asking magistrates to judge not whether a fraud had been committed but whether there was sufficient evidence to collect further evidence to establish that a fraud has been committed. The delays could be huge.
  Perhaps I may give an example of a simple case. Someone moves to a university town and claims housing benefit. We suspect that that person is a student, but we do not know. Therefore, under the amendment we need to seek an order from a magistrate to enquire of UCAS, the university admission system. We then find that he is also claiming housing benefit at his local address. We check his address and find that it is in Norwich and that there he is an owner/occupier.
  In the course of that simple investigation, we need to go to UCAS, because he is a student. We then find that he is claiming housing benefit and need to check that with his landlord. We then need to go back to Norwich, where he is also claiming benefit and where we find that he is an owner/occupier. That would involve four visits to magistrates to process one simple case.
  Let us complicate the case and suppose that the claimant has now left Norwich, has moved to Cambridge to be a student and is subletting the house in Norwich to somebody who is also fiddling the benefits system. That would add another two or four visits to magistrates. It would require perhaps eight visits to magistrates for one pretty simple case. We cannot work the system like that. Perfectly properly, the noble Lord pressed my noble friend on how far we could go. However, we cannot neglect this point.
  We estimate that we should have to make around 900,000 inquiries per year of the private and public sectors. That would require 3,500 applications to magistrates every working day compared to the police average of around 270, which would be 15 times as many. The increase in workload would be significant. Magistrates have a caseload of about 4 million cases per year. The proposal would add an extra 25 per cent to the caseload of a single magistrate. Inevitably there would be delays in dealing with real cases on the streets of young thugs and so forth, about which we are all rightly concerned. All the cases we investigate are potential frauds. Only 6 per cent of offences recorded by police in March 2000 were fraud or forgery offences. My first point, therefore, is that the amendment would create serious delays.

  823
  My second point is that there would be a serious impact on the magistracy to deliver law and order in other areas of its work. My third point, which is a direct response I made to the noble Baroness, is that we do not seek exceptional powers. It is not true that other state bodies can obtain access to a person's bank details only after obtaining a court order. Other government departments have a huge range of powers. I could discuss, for example, Customs and Excise, the Inland Revenue or the DTI. However, I shall take an example which is somewhat closer to the DSS in style; that is the Financial Services Authority and the powers given to it by the Financial Services and Markets Act 2000. That was a general power to require information or documents which may reasonably be required in connection with the discharge of its functions under the Act. The FSA can write to a person asking for the production of information or documents within a reasonable time-scale or it can send an officer to whom it has given written authorisation. That person is required to provide that information or documents without delay and may also be required to take any reasonable steps the authority may specify to verify the information provided.
  I chose that example out of 20 I could give because the businesses concerned include banks, building societies, insurance companies, friendly societies, credit unions, Lloyds—I do not know why we have left that out of the DSS—investments and pension advisers, stockbrokers, professional firms, fund managers and derivatives traders. I could produce similar examples, though possibly not as full, of all other government bodies seeking similar powers without first needing to acquire judicial authorisation.
  The noble Lord, Lord Goodhart, mentioned the police. He tried to suggest that we are asking for DSS investigators to enjoy greater powers than the police. That misses the point. The police need different powers because they are doing a different job. They have greater powers, certainly, than DSS investigators. They can arrest people on suspicion of committing an offence. With a warrant they can force entry to premises and carry out searches. They can remove goods that appear to be material evidence. DSS investigators do none of that. We have no plans to seek powers for them to be allowed to do so.
  The noble Earl, Lord Russell, asked which I thought was the lesser evil. At the end of the day, benefit fraud costs between £2 billion and £4 billion each year. In comparison, credit, debit and charge card fraud losses in 1999 were less than £0.2 billion. The gross loss of cash in transit from armed robbery in 1999 was less than £0.01 billion compared to our £2 billion to £4 billion. Losses of theft and antiques is estimated at £⅓billion to £½ billion per year, and approximately £0.0035 billion worth of counterfeit currency was removed from circulation in 1999.
  At Second Reading I mentioned the assessment of benefit fraud by the National Criminal Intelligence Service. That organisation carried out an impact analysis in which it registered benefit fraud as high in the list of high-impact crimes and alongside drug trafficking, intellectual property theft and revenue
  824
  fraud. Members of the Committee, including the noble Earl, Lord Russell, gave examples of that. As has been said, around 17 per cent of drug traffickers are also involved in social security fraud. The economic cost of all crime in this country is estimated at £50 billion per year. Social security fraud makes up around 4 to 8 per cent of that cost.
  I seek to persuade the Committee that the powers we seek are in no way out of the ordinary. They are exercised by other bodies, both government bodies and the Financial Services Authority. To follow the path of the amendment would mean unacceptable delays, with perhaps three, five or 10 visits to the magistracy to collect information before we could prosecute one simple case. The implications for the capacity of the magistracy to deal with other areas of street theft and the like would be seriously impaired.
  As my noble friend stated, these powers would not be exercised by anyone. Information will not be "floating around at large". There will be strong safeguards for the use of the powers. Only a handful of staff in each of the 13 areas of the DSS would he authorised to use the powers. They would be able to do so only within the terms of the code of practice, which we shall discuss later. All the staff would be thoroughly trained. Their use of the powers would be checked by senior managers, including their access to electronic information. If they misuse that power, disciplinary proceedings, including dismissal, would follow. As was said at Second Reading, there is the additional protection of the Data Protection Act and the Computer Misuse Act and the like.
  We need the powers to assemble the information to establish a case to bring before the courts. We have to go to the courts to get the powers to seek to establish the information. That is, above all, post hoc propter hoc, in which we must already have the information we seek in order to prove the case. That would seriously fetter us. It would produce delays and burdens upon the courts. Above all, we would be asked to produce to the magistracy the evidence we seek to establish. That would make it difficult to eradicate the fraud from the system, which all of us want.
  Finally, the powers will be exercised by those who have been professionally trained, and who will be properly supervised, and by a narrow, select group of relatively senior officials. I hope I have persuaded the noble Earl, Lord Russell, that the powers will be exercised properly with discretion. Without those powers, swathes of fraud, of which we may have high suspicion, will go unchecked and unpunished to the cost of us all and to the defrauding of our welfare state.
  Lord Higgins: We shall consider carefully the points mentioned by the Minister. I believe there has been confusion about the wording of the amendment. As I pointed out, it does not refer to a court but to convincing a magistrate that it is appropriate I hat such an investigation should go forward. There appeared to be a little confusion in one respect; namely, whether in going to the court the investigating officer had the

  825
  information necessary to gain further information. Perhaps if the noble Lord, Lord Grabiner, looks at Hansard tomorrow he will find—
  Baroness Hollis of Heigham: How would an official persuade a magistrate that he had reasonable grounds unless he already had some of the information he was seeking?
  Lord Higgins: We shall come to the question of why he had information which justified investigating a particular individual. Clearly, if an official is going to a magistrate to obtain permission to do so, he will need to have some substantive information. However, if he does not need to go to a magistrate, he may go ahead without a justifiable case. For that reason, we argue that it is appropriate for him to go to a magistrate—not necessarily a magistrates' court because we do not want them to foul up their general procedure.
  The Minister added up the number of visits which might be necessary but I was not clear why, if an investigating officer had a reasonable basis for going ahead with inquiries about a particular individual—and she gave the example of the student—he needs to return to the magistrate time and time again. Presumably, he could obtain permission to approach all the various sources—
  Baroness Hollis of Heigham: No, not until the investigation had started would he know the knock-on consequences of that investigation and the levels of possible deception involved. When he first went to the magistrate, he merely thought that someone had moved to a university town and might well be a student, even though that person was claiming benefit to which he was not entitled. In obtaining the magistrate's permission to investigate that, in the course of his inquiries he uncovered the fact that there was a home in another town. In order to investigate whether the person was an owner/occupier, he needs a second permission from the magistrate. Then he discovers that the person is subletting and he needs to investigate that.
  All that information would be gathered over a period of time. However, under the amendment as posited, the investigating officer would need continually to return to the magistrate to obtain further consent to seek information from a new body because a fresh possibility of fraud had occurred.
  Lord Higgins: I am trying to envisage the circumstances which the noble Baroness outlined. It seems to me—I may be wrong—that the investigating official begins by saying, "I want to obtain information from a particular source". The noble
  826
  Baroness is saying that obtaining that information will direct that he should go to someone else along the line—
  Baroness Hollis of Heigham: No.
  Lord Higgins: That is not what she is saying. I thought that it was.
  Baroness Hollis of Heigham: I am sorry to labour the point. The example I gave was of someone who moves to a university town but is claiming housing benefit. As a result, the investigating officer wishes to discover whether that person is a student. In order to do so, he has to go to UCAS or to the university authorities and under the amendment he receives the authorisation to do so. In the process of searching for that information, the official discovers a home address different from the university town address. That means that he must return to the magistrate to obtain information about that home address. In the process of doing that, he discovers that the person is claiming housing benefit and there may be a suggestion from some source that the person may own the property. In that case, he has to return to the magistrate to discover whether the person owns the house and is therefore illicitly claiming housing benefit. So we go on.
  The point is that each of these steps could not have been predicted. The information thrown up at the previous stage set up the next step. One is putting together a jigsaw and does not know what the final shape of the picture will be. One has reasonable grounds for believing in the original offence but, under this amendment, when a simple case of fraud crops up one would have to revisit the magistrate to obtain permission to investigate.
  The result is that something which could have been sorted in a couple of days might take a month or more. By that time, the investigating official might have lost the person he was seeking to pin down in terms of fraudulent behaviour. It would be extremely difficult—extremely difficult—ever to pin down someone who was at all adept at manipulating the system.
  5.15 p.m.
  Lord Higgins: It is difficult to debate the matter in this way. None of the large number of representations we have received has dealt with it. There are two points to be made. First, it might be reasonable to suppose that the highly trained officials would foresee most of the consequences of the case which the Minister mentioned. Alternatively, if they originally had a prima facie case for obtaining approval to go to any of the sources of information specified in Clause 1—
  Baroness Hollis of Heigham: Is the noble Lord saying that all they need is reasonable grounds for access to a source, that they then do not need to go back to the magistrate and that they can have a lucky-dip at the rest? If so, he is conceding our argument.
  Lord Higgins: No, I do not believe that I am conceding the argument. Perhaps I may think about what the noble Baroness said in that context.

  827
  This has been a helpful debate in a number of respects. We shall need to consider carefully the extent to which arguments about delay are justified. We must also consider the Minister's argument about the extent to which such information is already obtained by government departments without the safeguard we are suggesting would be appropriate in this case. I should be surprised if the Inland Revenue could simply ask a bank for the information it required without any form of judicial authority whatever. But perhaps I may check up on that.
  I am grateful to the Minister for her reply. No doubt we shall need to consider whether it is appropriate to return to the matter at the Report stage.
  Lord Grabiner: Before the noble Lord sits down, perhaps I may clarify one point relating to the exchange which took place between us. It is probably better to have it in Hansard tomorrow rather than not at all. The exchange stemmed out of a point put to me by the noble Earl, Lord Russell. The example given was that of a dishonest investigating officer colluding with a newspaper and selling the information on. The point I was trying to make was that a sufficiently determined dishonest investigating officer would be able to obtain the necessary information without the need to go through the magistrates' court procedure, and effect his dishonest behaviour. I did not, and do not, believe that the proposed amendment could stop such behaviour.
  All one can say is that such behaviour is criminal under the existing legal rules and will be dealt with accordingly. However, the positing of that as an example of a case to provide a justification for the amendment is not right and I do not agree with it. I hope that I have sufficiently clarified the position.
  Lord Higgins: With great respect, I do not know that it is a particularly helpful example. Be that as it may, if we do not carry the amendment, the corrupt official will not have to go through the magistrates' court.
  We shall need to consider the Minister's remarks carefully before the Report stage. In the meantime, I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Lord Higgins Lord Higgins moved Amendment No. 2:
  Page 1, leave out line 12.
  The noble Lord said: Amendment No. 2 relates to particular people from whom the department may request information. Amendments Nos. 2 and 3 relate to banks and other similar financial organisations. It is unrelated to our recent broader debate but particular aspects are important as regards the banking industry. Indeed, the banks have made strong representations and expressed concern about the Government's proposals. They point out that they are in a different position from many of the other bodies described in Section 109B(2A) because banking transactions are subject to a duty of confidentiality which does not apply to, say, electricity suppliers. At the other end of the spectrum, lawyers, doctors and so on are subject to
  828
  a duty of confidentiality. My understanding is that, in the context of the report of the Joint Committee on Statutory Instruments, the Government do not propose that the provisions of the Bill should breach confidentiality as far as concern such professionals.
  It may be that in a sense banks fall in the middle of the spectrum between the electricity industry, which, as far as one can see, has no great duty of confidentiality, and lawyers. As I understand the position in law, the leading authority on the subject is Tournier v National Provincial and Union Bank of England [1924] 1 KB 461. That case establishes that a banker is under a contractual duty to keep confidential information gained from a customer's account. There are exceptions to that: where there is a disclosure under compulsion of law, which would clearly arise if we passed the Bill as it stands; where there is a duty to the public to disclose; where it is in the interests of the bank to require disclosure, although that appears to be rather strange; or where the disclosure is made with the express or implied consent of the customer.
  Therefore, at present the legal position of the bank is clear cut. If we adopt the Government's present proposals in the Bill without the amendment debated a few moments ago, bank customers will suspect that their information may be disclosed to the department, whether or not there is any wrongdoing on their part.
  As I understand it, at present where the police seek information to aid an investigation they must turn to a magistrate under the Police and Criminal Evidence Act 1984 and to a judge in a case involving drug trafficking. I do not quote all the individual citations. They must go to court or to a judge if they are to investigate bank books and so on. In a case of suspected fraud they must go to a judge or general commissioner of the Inland Revenue who is independent of the staff who carry out the investigation. That raises a problem in the context of the earlier remarks of the noble Baroness. The Minister said that the Inland Revenue could obtain bank accounts. Without any judicial authority, my understanding from the banks is that that is not the case. Perhaps the noble Baroness can explain the authority to the Committee.
  Baroness Hollis of Heigham: Obviously, if I mislead the noble Lord I shall write to him. I understand that the Inland Revenue can routinely require information from banks about interest earned by a customer's bank account. That information is required by the Inland Revenue in calculating the sums due.
  Lord Higgins: Is that only in regard to the interest?
  Lord Grabiner: Perhaps I may assist my noble friend and the noble Lord. My understanding—I suspect that the noble Baroness, Lady Noakes, knows more about this than all of us put together—is that any interest

  829
  earned on any account in excess of £15 a year is information to which the Inland Revenue is entitled by statute without the leave of any court.
  Baroness Hollis of Heigham: I also understand that the Inland Revenue can require information about a landlord's properties and tenancies if he earns income from them.
  Lord Higgins: I believe that that is the case as far as concerns interest. However, that is rather different from obtaining a copy of an individual's bank statement.
  Baroness Hollis of Heigham: With the greatest respect, unless it is a particular kind of account one can work it out.
  The Deputy Chairman of Committees (Baroness Nicol): I remind the Committee that the amendment has not yet been moved.
  Lord Higgins: I am grateful to the noble Baroness. We must clarify the situation. I do not believe that the position is as clear as the noble Baroness supposes. Otherwise, I do not see why, if these investigations are on all fours, a judge or general commissioner is required to give approval in the case of suspected tax fraud but not in the case of social security fraud. The two matters are not so different that it is inappropriate to say that the same level of restraint should be imposed. The question that arises is why information about those who are said to be guilty of social security fraud should be freely available but the obtaining of information about those who are involved in what may be a more serious tax fraud must be subject to the judicial process that I have just outlined. No doubt the noble Baroness will write to us in her usual courteous manner if that is not the case.
  As I understand it, there will be a considerable number of investigating officers in the 14 departmental areas. I also understand that 409 local authorities concerned with housing benefit will be required to obtain information if the Bill is enacted. Since it is understood that there will be a large number of routine investigations considerable costs will be imposed on the banking community, not only as far as concerns the customer but, in the context of a later debate, his or her family or relatives. The banks have expressed considerable concern in relation to their professional duty of confidentiality.
  The banks are also concerned, in the context of related amendments, that they may give false information, If fraudsters have given false information to the department they may well also give false information to the bank. The question is: to what extent are the banks responsible for the validity (if that is the right word) of the information that they are asked to provide? In particular, the banks are concerned that they are themselves subject to fraud on a significant scale in relation to credit cards and
  830
  banking generally. The question posed is: to what extent are they responsible for the accuracy of such information?
  A related question is the electronic communication of information from banks to the department. There is a worry that because of the convenience of obtaining information electronically—some of those involved with the Internet share the concern—it may be that its scope is broader than that which is necessary to carry out the investigation. In this context the question arises whether, if this is carried out by means of electronic communication, there will be an audit trail of the extent to which the investigation carried out by a particular officer has been authorised. My understanding is that it is the intention of the Government that in the case of a specific investigation by an officer there should be an audit trail to enable the department to ensure ex post, as opposed to ex ante, that it has been justified.
  I hope that the noble Baroness will be able to reassure us on these points. There are other reactions from the banking association with regard to remarks made at Second Reading, but I do not believe that they are relevant to this particular amendment. I beg to move.
  5.30 p.m.
  Baroness Crawley: Amendments Nos. 2 and 3 seek to remove banks and building societies from the list of organisations required to provide information. If we start from the proposition that most of the fraud we are talking about today stems from the hiding of income, assets or capital, the consequences of this group of amendments will severely restrict the effectiveness of the campaign that I am sure Members of the Committee are signed up to, which is to tackle the £2 billion fraud bill that the British taxpayer is landed with each year.
  As my noble friend Lord Grabiner pointed out in his report, information from banks and loan companies is already required by the DSS, but—and it is a very big "but"—that happens only if the claimant admits to having a bank account in the first place. Staff at the bank are then entitled to call for bank statements to check for any savings or signs of regular payments from a job or whatever financial pattern is relevant. However, if the claimant withholds that information at the start, there is at present no way that the Benefits Agency can know that the account exists.
  The Bill allows for information already held to be obtained from banks and other loan and credit companies without the reliance on the claimant's willingness or otherwise to divulge the full picture of his or her financial circumstances. That seems to me, as someone who is not a lawyer, to make a good deal of sense. We should look at the issue from the point of view of enabling the banks and loan companies to have the most effective route of tackling the enormous £2 billion and more annual fraud bill. I support the effective route put forward by the Bill because it is done in the context of a limited kind of inquiry, with many safeguards built into it, that focuses only on the situation of the claim itself.

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  The noble Lord, Lord Higgins, said that the banks are very concerned about the Bill. They have written to all of us involved in the Bill. But they have also—I am sure the noble Lord, Lord Higgins, will agree with me—stated in their letters to us that they are willing to work with the DSS to tackle the enormous problem of fraud. So it is important that we say also that the banks have been positive in their response to the Bill.
  Earl Russell: Before the noble Baroness sits down, without wishing to dispute any of her argument, can she confirm that the figures for the total amount of fraud are estimates rather than facts?
  Baroness Crawley: Yes. I confirm that we talk about £2 billion as an estimate, but it is probably far more than that.
  Baroness Hollis of Heigham: I am not entirely sure whether that was the point the noble Earl was seeking to establish. I am happy to confirm my noble friend's statement.
  The purpose of Clause 1 is to enable the DSS and local authorities administering housing benefit and council tax benefit to check information with independent sources where claimants are suspected of hiding their true circumstances; although of course if all claimants told the truth these provisions would never be necessary. It is precisely because those who have something to hide—hide because they lie—that we need information beyond that which the claimant is willing voluntarily to give us. That is the core of the Bill. It presumes, I suppose, a dose of original sin in those who are fraudulently cheating the system.
  The effect of the amendments would be to prevent the DSS and local authorities from obtaining that information we need most from the organisations that are most likely to hold it. The amendments remove banks, building societies, credit unions, organisations that accept deposits of money and organisations whose whole business, or a significant part of it, consists in the provision of secured or unsecured credit, from the proposed list of persons from whom information may be required. They also prevent the authorised officers from obtaining information from organisations whose whole business, or a significant part of it, consists in the provision of secured or unsecured credit.
  To amplify the point made by my noble friend, of the £840 million we estimate that the DSS lost last year through fraud in income support and JSA alone, £400 million of that—nearly half a billion pounds—was due to people lying about their earnings, other income, and capital. Other than from the claimant himself, who of course has a vested interest in lying about the matter, how do Members of the Committee propose to help the DSS to find out what the truth is about people's earnings, their other income and capital? Those who propose these amendments, if they accept the broad-brush policy of seeking to nail down fraud and then remove the major source of information from which we can obtain the evidence that someone is committing fraud, have a moral responsibility to tell the
  832
  Committee how that information can be obtained. I have heard not a word today of where that will come from. If not the banks and building societies, who will tell us what that person's capital, other income and earnings are?
  I could go on to talk about the organisations; I shall not. But our definition would enable authorised officers to make inquiries of a full range of organisations, including hire purchase, credit card and cheque-cashing shops. The definition of "organisations listed" would not cover organisations where the provision of credit was not a significant part of their business. I was not pressed on this matter by your Lordships, but it is right to put it on the record. For example, we would not be approaching local shops providing credit to loyal customers or companies that provided season ticket loans. That would be, in the words of the noble Earl on a previous amendment, a step far too far.
  Perhaps I may give the noble Lord, Lord Higgins, an assurance that if a bank gave us unknowingly incorrect information on what its responsibility might he in that situation—again I am happy to put it on the record—the bank would not be in any difficulty with the DSS obviously, or the Government, if it complied in good faith with a request made under these powers. It would not be the bank's fault if the customer had lied to it, as seems quite possible.
  Members of the Committee may also like some reassurances as to the type of information that we would not require. We only want information that is directly relevant to the circumstances of a benefit claim. So we would not want, for example, any information pertaining to medical history unless it was a medically-based benefit, such as one relating to a disability.
  Perhaps I may give an example, as that may help to clarify our thinking on this point. A woman could allege that her ex-partner had been claiming benefit while self-employed for many years. She has no evidence of this income, but we have no reason not to believe that she is giving us this information in good faith, as opposed to malice or whatever. She does know that he has several hire purchase agreements and a credit card. After all, if he was self-employed she might well have done his books for many years. An authorised officer under the Bill could check with the hire purchase and credit card company to find out what income, capital or assets had been declared in the applications for credit, and thereby obtain evidence of the fraud.
  If we lost that provision, we would lose a crucial and pivotal source of information. Worse, we could be encouraging a greater use of other services to evade detection. For example, benefit cheats might use a cheque-cashing shop rather than deposit cheques in a bank.
  For all these reasons, if a claimant lies—we must presume that someone committing fraud is lying—the only way we can find the correct information is by asking the organisations that the amendment excludes. If Members of the Committee can suggest any other

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  way to deal with the points of other income, other earnings or capital, I should be glad to hear it. But if they do not and are insistent on the amendment, they are suggesting to the taxpayer that the taxpayer should be happy to continue to subsidise at least £500 million worth of fraud per year, because they are denying the investigators the powers that they need. I hope the Committee will not pursue the amendment.
  Lord Higgins: Perhaps I may stress—I hope that I do not have to do so on every amendment—that with these amendments we are seeking to establish what is the case for the powers that the Government wish to have. I say at once that that does not mean that we are in any way condoning fraud. On the contrary, we are anxious that it should be prevented and that appropriate action should be taken.
  Baroness Hollis of Heigham: How?
  Lord Higgins: I am coming to how. As the noble Baronesses, Lady Hollis and Lady Crawley, will know, the banks have made it clear that they are prepared to co-operate with the proposals. However, they are concerned about their duty of confidentiality. That is why they would certainly support the previous amendment. The two issues are related.
  I ask the noble Baroness to clarify one point in the example she quoted. Are we to understand that if an investigating officer takes the view, for whatever reason, that an individual may be engaging in social security fraud, he will establish whether that individual has a bank account? If that is so, will he ask every bank and every building society whether that is so?
  Baroness Hollis of Heigham: No. As the Bill is currently drafted, an investigating officer has to have reasonable grounds for believing that a benefit fraud or an offence against social security legislation has been committed, is being committed or is likely to be committed. Around £600 million of fraud a year arises primarily because people have undeclared earnings while drawing benefit. But there are other forms of fraud—for example, where someone is drawing money as a lone parent while cohabiting—which would not necessarily involve any interchange with a bank. That would be a different kind of fraud on the benefit system. It would be by virtue of the family relationship.
  Lord Higgins: I understand that very well but it does not relate to the point I was making. If the investigating officer suspects, for whatever reason, that someone may have a bank account, will he ask every bank and building society, "Do you have a bank account in the name of", whoever it may be?
  I have a second point to make before I seek to withdraw the amendment. The noble Baroness has now assured us that the banks are not liable if they pass to the department information which has been passed to them fraudulently. But what is the position if the bank happens to have inaccurate, incomplete or wrong
  834
  information and passes it to the department? Is the bank liable for the inconvenience if a prosecution arises as a result of the bank having passed on that inaccurate information?
  5.45 p.m.
  Baroness Hollis of Heigham: The first port of call would normally be CIFAS or a credit reference agency. It would establish the bank or building society account the individual handles or has access to. That is the route. In the normal course of events, one would not need to track 15, 20 or 40 different kinds of banks to see whether any of them had the individual as a customer.
  On the noble Lord's second point, my understanding is that an organisation would be liable under the law only if a fraud had been committed against us; that is, that it knowingly gave us incorrect, incomplete or misleading information.
  Lord Higgins: I take the noble Baroness's second point, which she expressed very clearly. As to the first one, we shall need on subsequent amendments to consider the situation with regard to CIFAS. If I understand her correctly, she is saying that if the department's investigator goes to CIFAS, he can simply say, "Does Mr Bloggs have any account with any financial institution?", and CIFAS will be able to say, "Yes, he does have an account with the following financial institutions".
  Baroness Hollis of Heigham: It would depend on the situation. We expect that the DSS will make around 250,000 inquiries to banks and building societies in a year and that local authorities may make a further 125,000. We also expect that we will be making around 200,000 inquiries of credit references agencies and that local authorities will make around 100,000. I could go on to refer to other organisations. If, in the example I gave, the woman knew that the bank her former partner normally used was "X", it might well be appropriate for the DSS to go directly to that bank. Where we did not have that information, or where it seemed likely that there was more than one bank, CIFAS might be the appropriate place to go.
  Lord Higgins: I was asking a very simple question. Is the noble Baroness saying that if the department goes to CIFAS, CIFAS can tell it whether an individual has any account with a financial institution; or does the department need to go to every individual bank? Does CIFAS have a central data bank of every person who holds an account or is it necessary to go to all the individual institutions?
  Baroness Hollis of Heigham: Perhaps I may write to the noble Lord. I am receiving conflicting advice.
  Earl Russell: If the Committee could be detained for just a few moments, perhaps that might help the noble Baroness.
  Lord Higgins: On the other hand, it may delay the proceedings considerably. I am happy for the noble

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  Baroness to write to me as this is a not unimportant point. We simply do not know the facts. I am happy to await the letter. We can resume the matter on Report. Meanwhile, I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  [Amendment No. 3 not moved.]
  Lord Astor of Hever Lord Astor of Hever moved Amendment No. 4:
  Page 1, leave out lines 16 and 17.
  The noble Lord said: Amendment No. 4 relates to insurance companies. The amendment is very much in the spirit of the previous amendment moved by my noble friend Lord Higgins. It seeks clarification on the concerns expressed by insurance companies. While, like the banking industry, the insurance industry fully supports the purpose behind the Bill, it has some concerns that the DSS has not wholly appreciated the work required to meet requests for information. The regulatory impact assessment assumes that requests are dealt with by individuals. In fact they are almost always dealt with by multiple parties. Although there may be a single initial point of contact, requests will always need to be referred to the legal department to approve release of the information and to establish the validity of the inquirer and his or her authority to ask for the details. In addition, the information needs to be compiled and checked. The view of the insurance industry is that the time which would need to be spent is closer to 60 minutes for simple queries and 90 minutes for more complex ones. In view of that, the RIA seriously underestimates the potential costs.
  Since more than one member of staff, some highly qualified, may be involved, the average hourly cost could be over £75 per hour. It is inequitable that insurers should not be compensated for doing the same work as credit reference agencies and others who will be paid. I look forward to the Minister's clarification of the issue of compensation for the essential work that the insurance industry will be expected to undertake for the DSS.
  I understand that discussions have taken place between the Minister's department and the insurance industry on the subject of reciprocal co-operation by the DSS in providing information to insurers to help them to combat fraud. It would appear that the DSS is not willing to reciprocate. I should be grateful if the Minister could clarify that point. I beg to move.
  Baroness Hollis of Heigham: This amendment seeks to remove insurance companies from the list of organisations which would be required to provide information to help the DSS and local authorities to fight fraud and error. This, too, would be a weakening of the proposed new powers and would leave a serious gap in our new information-gathering resources.
  Insurance companies hold a great deal of information about individuals. If individuals are committing benefit fraud, we need to have access to that information. Such information may include, for example, vehicle insurance which might suggest that someone is using a vehicle on a commercial basis, perhaps as a taxi driver. We might also discover that
  836
  someone owned a high-performance car. How could that person afford to own and run such a vehicle while at the same time being in receipt of benefits? Fire and household insurances could suggest undisclosed assets and a lifestyle not commensurate with living on benefit. We might find employers' liability insurance, which would indicate that someone was running a business while in receipt of benefit.
  We might discover policies relating to health or unemployment contingencies. If someone was paying large premiums, we might suspect that they were in receipt of an extremely high income, especially if those payments were disproportionate to their benefit income. One example of where insurance payments should be taken into account is when calculating means-tested benefits. In such cases, we need to cross-check information with insurers where we believe that a person may be receiving undeclared insurance payments.
  In other cases, the benefit system and insurers are providing benefits or paying claims for the same contingency. For example, it is possible to insure against loss of earnings due to unemployment, ill health or disability; the benefit system also provides for these contingencies. Again, therefore, sometimes we need to double-check with insurers what we have been told. I hope that noble Lords will agree that this kind of information is entirely relevant to the kind of benefit claims the suitability of which we are seeking to establish. We would not ask about a customer's medical history unless it concerned a disability benefit, because it would not be relevant to the conditions of normal benefit entitlement.
  The noble Lord, Lord Astor, asked about costs. He stated that it was his belief that we may have underestimated the costs involved. As regards the published RIA increased costs, as a result of the responses we received to the consultation exercise, we have moved from our original estimate of £16 per hour and have increased it to £30 per hour. He also asked why insurance companies would not be paid. We are asking for companies to provide information which they already hold in the same way as banks and building societies. That point was made by my noble friend Lady Crawley. In our view, that is different from credit reference agencies, which make their living not from the sale of policies and so forth, but from providing information. That is the distinction that we are drawing here.
  We know that insurers would also like to obtain information from the DSS because we make payments in respect of the contingencies against which they insure. We discussed this in our consultation paper, but the responses to our consultation did not provide strong support for the proposition. For that reason, we have decided not to proceed with it.
  We believe that information provided by insurers is important and that we need to include it in the Bill. We are holding discussions with the financial industry more widely as regards giving government information—for example, confirmation that someone has died or details of a bogus national

  837
  insurance number—which may be helpful. However, we do not envisage a complete exchange of information. We would not support such a practice. Indeed, we feel that in some cases we might impinge on the terms of the Data Protection Act.
  Lord Astor of Hever: Am I right to assume that the door is not closed on this point?
  Baroness Hollis of Heigham: That is absolutely correct. The fact that we are continuing to hold discussions and that we will be producing a draft code of practice will allow such areas to be explored further. However, I would not wish to raise the noble Lord's hopes too high We certainly seek to be helpful here, but also we are mindful of our duty to protect information.
  For example, someone may have a child from another relationship who may not be known to the partner in their current relationship. If a full exchange of information were in place, the circumstances might then be made known to the insurance company and thus might be circulated back. We, too, have a duty to maintain confidentiality. As I have said, we wish to be helpful. It is not in our interest to see people defrauding the insurance system or the DSS.
  In the light of the explanations in relation to a whole array of benefits that I have sought to establish, I hope that the noble Lord will feel able to withdraw his amendment.
  Lord Astor of Hever: I am grateful to the noble Baroness for her response, in particular for addressing head on the two questions I put to her. I understand the need for the DSS to check with the insurance industry. Indeed, I made that clear in my opening remarks. The industry accepts this and will co-operate with the DSS.
  I was surprised at the figure of £30 per hour quoted by the noble Baroness, with which I believe the insurance would probably disagree. However, in the light of her comments, I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Lord Higgins Lord Higgins moved Amendment No. 5:
  Page 1, leave out lines 18 and 19.
  The noble Lord said: In moving Amendment No. 5, I believe that it would be appropriate to consider at the same time to Amendment No. 6. This amendment addresses the position of credit agencies and those concerned with fraud detection. We discussed this matter at Second Reading and had an interesting exchange during which I suggested that the fact that a credit agency had received an inquiry from a DSS inspector, presumably convinced that someone was engaged in fraud—they would not otherwise make the inquiry—might not do any good to the credit rating of the individual concerned if he were guilty or, more particularly, if he were innocent.
  In subsequent discussions, the noble Baroness was kind enough to say that it was her understanding that this would not arise because the fact that an inquiry had been made would not leave a footprint on the record of the credit rating agency. Quite by chance I came across an individual who, under the terms of the relevant legislation, had recently asked to see what a credit rating agency had been saying about him. He discovered not so much that the odd footprint remained of bodies which had made inquiries, but that the record had been positively trampled to death; in other words, a vast mass of footprints appeared on the information submitted to him by the credit rating agency. Presumably, among the various footprints would be the footprint of the Department for Social Security.
  I may have been misinformed on this matter, but I do not believe that to be the case. Perhaps the noble Baroness can confirm whether there is any risk that an individual could be penalised as a result of the department making an inquiry of a credit rating agency.
  Given that I am not familiar with this area—possibly that is the case also for other noble Lords—will the noble Baroness put in the Library a copy of a typical response which the department receives in answer to a query regarding a credit rating?
  Perhaps I may put one further question to the Minister. If someone has either a bad or a good credit rating, is that supposed to be in some way an indication of fraud? If they are in receipt of income support and they have a magnificent credit rating, at some point a slight suspicion might be aroused about it. However, I am not clear exactly how such inquiries are likely to produce information which the Government believe that inspectors would find helpful.
  Another point should be raised here, although perhaps it is not wholly relevant to the amendment. If an individual is entitled to see what a credit rating agency has said about their status, which I understand is the case, will the individual be entitled to see the more comprehensive data which may be obtained by a government department as a result of its inquiries? A further problem that we should consider—we discussed this earlier— that someone who has engaged in fraud may well provide incorrect information to the credit rating agency. Indeed, that is likely to be the case. Given that, the information then received by the Government would not be as accurate as one might hope. I should be grateful if the noble Baroness could clarify these points. I beg to move.
  Earl Russell: Amendment No. 6 directs our attention to the words in the Bill entitling the Government to get information from,
  "any body the principal activity of which is to facilitate the exchange of information for the purpose of preventing or detecting fraud".
  I have two queries about this, not altogether unrelated to each other. First, I am not entirely clear what it means. Secondly, I wonder whether its application is

  839
  rather too wide. If we know exactly what is intended, it might be rather easier to achieve drafting which clearly expresses the Government's meaning.
  6 p.m.
  Lord Grabiner: Perhaps I may deal with a point raised by the noble Lord, Lord Higgins. When conducting inquiries which led to the production of my report, I also considered footprints. This is a point we discussed briefly on Second Reading. In the course of preparing the report, I interviewed a senior official from Experian, which is a major provider of the information we are discussing. The point that concerned me—exactly the point mentioned by the noble Lord a moment ago—was whether a subsequent inquiry of, say, Experian would reveal the fact that the DSS had left its heavy footprint. That would obviously have a profound impact upon the decision of the subsequent potential credit provider as to whether or not he gives credit to the individual. It was explained to me—I am sure it can be independently verified, if necessary—that it need not leave a footprint.
  I agree that this is an important consideration. If the noble Lord were to view the information that is held by such companies—he should be under no misapprehension as to the quality and quantity of this information; it is fabulous—he would be horrified at how much information is available on a credit card when presented in a simple credit card transaction. For example, I recently presented a credit card to a garage proprietor. He was able to tell me my personal address from the information available on the face of his screen. That rather scared me. This kind of information is vast and is freely available outside. I say "freely"; you have to pay for it.
  But, to return to the point, the information held by companies of this kind is like, so to speak, the contents of a black box. The providers of the information have to satisfy the information commissioner that they are behaving in relation to the contents of that black box in a fashion which is entirely consistent with the requirements of the data protection legislation. The commissioner supervises in a very strict way the providers' behaviour and the way that they run their daily business.
  One of the things that I was told could be provided was a tailored-made package to meet your requirements. You decide what you want to purchase and you go along to the provider and buy a tailored-made package. Here we are talking about a fairly low level of information—for example, verifying the existence of a bank account, or the name or address of a person. It is possible to negotiate a package which will ensure that a subsequent intruder into the information available in the black box will not be told that on a previous occasion a footfall has been left by the DSS.
  This point needs to be absolutely confirmed, but my understanding from inquiries is that such a package is obtainable; that it is possible to preserve the integrity,
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  privacy and confidentiality of the individual by ensuring that that knowledge cannot be transmitted, so to speak, outside the black, box to a third party.
  Lord Higgins: Perhaps I may respond on the two points made by the noble Lord before the Minister replies. She can then cover them.
  As to the position of the credit card in a petrol station, the noble Baroness, in somewhat exotic terms, said at Second Reading that you would be appalled at the information which people can get if you put up on the screen what is available on the card. I did not mention this during our discussions on the last amendment—it did not seem relevant—but the banks have written back to me, in almost furious terms, pointing out that this is totally wrong. The noble Lord seems to be in the same position. If you put a credit card in at a petrol station, all that should come up is whether the payment is authorised or not. I have it in black and white from the British Banking Association that that is the position.
  Lord Grabiner: The BP garage proprietor—I suspect that he was not the proprietor but a mere employee—simply said to me, as I presented him the card and he put it through the machine, "Is your address…"—I do not need to repeat it for the benefit of Hansard—and he gave me my address; it was absolutely correct. That came up on the face of his screen.
  Lord Higgins: I am tempted to read out what else the banks said about the noble Baroness's Second Reading speech, but I shall refrain from doing so.
  We need to check up on the facts of the matter. There is clearly a considerable difference of opinion between the noble Baroness and the noble Lord on the one hand, and the British Banking Association on the other, as to what actually comes up on a screen in a petrol station when you present your credit card. Short of us all going off to the nearest petrol station and presenting a credit card, I am not sure how we can solve the issue immediately. No doubt we shall manage to do so.
  The trouble with this argument is that I have now forgotten the second point made by the noble Lord.
  Lord Grabiner: I cannot remember it either, so it does not really matter. But perhaps I may make this point. In a sense, it does not really matter if the address comes up. What has to be appreciated is that probably such transactions are carried out 200,000 or 300,000 times a day. The decision on whether or not to grant credit in respect of a particular transaction is the effect of a positive reaction from having put in the card. That is because a vast amount of information is immediately, in effect, interrogated and a positive or negative response is given. The essential point is that the information is already there, albeit in the private sector, which many of the provisions and amendments

  841
  we are discussing illustrate. The legislation is designed to allow access to information which is already in the private sector and available at a price.
  Lord Higgins: The second point made by the noble Lord was in regard to footprints. Again there seems to be a considerable difference of opinion. I am not clear whether the Government are arguing that there will be no footprints because the footprints are normally not recorded, or whether they are saying that if the DSS makes an inquiry it will ask for the footprint not to be there.
  My understanding is that if you ask to see your credit rating, one of the pieces of information you get back is a list of all the people who have inquired as to what is your credit rating.
  Baroness Hollis of Heigham: Perhaps I may address that point in a moment. These amendments seek to remove credit reference agencies from the list of organisations who would be required to provide information. As I said on the two previous groups of amendments, this would be a seriously damaging step as we envisage the agencies being our first port of call in many inquiries. If someone has a credit card, then going through the credit reference agency leads us to his bank. If he does not have that, we may need to go to the bank directly.
  The amendments also seek to remove,
  "any body the principal activity of which is to facilitate the exchange of information for the purposes of preventing or detecting fraud",
  from the list of organisations which would be required to provide information.
  Perhaps I may deal first with the issue of credit agencies. The noble Lord, Lord Higgins, made two substantive points: first, that a person's credit rating could be harmed by the fact that the DSS had made inquiries about that person—in other words, an assumption about how credit ratings operate; and, secondly, that the DSS in particular would be leaving a footfall and that the situation should be clarified.
  As I understand it, credit reference agencies do not award credit ratings; it is the financial institutions using their services who do that. I have assured the House that we will ensure that these organisations—the banks and so on—which use the credit reference agencies cannot identify whether or not the DSS made an inquiry when the department itself, in turn, accessed credit agency data. There is, therefore, no question of a person's credit rating being affected by our using these powers.
  There may be some supplementary concerns about whether the information held is incorrect— refer back to our previous discussions—but, again, no one piece of information convicts a person of fraud. Any incorrect information would soon be uncovered—it would be inconsistent—and it would be treated sensitively and securely destroyed.
  Again there is a concern about people knowing the information. We debated this point in relation to the previous amendment. Only an authorised officer may
  842
  obtain on-line information that relates to an identified person where there are reasonable grounds to do so. Any inquiry that would not be allowed in writing under Section 109B will not be allowed under these provisions. Such inquiries will have to be made in accordance with a code of practice that we shall subsequently discuss. Authorised officers will be required to document their grounds for inquiries. That documentation would, in turn, be subject to routine checking by managers.
  Concerns have been expressed about the amount of reliable data that agencies may hold. It has been suggested that it could lead us, via the card issuer, to a concealed bank account and so on. We need the help of the agencies to defeat the £2 million or so annual loss to public funds. Credit reference agencies are a useful gateway to information about a claimant's financial circumstances in order to determine the amount of fraud.
  As regards the question about leaving a "footprint", banks that go to a credit reference agency leave a footprint behind, so any other bank or organisation would know that Barclays, Lloyds or whichever organisation has interrogated the credit reference agency. We have established with the agencies that their system will not divulge our inquiries to any subsequent inquirer. We shall place an example of a typical credit reference agency in the Library, so that the noble Lord may satisfy himself on the details. Equifax and Experian are the two major ones. I have had a quick look at some of the information provided by one of those. It makes it clear that the credit agencies themselves do not determine credit standing. It is the organisations that do that, on the basis of the information provided by the credit reference agency.
  In regard to Amendment No. 6, perhaps I may confirm that we are talking about CIFAS. No other bodies are known at present. However, for procedural reasons it could not be named on the face of the Bill; otherwise, a question of hybridity would arise. That is why the reference in the Bill is worded in this way.
  I hope that I have addressed the two main concerns of the noble Lord: whether this provision will affect someone's credit standing and whether, in asking for the information, the department will leave a footprint. The answer is no on both counts. As a result, I hope the noble Lord will feel able to withdraw his amendment.
  Lord Higgins: As always, the noble Baroness is very helpful. We look forward to reading the example—no doubt anonymous—which will be placed in the Library to enable us to see what information is received from the credit agencies. Clearly, this is an important point.
  It would seem that the Government have done a specific deal with the agencies—the Minister nods and the noble Lord, Lord Grabiner, who is expert in these matters, shakes his head—to the effect that the department's footprints will be "erased from the snow". So the problem that I raised at Second Reading does not arise. The Minister nods to indicate that that is the case.

  843
  In exchange for part of this information the department will no doubt make a payment to these organisations. We shall come to the question of payment in relation to subsequent amendments. As I understand it, the Government are making the credit rating agencies and those concerned with fraud a special case: they are to be paid, whereas the Government are treating other organisations which will equally incur costs in the same way as they are treated in other pieces of legislation. It unusual to pay a particular organisation for its services in this way and not to pay others which incur equal cost.
  Baroness Hollis of Heigham: I addressed this matter earlier. The point is that banks and insurance companies hold this information anyway for their own use, and we are seeking access to it, whereas the credit reference agencies' reason for existing is the provision of such information. Therefore, such payment does not seem unreasonable. Had we not been willing to pay them, I am sure the noble Lord would have been equally forthright in his criticism.
  Lord Higgins: Either you pay them all, or you do not pay them all.
  Baroness Hollis of Heigham: They are not the same. Surely the noble Lord can make a distinction between an insurance company or bank and a credit reference agency.
  Lord Higgins: Yes, I do not dispute that there is a distinction. I merely wonder whether this approach is justified. Credit rating agencies have all the information readily to hand, in the same way as a bank does.
  Baroness Hollis of Heigham: But they provide that information—unlike banks, which hold it as ancillary to other priority purposes.
  Lord Higgins: I understand that very well. We look forward to seeing what the noble Baroness's example reveals, and on the point that was raised earlier. Subject to that, I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  [Amendment No. 6 not moved.]
  6.15 p.m.
  Lord Higgins Lord Higgins moved Amendment No. 7:
  Clause 1, page 2, leave out lines 1 to 3.
  The noble Lord said: In line with other amendments, this seeks to probe the position with particular regard to,
  "any person carrying on a business the whole or a significant part of which consists in the provision to members of the public of a service for transferring money from place to place".
  I am not quite clear what kind of organisation the Government have in mind. Since subsequent clauses make provision for international exchanges of information, is the provision particularly concerned
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  with organisations of that kind? I simply do not recognise the description. Perhaps the noble Baroness can help us.
  Baroness Hollis of Heigham: I shall try. The effect of the amendment would be to remove money transfer companies from the list of organisations required to provide information about individuals.
  Most people use banks to transfer money and we should be able to obtain information from them. But there are other companies which transmit money and which would not be so covered, such as Western Union. This is a money transmission company that enables a person to send money to someone within the UK or abroad for a service charge. Senders can transfer the money by handing in cash, by credit card or by telephoning the companies. The recipients can collect the funds from the companies' agents by proving their identity.
  Given that the noble Lord simply asked about the context of this provision, I hope I have answered his question. We obviously need such information to identify people who are colluding in organised international fraud and to track the movements of stolen benefit in order to recover that money when benefit cheats are prosecuted.
  For example, in one operation, people who were involved in making multiple fraudulent benefit claims—including a member of the DSS staff—were observed using money transmission companies to send money abroad. That is why we need to bring them in under this remit. If the amendment were accepted, we should be unable to obtain such information; what is more, if it were an exempt territory, one could see a growth in the use of such services to send money to banks abroad so as to evade detection. I hope that I have answered the noble Lord's question and that he will be able to withdraw his amendment.
  Lord Higgins: I am grateful to the Minister for that response. This seems to be a strong case. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Lord Astor of Hever Lord Astor of Hever moved Amendment No. 8:
  Clause 1, page 2, leave out lines 4 to 8.
  The noble Lord said: In moving this amendment, I shall, with the leave of the Committee, speak also to Amendments Nos. 9 and 10.
  The water, gas and electricity industries also recognise the significance of social security fraud and the potential role to be played by private sector companies, including utility suppliers in efforts to tackle this form of crime. However, they have concerns about some aspects of the Bill—specifically, potential costs, data protection aspects and the impact on customer relations.
  Utility companies, and especially electricity companies, as almost every household has an electricity meter, will be affected by the large costs associated with the Bill. Although the Bill allows the Secretary of State to make payments to utility

  845
  companies for the bulk of information they will be asked to provide, the Secretary of State may make payments only where he considers this reasonable; but he need not do so if he does not think it appropriate. This is very unsatisfactory and unclear. It places these private companies in an uncertain position over the recovery of the costs.
  The companies are also concerned about the way in which this will affect relations with their customers. Electricity companies are working extremely hard to introduce initiatives designed to combat fuel poverty. In so doing, they often deal with sensitive customer groups. The industry believes that the requirement for such companies to hand over information to the Government about those customers places a strain on electricity suppliers, who are trying to do their very best for vulnerable customer groups.
  On data protection, the industry feels that the Government may be seeking on-line access to information held by the electricity suppliers. Can the noble Baroness tell the Committee whether the Government believe that this will raise specific data protection problems for the electricity industry? I look forward to hearing the Minister's response to those two points. I beg to move.
  Baroness Hollis of Heigham: My Lords perhaps I may respond first to the noble Lord's second point relating to data protection. I have received an assurance to the effect that the answer to that question is no. No data protection issues are raised for the electricity companies. However, given that this is the Committee stage, it may be worth outlining why we need this information. These amendments seek to remove the power to obtain information from water companies and gas and electricity suppliers. Fraud is committed by people lying about where they live—for example, claiming housing benefit for a property that is actually empty. Members of the Committee will know from ample discussion in this Chamber about housing benefit fraud how often systematic frauds arise as regards properties where people are not living. Fraud is also committed by people lying about their identity.
  Utilities, including water companies, can provide information on levels of consumption. No consumption may mean no resident at a property; for example, if we suspect that a gang of organised criminals are using a number of empty addresses to claim benefit from, information from the utility companies could tell us if it was likely that anyone was living there. Such companies can also provide information on who they think lives in a property which we can cross check with our own records. Therefore, they can help us combat those types of fraud.
  Water companies also have information on how bills are paid. For example, if we were to ask about the bank account used to make payments by direct debit, this may lead us to identify undeclared income in those accounts. The type of information that we would require from gas and electric companies would be
  846
  much the same, and would help us to detect the same types of offence—that is, people not living at the address from which they are claiming benefit; people lying about their identity; people not declaring savings or capital. In the case of gas, we do not see gas suppliers as a major source of information in this respect. However, they may still hold information about bank accounts that would be extremely useful.
  Therefore, we can obtain information about residency fraud. We may also get information about what other forms of income people may have. If a utility company tells us that our customer is not the registered user at an address, that might suggest either that he or she is not living at that specific address or that he or she is living with an undeclared partner who is working and paying the domestic bills. Indeed, I could go further.
  The noble Lord, Lord, Astor, also said that he thought this provision was unfair because of the bulk issue as regards the utilities. Given the likely cost of extracting the data, it is difficult to see why it is appropriate to make payment. This is just a large amount of bulk information.
  With that explanation—namely, that giving the information is not contrary to the Data Protection Act and the fact that we do not believe it is appropriate to make such payments, and bearing in mind that it is information particularly about residency to which these companies have unique access—I hope the noble Lord will feel able to withdraw the amendment.
  Lord Astor of Hever: I am grateful to the noble Baroness for her response. I quite accept, as does the industry, the need for the DSS to have such information. I was disappointed with the Minister's response on the recovery of costs, but I am grateful that there will not be any specific data protection problems for the electricity industry. In the light of that, I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  [Amendments Nos. 9 and 10 not moved.]
  Lord Astor of Hever Lord Astor of Hever moved Amendment No. 11:
  Clause I. page 2, leave out lines 13 to 15.
  The noble Lord said: Should the Bill receive Royal Assent in its current form, there is concern in the telecommunications industry at the imposition of what it believes to be an unreasonable burden on companies. Although I understand that the Government would be prepared to meet some of the costs to the telecommunications companies when using services, such as directory enquiries, for which companies already charge, these payments would not be sufficient to cover the majority of the costs that would fall on them.
  As the companies expect to have to deal with up to 90,000 enquiries per year over the whole sector, they believe that this Bill will have serious resource implications for them. They feel that those implications go beyond any reasonable expenses that they should be obliged to bear as good corporate citizens.
  In today's House of Lords Official Report, in a Written Answer to my noble friend Lord Northesk, the Government recognise that Internet service providers (ISPs) and communications service providers (CSPs) do bear substantial costs for providing data to law enforcement agencies and should, therefore, be entitled to enter into cost recovery agreements. The noble Lord, Lord Bassam, has accepted that a requirement to provide communications data places operational and financial burdens on the CSP. In the light of that response, can the noble Baroness clarify the Government's position on compensating the communications sector for the data that it provides?
  In particular, I should be grateful if the Minister could clarify why the telecommunications services should be treated differently from the ISPs, if in fact telecommunications services do fall into this category of CSPs mentioned by the noble Lord, Lord Bassam. If they do, it seems extraordinary to allow them to recover their costs under the Regulation of Investigatory Powers Act 2000, only to prevent them from doing so under this Bill, the aim of which is also to facilitate improved law enforcement.
  We hope that the Government will eventually agree with themselves that these companies should be entitled to some sort of reimbursement for the prospective costs that they will shoulder as a result of this Bill. It is important that we do not take for granted those British businesses that have legitimate concerns about how such costs will affect their businesses when drafting legislation which will have to rely heavily on their co-operation for its effectiveness. I beg to move.
  Baroness Hollis of Heigham: The amendment now before the Committee would have the effect of removing providers of telecommunications services from the list of organisations required to provide information to help combat fraud. I am delighted to, as it were, read into the record that BT said in the consultation exercise that it would wish,
  "to co-operate with legitimate and justified requests from the DSS to supply information".
  I believe that to be a most helpful and positive response.
  Perhaps I may begin by outlining why we need this information. I shall then return to the point raised here, and also to the question of utilities in terms of costs. I realise that that point is of obvious concern to the noble Lord.
  Why do we need this information? A telecommunications provider would be able to provide a range of information on an individual. For example, it might have information on the level of usage and on the means by which bills are paid. If the usage was exceptionally high, that might suggest that someone could be operating a business from his or her address. Billing information might also show that someone other than the householder was responsible for the account, which might, in turn, suggest that there was an undeclared person in the household.
  848
  All that information might help to establish the true circumstances of a benefit claim and thus ensure that the correct amount of benefit was in payment. However, we would not ask for information that does not help us to do this—for example, information about the content of telephone calls, or of electronic mail. We are not seeking information about what we call "traffic data".
  In his report entitled The Informal Economy, the noble Lord, Lord Grabiner, mentioned the value of being able to "reverse search" the telephone directory. On Second Reading, I mentioned the scenario of the window cleaner advertising his services in the newsagent's window and giving only a telephone number. A further benefit of billing information in organised fraud cases would be that we might be able to put together a picture of his activity and, if necessary, that of any others with whom he is working on that basis. Therefore, I hope the noble Lord will agree that the information that telecommunications suppliers hold is vital to our fight against fraud.
  The noble Lord, perfectly properly, pressed me on the question of costs. If I mislead him, I shall obviously elucidate my response by way of correspondence. My understanding is that we are not proposing to pay telecommunications companies for every piece of information that they may give us. We propose to pay them only for certain types of information that they already provide for payment; for example, directory enquiries. However, if we ask them for details of what address they hold on their records for a customer, or billing information, we shall not pay for that service. So there is some payment but not for the full range of information that they hold. Similarly, in the case of the utilities, we do not expect to pay them for information about individuals. We will obviously reimburse them for bulk information and such reasonable costs as the Secretary of State may determine.
  6.30 p.m.
  Lord Astor of Hever: I am grateful for that response. Of course I understand all the reasons for requiring the information. The Minister did not respond to my question why telecommunications services should be treated differently from Internet service providers. Perhaps she will reply to me in a letter as the industry takes that point very seriously.
  Baroness Hollis of Heigham: We have no plans at present to obtain information from Internet service providers. However, as this is a complex issue, I shall write to the noble Lord.
  Lord Astor of Hever: With the greatest respect, that was not my question. I asked why the telecommunications services should be treated differently from Internet service providers in relation to cost.
  Baroness Hollis of Heigham: As the noble Lord rightly identified, this is a complicated issue because BT is also an Internet service provider. These are not

  849
  separate categories; there is considerable overlap. It may be useful to set that out in a letter to the noble Lord, which I shall also place in the Library.
  Lord Astor of Hever: I am grateful for that response, as I am sure will be BT. I have had a series of telephone conversations with BT today on this matter. It is an area that concerns them. In the light of that response, I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Lord Astor of Hever Lord Astor of Hever moved Amendment No. 12:
  Page 2, leave out lines 16 and 17.
  The noble Lord said: I rise to move Amendment No. 12 and, with the leave of the Committee, to speak to Amendments Nos. 13 and 14. I suppose I should declare an interest as the father of two daughters who are studying, or are meant to be studying, at two separate universities. I understand that they are occasionally there!
  We believe that the inclusion of educational establishments in the list of persons who will be bound by law under the Bill to deliver personal information about individuals to the DSS is unnecessary and potentially too intrusive. It will also place an additional workload, and time constraint, on the already pressurised teaching profession and redirect vital educational funds into resources required to meet the demands of inquiries.
  It would seem that much of Clause 1 has been designed to allow officials to check whether an individual's expenditure is as they claim when they apply for benefits, or whether, in fact, they are making a fraudulent claim. School and university records, however, have no record of students' income or expenditure and therefore should be exempt from the Bill.
  We cannot see how it can be necessary to put an extra burden of responsibility on educational institutions, particularly teachers, to provide the Government with private records on demand, and then refrain from advising that individual that they were under suspicion. Given all the other financial information that will be made available to officials under the Bill, it seems highly intrusive and inappropriate for this particular source of very personal information to be at the Government's fingertips. I beg to move.
  Earl Russell: I rise—
  Baroness Hollis of Heigham: I hope I may reply before the noble Earl speaks as I may obviate his concerns. There may be a profound misunderstanding here of what we are seeking to do. All we are seeking to establish is whether someone in higher education is a student. If they are a student, they are not eligible to claim benefit. We are not interested in, nor would we be able to seek, nor shall we seek, information about exam grades or tutors' comments, however much the noble Lord, Lord Astor of Hever, as a father might like
  850
  to know that, and however much I as a former university teacher might feel that it ought to be shared with the parents of students in some cases. All we seek to do with this information is essentially to establish whether someone has the status of a student. The persons who will tell us that are not the universities as such but, primarily, UCAS. That is the reason we seek that information. I could give a much longer reply but that may obviate the need to explore the issue further. If it does not, I shall, of course, seek to help the Committee further.
  Earl Russell: I intervene precisely to the point that the Minister has been concerned about; namely, the question whether people are actually students. The Minister who is learned in both languages I think understands something of the difficulties of communication between universities and government agencies, especially the DSS.
  I remember on one occasion being called in for help by my departmental secretary to answer a detailed request for information. I forget where it came from; I think it may well have been the CSA. She said, "These questions do not mean anything in our terms. What shall I do with them?". We went over them for about half an hour and I finally said to her, "All you can do is set out the facts of this person's situation and you have to ask them to decide what answer to the question that adds up to". We could not make head or tail of it.
  I shall not go into the matter in detail because the noble Baroness, Lady Amos, will remember the debate on the student social security regulations, and most of the points had been made by the Social Security Advisory Committee far better than I could ever make them. The basic difficulty, especially in the humanities, is that the DSS assumes that being a student means being in full-time attendance sitting in classes. In my field a great deal of it—it ought to be up to three-quarters—means sitting at home seriously reading books. Until that is understood, we cannot give meaningful answers to the questions the DSS sends us. Academics can always think of six or seven meanings to a question. So we shall be sending back a great many detailed, lengthy and learned replies which will take up people's time and not give information which we would have been happy to give if it had been asked in a form in which we could answer it.
  There is a further problem of intermission and that is so well dealt with by the Social Security Advisory Committee that I do not need to go into it any further. Because the Minister is learned in both languages, perhaps she is the ideal person to provide a solution to a question which in the past has seemed insoluble. If she is able to do anything about this, the university world as a whole would be profoundly grateful.
  Baroness Hollis of Heigham: I rather suspect the noble Earl, Lord Russell, seeks to tempt me down the road of social security support for students. I accept that there can be a problem of definition as to what counts as a full-time student and a part-time student given the 16 hours rule and so on. I recognise that where much study may be done at home there can be

  851
  difficulties of definition. I am happy to refer those queries to my noble friend Lady Blackstone who is the Minister responsible for education. However, I hope that the noble Earl will allow me tonight not to engage in a debate about social security support for students.
  What we seek here is simply the power to apply to the Student Loans Company or UCAS, or other relevant bodies, to find out whether someone who is claiming benefit also has the status of a student, or has been drawing student loan income or other incomes in such a way that impinges on his or her benefit claims. I think the Committee will understand the need for that information. We do not seek anything else that is private or confidential. If the noble Earl, Lord Russell, will permit me, I would prefer not to be tempted down the path of a general debate on student support and social security tonight.
  Earl Russell: I thank the Minister warmly. She said everything that I hoped to hear. I assure her that I was not tempting her down the path of that general debate. That debate remains to be had but this is neither the time nor the place for it. I thank the Minister warmly.
  Lord Astor of Hever: I am grateful to the Minister for her clarification of the point. I am also grateful to the noble Earl, Lord Russell, for the definition of a student. My two daughters are supposedly students although they are not always sitting in a class full-time or, indeed, working at home. In the light of what the Minister said, I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  [Amendments Nos. 13 and 14 not moved.]
  Lord Higgins Lord Higgins moved Amendment No. 15:
  Page 2, leave out lines 22 and 23.
  The noble Lord said: Amendment No. 15 appears towards the end of the series of amendments which are concerned with individual organisations. Amendment No. 15 is somewhat different in as much as it relates to the part of the Bill which is concerned with getting information from agents or servants of the aforementioned list of persons or organisations.
  Our concern is the level at which the information is likely to be obtained. One presumes that the information is being obtained by the inspector from the organisation itself—the electricity or gas industry, or banks—rather than by the servant. That suggests that the obligation on an employee to provide the information to the person in government is different from that of the organisation by which he is employed: that he has some personal responsibility to produce the information. He may run into trouble with the business employing him if it does not want the information disclosed. The Government could have gone to the business rather than to the employee.
  I understand that a problem arose with regard to the Electronic Communications Act. It was seen to place an unfair burden on employees to disclose information which they might not have. I understand that the first version of that Bill went back to the draftsman because one of the major objections was that the onus was
  852
  placed on employees to disclose information to which at junior level they had only partial access. It will be helpful to ensure that we do not run into the same problem. Having recognised that problem, the Government then took a different line.
  The problem arises as to whether the agent of a commercial organisation is bound by some contractual or other relationship to the person employing him as an agent not to pass on information when the information can be obtained from the principal. What information is likely to be obtained from the agent which cannot be obtained from the principal? Alternatively, is it in some sense a whistle-blowing operation—the agent knows that the principal is fraudulent and the Government wish to ask whether it is true that his principal is engaged in fraud? It is not entirely clear from the somewhat simple wording of the Bill. In the light of experience of the previous legislation, perhaps the Minister will clarify the position.
  6.45 p.m.
  Earl Russell: I ask for a clearer definition of what is implied by the words in the Bill. Is there any restriction in the way "agent" is defined which makes it clear who will be covered by the clause? I remember debates on IR35 during the Welfare Reform and Pensions Bill. There seemed a confusion of relationships between people who were or were not agents or employees. Will exactly who is covered by the clause he clear?
  My other concern relates to diffusion. In our meeting, the Minister gave me reassurances on diffusion which were extremely welcome. I think that it is agreed that as information spreads among more people, the risk of wider disclosure increases in geometrical progression in line with the number of people who have the information. If more and more agents—related people, people in connected jobs, people who have done a single job on contract for a government—become involved and provide information, a series of "onion layers" may arise. If not, there may be difficulty in getting the requisite information.
  It is a difficult problem to get round, but I should like to know exactly what the Bill means.
  Baroness Hollis of Heigham: The issue is important for the security of a number of people. Therefore, I shall give a careful answer.
  This amendment seeks to prevent authorised officers obtaining information from the servants and agents of the persons and bodies that can be required to provide information about identified individuals under the clause.
  Perhaps I may set out who servants and agents are. Servants and agents can be the subcontractors of organisations. If a subcontractor held the information we needed, it would make sense to go to him as the servant or agent of the primary body rather than to the primary body itself. Servants are also the employees of a company. Putting it crudely, servants can be agents but also employees whereas an agent is a person

  853
  authorised to act on behalf of another. According to Black's legal dictionary—I defer to my noble friend Lord Grabiner—a "servant" is a person employed by another to do work under the control and directions of the employer. In the same legal dictionary, an "agent" is defined as one who is authorised to act for or in place of another; a representative. That tends to be the distinction.
  We need this provision to ensure that there is someone in the company to whom we can direct inquiries and make responsible for providing the information needed to identify benefit fraud. Generally, as the noble Lord, Lord Higgins, suggested, we would approach a company for information, and many organisations would want to nominate a central point for such inquiries either within the corporate body or within an organisation that works for them. Where this was the case, we would not direct our inquiries to anyone else. We would make this clear in the code of practice that would be published before implementing these provisions.
  However, some organisations will not want to nominate a central point. If we were then unable to identify a way to direct our inquiries to the corporate body, we might need to direct our inquiries to an employee of the organisation who would be able to answer the inquiry.
  The noble Lord, Lord Higgins, queried whether it could, therefore, be our intention to prosecute individual employees who do not provide information when required. In other words, how exposed are they? In the vast majority of cases, our inquiries will be made to the corporate body and it would be the corporate body which would be held to account for any failure to comply with the legislation.
  There are only two situations in which we would prosecute an individual for failing to provide information under these provisions: where they themselves were the corporate body, or, very exceptionally, if an individual failed to provide information and would not seek a corporate backing to do so, perhaps because they had a personal interest in the case. In these circumstances, it would be right to hold the individual to account and not the corporate body.
  I must stress that we do not expect to need to exercise the powers in this way. We are interested in obtaining information to fight fraud, and not in prosecuting those who work in the private and education sectors. But we need this provision to ensure that the powers work and to ensure that people take responsibility for failing to meet any legal obligations they impose. This will usually ensure that any decisions about compliance are taken corporately.
  If anyone is worried about their employees being prosecuted for not providing information, the answer is that employees will not be prosecuted if they had the employer's corporate backing when they took the decision to refuse to provide information. I hope that that addresses the noble Lord's concerns. If it does not, it might be sensible to follow this with an exchange of
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  correspondence. It is technical, but it is important to get the matter right and for the situation, including the point about whistle-blowers, to be clarified.
  Given the information and the promise to follow up the matter by correspondence if the noble Lord wishes, I hope that he will feel able to withdraw the amendment.
  Lord Higgins: I find that a somewhat worrying answer. I did not fully understand the implications. Perhaps one should look back on the arguments deployed in the earlier debates on the e-commerce Bill. Not being a lawyer, I am not clear whether a subcontractor is an agent.
  Lord Grabiner: This point is something of a chestnut. It presents itself frequently to courts and tribunals. The whole of our employment legislation rests upon the answer to the question, "Is X an employee?" If X turns out to be an employee, applying the control tests—the point made by the Minister—that person will come within the legislation. The alternative conclusion is that the person will be an independent contractor or sub-contractor.
  The essential distinction is that an employee works for somebody, under their control, whereas an independent contractor or agent sells their services for a fee. On the example given by the noble Lord, Lord Higgins, I suspect that a subcontractor would be an independent contractor or agent.
  The distinction requires a factual inquiry. The company secretary is almost bound to be an employee of the company and would count as a servant. A subcontractor would sell his services to the company. For example, a contractor who sold employees—in the sense that he was their employer and he provided their services to the company—would be an independent contractor to the company supplying labour only. He would therefore count as an agent rather than a servant.
  Lord Higgins: I am sure that the House is most grateful to the noble Lord for that helpful clarification. I wonder whether there is a lacuna in the Bill, because a subcontractor who may have information relevant to an inquiry may not be covered. Perhaps we ought to consider that point, but let us not pursue it now.
  It would be helpful to have some elucidation of the position from the Minister. The noble Lord said that some of those points are legal chestnuts. They are not chestnuts that I had previously cooked or consumed, so I am in a bad position on the issue. If the Government approach an individual in a decentralised part of an organisation, they will still be asking for the information from the organisation. The fact that the individual is not on site does not seem necessary. Using the word "servant" opens up the possibility of a particular individual being clobbered by an over-enthusiastic inspector. In its representations, the Bradford and Bingley Building Society quoted the example of an inspector who had demanded information from an individual who was not entitled to give it.

  855
  We look forward to receiving the letter that the Minister is going to send us. Let us take it from there.
  Baroness Hollis of Heigham: I am happy to clarify the issue through correspondence. To reassure the noble Lord, our solicitors cannot remember a single case in which they have prosecuted an individual under the current powers for refusing to provide information. We are talking about a very rare occurrence, although that does not mean that it should not be clarified.
  Baroness Noakes: Why is it necessary to have a power to ask for information from a servant or an agent? The information required is held by the company or other organisation. The request should always be made to the company. The fact that it may be difficult to find the right name to put on the letter is not relevant. The identity of the company or organisation from which the information is required will be known. By inserting this power in the Bill, the Government are suggesting that they might try to get information that is not held corporately. That means that any employee of one of the organisations listed could be asked for information held by them, not in a corporate sense, but in a personal sense. That is a dangerous extension of the Government's ability to get information, when the ability to approach the organisations does not need them to go beyond establishing the right to get the information.
  Baroness Hollis of Heigham: I entirely take that point. We shall try to ensure that those issues are covered in the code of practice. We always expect to address our inquiries to the company. Only when we cannot get the information—because the company is decentralised or there are agent arrangements—would we expect to go down to the servant or the agent. The provision is a fallback for cases when the company to which we make the initial inquiry is, perfectly properly, unable to respond to our request for information. Provided that that person has the backing of their company for their action—whether or not they reveal the information—that employee will be protected.
  If there are questions beyond that, I shall be happy to seek to answer them in correspondence.
  Lord Higgins: We are clear that we need to be a little careful. The Minister has said that the department does not recall any employee being prosecuted for not providing information. On the other hand, it is possible that, for one reason or another, possibly maliciously, employees have provided information that they ought not to have provided. We look forward to receiving the Minister's letter, which will spell that out. Some care in drafting is needed. We may need to consider whether the position of sub-contractors is fully covered by the Bill and whether the word "servant" ought to be in the Bill. Subject to that, I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Lord Higgins Lord Higgins moved Amendment No. 16:
  Page 2, line 23, at end insert—
  ("(o) any government department or agency").
  The noble Lord said: This is different from the previous amendments, which all had a certain similarity about them. This one would add to the list of organisations that may provide information on fraud to the Department of Social Security.
  As a result of tabling the amendment, I have incurred the wrath of Liberty on the ground that it goes much too far, so I propose it with some schizophrenia. It may well go too far in the sense that 20 or 30 years ago there were genuine Chinese walls between one department and another. In particular, the Treasury, the Inland Revenue and Customs and Excise were highly determined that the information that they held on individuals should be treated as confidential and should not be translated to other departments. Alas, those Chinese walls have become less and less effective, particularly since the Treasury has taken over large chunks of the Department of Social Security.
  The other side of the amendment—I now put on my other hat, if that is not mixing my metaphors too much—is to ensure that there is, in the ghastly jargon, joined-up government. There needs to be an adequate exchange of information between the DSS and other departments that may have information that is relevant to the detection of fraud. We have to consider that, not least in the context of the exchange of information between computers, given the Department of Social Security's unfortunate record on computers.
  Perhaps the Minister could give us an idea of the extent to which the Government intend to exchange information between one department and another in the course of pursuing social security fraud and how much of that is likely to be done electronically. She referred earlier to the question of whether someone had a large car. Will the department ask the DVLA for information about car registrations? If so, will that information be linked in a computerised or electronic form? Similarly, for example, although perhaps unlikely in the context of social security fraud, land registry records may reveal property purchases.
  Other than in areas where an exchange of information is not appropriate, it would be helpful to be reasonably clear that the Government believe that information transfers between government departments will enable them to pursue the objectives of the Bill.
  7 p.m.
  Lord Grabiner: By way of information and in response to the points just raised by the noble Lord, Lord Higgins, perhaps I may say that I dealt with this point very fully in my report. I do not believe that any subsequent relevant statutory amendments have been made. The noble Lord may find it helpful to look at paragraph 5.13 of the report, down to and including paragraph 5.18, which covers less than a page and a half.

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  That section of the report includes a table showing the current state of the transfer of information in relation to the matters with which we are now concerned between the relevant government departments. Those departments are confined to Customs & Excise, the Inland Revenue and the DSS. Perhaps I may say that the noble Lord will find a full summary of the current position in a form which is rather more clear and less complex than the legislation which produces that result.
  My only additional point is that I reached the conclusion that the table reveals that there are no obvious gaps in the current legislation. That is why I did not make a specific recommendation and why, I suspect, the Bill does not contain, for example, the provision which is the subject of the amendment which we are now discussing. I hope that those paragraphs and, in particular, the table will clarify matters.
  Earl Russell: I must confess that I share Liberty's misgivings that the amendment is perhaps a little wide in its drafting. I wonder whether it covers, for example, the Probation Service. I can think of circumstances in which I would not want that service to have to disclose such information. I look forward to the Minister's reply.
  Baroness Hollis of Heigham: The amendment seeks to add other government departments and agencies to the list of bodies from which authorised officers could require information. I entirely endorse what my noble friend Lord Grabiner said. The DSS already has powers to obtain information from relevant government departments and agencies in order to address social security fraud and error. Those provisions were introduced by the previous administration under the Social Security Administration (Fraud) Act 1997.
  Therefore, we work with other departments, including the DVLA, to obtain information in relation to, for example, people starting work, claiming tax credits and entering prison. Information is generally obtained in bulk and data-matched with social security records in order to identify inconsistencies which are to be pursued. In the first three-quarters of this year, those data matches identified nearly 135,000 cases for investigation and almost £24 million of overpaid benefit. The department has the same relationship with local authorities.
  Therefore, we do not need the power which the amendment seeks to introduce. Indeed, if the power were granted, it could allow not only the DSS but local authorities to acquire information from the security services, the Foreign Office, the MoD, the Home Office and the Department of Health, all of which have highly sensitive files. Therefore, I do not believe that it would be wise to follow that path. As my noble friend rightly said in his report, we do not need the power. We require information from the private sector, and that is what the Bill seeks to obtain.
  Lord Higgins: Liberty will be happier with the response of the noble Baroness to this amendment
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  than it will with her response to the previous one. Once again, we are grateful to the noble Lord, Lord Grabiner, whose excellent report, as he rightly points out, deals with this problem. I was not quite clear to what extent there was compatibility with regard to computers. I believe that the noble Lord, Lord Grabiner, said that his diagram covered the Treasury and the Inland Revenue—that is, the two revenue departments. However, I was not clear from the Minister's reply whether it covered the DVLA.
  Baroness Hollis of Heigham: I said that the DVLA was included.
  Lord Higgins: However, I gather that it does not cover a number of other areas which the noble Baroness specified. In addition, I am not entirely clear whether the exchange of information on the scale which she mentioned takes place on an electronic basis or whether—
  Baroness Hollis of Heigham: It is on a data-matching basis.
  Lord Higgins: I understand; it is data matching on an electronic basis. Given the schizophrenic approach which I have taken to this amendment, I rapidly beg leave to withdraw it.
  Amendment, by leave, withdrawn.
  Lord Higgins Lord Higgins moved Amendment No. 17:
  Clause 1, page 2, line 23, at end insert—
  ("(2AA) Any authorised officer wishing to obtain information under this section shall make an application to the person holding it through that section of the Department of Social Security responsible for the investigation of fraud.").
  The noble Lord said: We have also tabled Amendment No. 18, which is the mirror image of Amendment No. 17. I am not sure whether one should call this amendment the "single exit provision" and the other amendment the "single entry provision", or whether it should be the other way round. However, essentially we are saying—I consider it to be important—that inquiries by the department should be made centrally rather than that the department should have a whole range of investigating officers who make inquiries to the increased cost and trouble of the various organisations specified in the earlier amendments which we have been discussing.
  I believe that it would be helpful to know exactly what the Minister proposes to do about that. We have already pointed out that the department has a considerable number of regional offices and an even larger number of—
  Baroness Hollis of Heigham: Perhaps the noble Lord will allow me to intervene. I confess to having totally misunderstood the push of his amendment. My understanding was that he was anxious to ensure that all local authority inquiries came through the DSS and that, therefore, there would be no direct access.

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  If that is not what he seeks to achieve through this amendment—certainly, everything that he has said so far suggests that he is not going along that line—I am not sure whether the fault lies with us or with the drafting. However, that was our understanding, and I wonder whether the noble Lord would prefer to return to this issue on Report. We certainly envisaged a push in a very different direction from the one which he has specified. I am happy to explore the issue of local authorities and the DSS, but our lawyers' reading of the amendment took us in a different direction from that which the noble Lord is pursuing.
  Lord Higgins: I must confess that the amendment is a poor thing. It was drafted by me and therefore may not meet the high technical standards that the department requires. Having said that, I considered that what it sought to achieve was clear. It states:
  "Any authorised officer"
  we are clear who they are—
  "wishing to obtain information under this section"—
  that is, Clause 1—
  "shall make an application to the person holding it"—
  banks, building societies or whatever—
  "through that section of the Department of Social Security responsible for the investigation of fraud".
  Therefore, the information should be sought through the department. That may be information from the department itself, from one of its regional offices, or, as the noble Baroness supposes, from local authorities.
  We seek to suggest through the amendment that the inconvenience caused to the mostly unpaid organisations, with which we dealt earlier, should be as minimal as possible. Clearly, that is likely to be the case if the department has a central organisation which is responsible for the investigation of fraud. That organisation would then put the requests to the individual companies or other organisations from which it wished to obtain the information. That is the amendment's simple purpose.
  Clearly, two categories are involved: government departments and local authorities. We might consider whether it was appropriate for local authorities to act in the specified manner; otherwise, the electricity industry, for example, would have a mass of inquiries from 409—I believe that that is the right figure—local authorities seeking to prevent housing benefit fraud which felt that they must approach the industry. Such a shotgun effect on the electricity industry would be likely to cause a great deal more trouble than would otherwise be the case.
  If the noble Baroness has a totally different interpretation of the amendment, she will no doubt let us know, and we can take our debate from there. I beg to move.
  Baroness Hollis of Heigham: I am afraid to say that I do have a different interpretation. Our understanding is that the amendment would prevent local authorities from making any direct inquiries of the information providers listed in the Bill. Instead, local authorities would be obliged to channel all their
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  inquiries through the Department of Social Security. The noble Lord's opening remarks primarily concerned other government departments and regional offices of government. Our point is not that the amendment is technically defective; it may or may not be. We simply misunderstood where the noble Lord was coming from.
  The noble Lord moved on—I should not dream of suggesting whether or not he did so as a result of my prompting—to discuss local authorities. Local authorities need the relevant powers. They have a statutory duty to carry out the secure administration of the housing benefit and council tax benefit schemes. That includes investigating fraud against those benefits. Local authority investigators are properly trained. In its report published today, the Audit Commission acknowledges the progress made by local authorities in combating fraud. It recognises—I stress this is the Audit Commission, not us—that improved fraud prevention measures have led to a 30 per cent reduction in detected fraud.
  I understand the noble Lord's argument: he wishes to reduce the implications for those bodies that receive requests for information. However, we are also concerned to track fraud. We estimate that housing benefit fraud costs £600 million a year. That represents an unacceptable drain on the public purse and we must do all that we can to tackle it. We need and want to give powers to the DSS and local authority authorised officers so that we can tackle benefit fraud wherever we find it. Much of that fraud will occur at a local level and will be specific to an individual local authority.
  We recognise that there may be concerns about the performance of some local authorities in carrying out those duties, and we have stipulated in Clause 2 that local authorities may have online access to information providers only with the express consent of the Secretary of State. Different requirements apply to the making of a written request, the relevant provisions for which are contained in Clause 1. The provisions in Clause 2 will assure us that proper and acceptable management controls are in place with regard to the use of online access. Inquiries to those information providers that provide their information online through the DSS will have to be routed until they gain the Secretary of State's authority. 'To require them to route all inquiries through the DSS would be an unnecessary administrative burden for both parties.
  The effect of the amendment on local authorities would be to create an extra stage in the process of information gathering that would create unnecessary delays in resolving benefit entitlement, especially with regard to housing benefit, which is one of the three major areas of fraud. The other areas involve undeclared earnings although one is working and cohabiting while claiming lone-parent benefits.
  There would be a considerable risk of reducing the efficiency of DSS fraud investigators because they would inevitably have to read through the case referred from local authorities to establish the nature of the inquiry and to whom it should be addressed. They would also have to receive and pass back the

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  replies received—somewhat like a post-box—to the local authority, but there would be no parallel saving for local authorities. Local authorities would still generate the same number of inquiries but would simply be prevented from dealing with them in an efficient way.
  I suggest to the noble Lord that the amendment would create a substantial duplication of effort and extra cost. Each time there is a hand on, if I may put it that way, the possibility for error and fraud increases, and the amendment might multiply that effect. It would make the task of tackling fraud and error more complex. Moreover, it would not afford any more protection to businesses. I hope that the noble Lord will review the matter and withdraw the amendment.
  7.15 p.m.
  Lord Higgins: There is no difference between the noble Baroness and myself with regard to the need to combat fraud. The question is simply whether that can be done at minimum cost. I sought to achieve that end in the amendment. The amendment covers both angles; it is neutral about whether the department or local authorities acting through the department should concentrate their efforts in that regard. We shall later discuss relevant amendments on local authorities.
  The noble Baroness drew attention to various recent reports on local authorities. Last week, an interesting distinction between Wandsworth and Camden emerged. I make no political point; I merely note the difference between local authorities. We can go into that matter later when we discuss local authorities.
  The noble Baroness will know that local authorities are concerned about the fact that the costs of the operation will be borne by local authorities even though the money is that of central government. Again, we shall discuss that in more detail later.
  I shall consider the comments of the noble Baroness very carefully. Clearly, one does not want to introduce an extra layer. However, one may be able to achieve economies by concentrating applications. There may be a less close link, if I may put it that way, between the inquiries being made by local authorities and local organisations. I have some concern about confidentiality in that regard.
  In view of the reply of the noble Baroness, I shall see what I can do by way of redrafting the amendment to achieve its objective more efficiently. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Lord Higgins Lord Higgins moved Amendment No. 18:
  Page 2, line 23, at end insert—
  ("(2AB) Requests for information made to any of the persons specified in paragraphs (a) to (m) above shall be made to a central department in the organisation concerned.").
  The noble Lord said: The amendment is intended to be the mirror image of that which we have just discussed. Again, I have to confess that I drafted it myself, so it may not achieve its intended objectives. On the other hand, it may do.
  A considerable number of the specified organisations referred to in the amendment have expressed the concern that they do not want their various branches and organisations to be constantly diverted from their normal—and, one hopes, profitable—operations by having to respond to requests from the department that may take up time, incur costs and distract them from what they should be doing. Nearly all of those organisations would prefer to have any applications for information put through a central contact point so that its staff would become somewhat expert in the matter and would be able to provide satisfactory answers to the investigations carried out by the department. That is essentially the object of the exercise.
  The proposal has considerable and widespread support and appears to be a sensible way forward. It would also avoid the problem that we discussed earlier about whether applications should be made to individuals or servants of a company rather than to the company itself.
  The amendment has much to be said for it. It may require a degree of organisation in a company. On the other hand, those dealing with requests would also become much more expert than someone in a branch office who may not be familiar with the matter and who may not even be sure whether he is allowed to divulge the relevant information. He might be worried about the Data Protection Act 1998 and might say to an inspector, "I shall have to check the request with head office". It would be better if the application were made to the head office in the first place. That would avoid any doubts that an individual might have at the local level about whether he should provide the information and what information he was entitled to provide. I hope that the Government will agree to the amendment.
  Baroness Hollis of Heigham: If the Government accepted this amendment, the noble Lord would find himself the object of quite a lot of complaint from business. The effect of the amendment is to direct investigators to contact a central point in any organisation from whom they are seeking information. It removes the flexibility for organisations to decide for themselves as to how they would prefer our inquiries to be managed.
  We feel it would be foolish of us to stipulate how businesses should organise themselves. In any given case we will contact the organisation and will be happy for them to refer us to whoever they feel is best placed to deal with our inquiries. It may be a central point or it may be someone with local knowledge but, either way, we will be happy to deal with the person or the department that has been specified.
  We will seek to be as unobtrusive as possible. We will not ask for anything that is unreasonable or not readily available, as I hope our code of practice makes clear. So though the amendment seeks to place a restriction on investigators, in reality it places a

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  restriction on business. In the light of that, despite the fact that the noble Lord drafted the amendment, he may not wish to pursue its ownership too far.
  Lord Higgins: I understand the point the noble Baroness is making. But can we be clear about one thing?
  If the organisation concerned—let us say the electricity company, the gas company or, more particularly perhaps, the bank—felt that it would like all the requests for information to be addressed to a specific central point, will that be accepted? My understanding was, despite what the noble Baroness has just said, that a number of organisations would prefer to have a central point approached where those concerned are specialised; they are familiar with the legal position and so forth, rather than local branches dealing with something with which they are not familiar.
  If the noble Baroness can give me an assurance that if an organisation asks that all inquiries should be addressed to a central point, that will be accepted and facilitated, then I shall withdraw the amendment. I suspect Hansard does not reflect the nods and winks taking place.
  Baroness Hollis of Heigham: I did actually say yes, though I said it from a sedentary position. I am happy to stand up and say yes.
  Lord Higgins: On that basis I am happy to beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  The Deputy Chairman of Committees (Lord Lyell): I must advise the Committee that if Amendment No. 19 is accepted, I cannot call Amendment No. 20.
  Lord Astor of Hever Lord Astor of Hever moved Amendment No. 19:
  Page 2, line 24, leave out ("Subject to subsection (2D) below,").
  The noble Lord said: In moving Amendment No. 19, I shall speak also to Amendment No. 37. These are probing amendments to clarify an area of concern felt by the utility industries.
  The effect of the amendment would be to remove subsection (2D) from the Bill, which places the utility industries in particular in an entirely inconsistent position. A problem for the utility industries occurs in subsection (2D), which exempts the utility industries from the application of the important safeguards in subsections (2B) and (2C).
  The reasoning behind this distinction may well be that the Government want to make bulk requests for information from the utility companies which may cover information, for example, on the consumption of electricity from a vast number of addresses within a specific area. The Government want that information, presumably, because it will enable authorising officers to match that information against other data in order to identify potential cases of fraud.
  Clearly the safeguards set down in subsections (2B) and (2C) requiring grounds for suspicion against an individual would be difficult to satisfy in respect of requests for bulk information. That is why the Government want to remove utilities from the protection of that section.
  The important limitations provided by subsections (2B) and (2C) from widescale requests is thus removed by subsection (2D) and could place an even heavier burden on the utility companies. That burden could fall more heavily on certain companies due to the different areas of the country in which their customers are based and therefore their being subject to a greater number of requests for information. The burden, therefore, could have an effect on the level playing field of competition between utility companies.
  An additional concern is that the utilities may still, like other organisations, be subject to individual requests for information relating to specific individuals. Even if the distinction between bulk and individual requests for information can be maintained, it is not clear from the wording of subsection (2D) that it could not also be used to request information relating to the specific premises with which a person is connected. There is thus an inconsistency in respect of information requested from utility companies and that is surely not what the Government intended. I shall be grateful if the Minister could explain why the Government have not addressed that inconsistency.
  Finally, authorising officers have been much mentioned tonight. Perhaps I can clarify the Minister's reply to the first amendment when I thought I heard her say that they might only be relatively senior officers. I beg to move.
  Baroness Hollis of Heigham: These amendments seek to remove new subsection (2D) from the Bill, which would remove our capacity to obtain information from utility companies about patterns of consumption of water, gas and electricity at domestic premises. We seem to be repeating ourselves. We tried to group some of these amendments, perhaps unsuccessfully.
  We know that data matching is a very successful tool in combating fraud and error. An example would be where we found that two different women were claiming for the same child on separate income support claims and that led to uncovering a multiple scam with £1,000 a week being claimed fraudulently.
  So data matching is a practice endorsed by the Data Protection Commissioner who provided a foreword to our Data Matching Code of Practice. It has a well-tried history of throwing up the inconsistencies which lead one into further investigation. The new power would enable us to obtain information in bulk from utility companies to match against our social security records, so that abnormal patterns of consumption at addresses where benefit was in payment would be revealed. As I say, we have explored this issue and it should have been grouped with earlier amendments.
  When we consider asking a utility company for bulk data, we will do so in order to find addresses with abnormal levels of consumption. We will know what

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  we are looking for. We are not seeking, for example, to harass people who may be using a lot of fuel caring for a sick or elderly relative. We will be consulting a utility company to ensure that our estimates of abnormal consumption are realistic and that will probably change from supplier to supplier. We will then pay the company to search for records that meet the criteria we set, a payment that will cover the cost of writing specialist computer software or the purchase of extra hardware necessary to comply. That data would then be put onto disk and transferred to DSS under secure conditions as set out in data matching codes of practice. When we receive the information we will match it against our own records looking for inconsistencies.
  I do not know whether that explanation meets the concerns of the noble Lord. If so, I shall bring my remarks to a close. If he feels I can give him further information, I shall be happy to attempt to do so.
  Lord Astor of Hever: I am grateful to the noble Baroness for that explanation. I agree that the amendments should probably have been grouped with the earlier ones concerning utilities. This is a technical point. I shall go back to the utility industries and study what the Minister said. Meanwhile, I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Baroness Amos: I beg to move that the House do now resume. In moving this Motion I suggest that the Committee stage begin again not before 8.30 p.m.
  Moved accordingly, and, on Question, Motion agreed to.
  House resumed.

  Passive Smoking at Work
  7.30 p.m.
  Lord Faulkner of Worcester Lord Faulkner of Worcester rose to ask Her Majesty's Government when they will respond to the Health and Safety Commission's draft Approved Code of Practice and Guidance on Passive Smoking at Work.
  The noble Lord said: My Lords, I start by expressing my appreciation to noble Lords who have put down their names to speak in this short debate. I believe that by the end of the hour my noble friend Lord Whitty will have heard a number of powerful speeches in support of the draft approved code of practice issued by the Health and Safety Commission on passive smoking at work.
  There is overwhelming support in the country among most employers, virtually all trade unions and in both Houses of Parliament for new measures to protect employees from the effects of passive smoking. Even many heavy smokers accept the desirability of ensuring a smoke-free environment at work.
  The Office for National Statistics carried out a survey which showed that 89 per cent of the public favour restrictions on smoking at work, including some 69 per cent of current smokers. Despite that, there are still 3 million non-smokers who are frequently or continuously exposed to second-hand smoke. For many, it is not just an irritation; it can literally be a matter of life and death. The Government's scientific committee on tobacco and health concluded that,
  "long term exposure of non-smokers to environmental tobacco smoke caused an increased risk of lung cancer which, in those living with smokers, is in the region of 20 to 30 per cent".
  I am a patron of the Roy Castle Lung Cancer Foundation. Roy Castle did not smoke but contracted lung cancer as a result of working in the smoky atmosphere of clubs around the country.
  The scientific committee concluded that passive smoking also causes heart disease and respiratory illness, as well as cancer. From that committee, the issue passed to the Health and Safety Commission, which considered what more could be done. The Government's excellent White Paper, Smoking Kills, proposed that there should be an approved code of practice, which the Health and Safety Commission produced last year after lengthy and thorough consultation from July to October 1999, in which over 400 of 485 respondents backed the code. Taking account of views expressed in the consultation, the commission sent a carefully formulated and reasonable proposal to Ministers on 5th September last year. It is that we are debating.
  The code gives most employees the right to work in a smoke-free environment and the expectation that their employers will do what they can to reduce or eliminate smoke exposure. It is understood that there are particular sorts of establishments, such as prisons and offshore oil rigs, where exemptions may have to apply. The hospitality industry presents a special problem. I shall say more about that in a moment.
  The code gives practical meaning to the Health and Safety at Work Act as it should be applied. It works rather like the Highway Code. Failure to follow it will not be an offence in itself but its recommendations will strengthen the hand of employees taking legal action if they believe their health is not being sufficiently protected.
  When the code is implemented it will mean that for most people smoking in the workplace, other than in specially designated areas if the employer chooses to provide them, will be a thing of the past. It will make a considerable contribution to improving health and a much more pleasant environment for those who do not wish to breathe other people's tobacco smoke. As I said, there is huge popular support for the code. A call for its immediate implementation is the subject of an Early Day Motion in another place and has already attracted 130 signatures.
  Every organisation which advises the Government on health and employment issues is in favour, particularly the Department of Health whose contribution to tackling the harm that the tobacco

  867
  industry and its products inflict on the nation's health has been outstanding. In common with many noble Lords, I look forward to receiving and passing the Bill to end tobacco advertising and sponsorship, which is now in Committee in another place.
  The consultative document of the Health and Safety Commission included a regulatory impact assessment, which is required for new regulations and approved codes of practice. The original version contained estimates which showed that total costs outweighed total benefits, but those did not include health benefits from stopping smoking and reducing deaths from lung cancer. As those would take some while to work through, the period covered by the regulatory impact assessment was extended from 10 years to 25 years. As a result, the estimated total benefits to society will be between £9.1 billion and £21.1 billion, while the estimated costs are between £2.8 billion and £3.3 billion.
  Clearly, when carried out in conjunction with other measures the Government are taking to reduce tobacco consumption, that measure will produce huge benefits for the health of our people. So why the delay? From the inquiries I have made in the past few days it is clear that the problem lies with the hospitality industry, which is clearly being aided and abetted by the tobacco lobby. Between them they are attempting to block or water down the approved code.
  I understand why cigarette manufacturers go on trying to stem the tide against tobacco smoking and oppose measures which stop them promoting their products to young people. We must remember that they are killing 120,000 people a year in the United Kingdom and have to replace the customers who die with young smokers. But why do those who represent pubs, clubs and restaurants stand in the way of measures which will not only improve the environment for everyone in their premises and attract people like me who hate going into a pub if the atmosphere is heavy with tobacco smoke, but which will also make the working environment for the staff healthier and more pleasant? They argue that they are already doing their bit by introducing what they call a "public places charter" in which non-smoking is accepted as the norm and the provision of smoke-free places is promised. By 2002 50 per cent of venues are supposed to comply with the charter, which is voluntary.
  They have a long way to go. We are already into the second month of 2001 and just 1 per cent are charter-compliant. The public places charter is about giving the customers of the hospitality industry the opportunity to have a drink or meal in a smoke-free environment. The approved code of practice on passive smoking is about protecting employees. The two, therefore, should go together. It is not reasonable for workers in restaurants and bars to have to rely on the compliance of their employers with the voluntary charter, particularly as so many such employees are poorly paid, non-unionised and unable to take their bosses to task if they are not being treated properly. At the very least they have the right to expect that a bar where smoking is permitted is properly ventilated and
  868
  that they do not have to breathe the smoke of customers who would otherwise puff away over them where they are working.
  I hope that the Government will not give way to the hospitality industry and allow their workers to be denied the same rights and protection that the rest of the working population will derive from the approved code of practice.
  Finally, I want to say a brief word about the conditions under which employees work in your Lordships' House and the application of the approved code of practice here. On 23rd October last year in a Starred Question I asked how it was envisaged that the House authorities would comply with the approved code of practice and whether we stood by the statement on page 34 of the House of Lords Staff Handbook that,
  "staff are entitled to work in a smoke-free atmosphere".
  The then Chairman of Committees, the noble Lord, Lord Boston of Faversham, said in reply:
  "It is indeed the policy of the House, as an employer, that staff of the House should be entitled to work in a smoke-free atmosphere if they want to do so. That policy has been agreed by the Whitley Committee of the House of Lords and is … set out in the staff handbook".
  Since the matter was last looked at by your Lordships, public attitudes towards passive smoking, particularly as they relate to places of employment and the hospitality industry, have altered significantly. I understand that the Refreshment Sub-Committee and the Library and Computers Sub-Committee of your Lordships' House are currently considering a number of proposals which will improve conditions for our staff and for all Members of the House who prefer to work in a smoke-free environment.
  We look forward to the outcome as far as it affects your Lordships' House. But even more important, for our welfare and that of our staff, is the need to see that the Approved Code of Practice and Guidance on Passive Smoking at Work is adopted by the Government and implemented across the country. I hope that my noble friend Lord Whitty will have positive comments to make on these matters when he replies.
  7.40 p.m.
  Baroness Massey of Darwen: My Lords, I am grateful to my noble friend Lord Faulkner of Worcester for introducing the debate. I strongly support the Approved Code of Practice and Guidance on Passive Smoking at Work and hope that Ministers will adopt it. It is, of course, not new law; it clarifies existing law, and careful consultation has taken place. Consultation is also recommended as part of a workplace's adoption of an approved code. I shall discuss that later.
  In 1604, that early health educator, James I, described tobacco as,
  "harmful to the braine, daungerous to the lungs, and in the Macke, stinking fume thereof, nearest resembling the horrible Stigian smoke of the pit that is bottomlesse".

  869
  In 1832, the poet, Goethe, said:
  "Smokers poison the air for miles around and suffocate responsible citizens who do not deign to defend themselves by retaliating in kind".
  Since those times, law enforcement relating to, for example, transport, and health education programmes, have raised awareness and changed opinion and behaviour in relation to smoking. However, action is still needed.
  Most smokers want to give up. Most non-smokers do not want to inhale other people's smoke. Public attitudes to smoking are clear in relation to smoking at work, in restaurants and in public places, even among smokers. As my noble friend Lord Faulkner said, 89 per cent of people want smoking restricted.
  I shall not go into the adverse health consequences of smoking in detail—for example, cancer, heart disease, stroke, infertility, erectile dysfunction and respiratory diseases—because they have been discussed and will no doubt be discussed further.
  It is significant that a passive smoker takes in I per cent of the smoke which an active smoker inhales. Passive smoking is dangerous and people should not be put at risk. The effects on clothes, furnishings, books and so forth are unpleasant and costly. Absenteeism and illness among smokers has a cost for employers. A study in Scotland estimated this to be as high as £33 million during 1995.
  I am particularly concerned about young people who may have no choice about avoiding passive smoking; for example, in schools, youth clubs and community centres. Perhaps passive smoking can encourage young people to become smokers, although I have no evidence for this. Employers have a duty to help employees to avoid passive smoking. Under the law of negligence, they are in danger of being sued or taken to a tribunal if they do not respect this.
  In some cases, smoking policies at work are not strong enough to protect employees. In 1999, a coalition of organisations recommended a process for implementing a code of practice in the workplace. In summary, there are five steps: consultation and negotiation with the workforce; time to prepare, implement and monitor a policy; assessment of costs involved and publicity for the policy; rearrangement of staff working areas; and providing help for those who want to stop smoking. That seems to me to be fair and democratic. It is about where and when people smoke, not about whether they choose to smoke. It is not a ban on smoking.
  As I said at the beginning of my contribution, I hope that the approved code of practice will be adopted. It would benefit smokers and non-smokers alike.
  7.45 p.m.
  Lord Monson: My Lords, I was tempted by the noble Baroness's quotation from James I to refer to that well-known anti-smoking zealot, Adolf Hitler, but I shall refrain from doing so. I must declare an interest as a supporter of the Freedom Organisation for the
  870
  Right to Enjoy Smoking Tobacco, otherwise known as FOREST. However, I should speak as I do even if I had no connection with that organisation.
  I must also state that no more than 10 per cent of my extended family and my friends smoke nowadays, so I am well aware of the sensitivities of non-smokers. Indeed, as a decidedly light smoker, I dislike a very smoky atmosphere.
  I must confess that I expected the document we are debating, which I saw only last night, to be as intolerant, absolutist, exaggerated and health-fascistic as most of the stuff put out by the anti-smoking lobby. So it was a pleasant surprise to find something relatively liberal, which I am sure would please the champion cigarette consumer in your Lordships' House, the noble Earl, Lord Russell, were he in his place. The document is liberal; it is cautious in its interpretation of statistics; and it is open to all points of view. However, it is not without fault, as I hope to show.
  One cannot assess the health risks, if any, in passive smoking until the risks in active smoking have been judged correctly. For reasons which I have given on at least three or four previous occasions—there is no time to do so in the five allotted minutes tonight—I contend that the estimate of 120,000 smoking-related deaths annually is highly suspect. A few years ago, the Government gave us a figure of 50,000, so it is curious that it should have risen 2.4 times in such a short time. Incidentally, a full-page article in today's press claims that 100,000 people die each year from consuming too much salt in their diet. That is an interesting claim to contemplate.
  No one would deny that heavy smoking is dangerous. Two good friends of ours, both barely into their 60s, died recently; one from emphysema and one from lung cancer. Both women smoked 60-plus cigarettes a day, as people tended to do 50 years ago. Thankfully, that is no longer the case. Against that, we should remember Mme Jeanne Calment, the Provencal lady who lived to the age of 119—or was it 121? —and who smoked two cigarettes a day, of course accompanied by plenty of wine, until she was 110. Mme Calment may have been lucky, but when one compares her two cigarettes a day with two cigarettes a year, which is equivalent to what a non-smoker in a smoking household passively inhales in the course of that year—that is shown by Dr Nilsson, a Swedish toxicologist—things are put into perspective.
  Commendably, the report does not try to link passive smoking with either lung cancer or heart disease but it does suggest a link with bronchitis and asthma. The only problem with that theory is that the incidence of asthma is increasing while the incidence of smoking is sharply decreasing. There is a much closer correlation between asthma and exhaust emissions from petrol and diesel engines.
  Luckily, there is one matter on which we can all agree; that is, the conclusion at paragraph 27 that tobacco smoke causes discomfort and irritation. On the assumption that that means "excessive" tobacco smoke, no one will deny that. However, solution (a) in

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  paragraph 34—that is, the complete ban on smoking at work—is both illiberal and unnecessary when options (c) and (d) are available. Perhaps I may comment briefly on option (d); that is, the provision of adequate ventilation. It need cost no more than £900 to have a modern air-cleaning system, employing extractor fans and charcoal filters, installed in an office or small pub of 100 cubic metres or thereabouts. That is the direction in which we should be travelling.
  There is one other much cheaper improvement that involves no wiring or machinery. It is common practice in the Indian subcontinent and South East Asia for ashtrays to contain a little sand or, more usually, water to ensure that when a cigarette is stubbed out it stays out. It is smouldering cigarettes that produce the nastiest smoke, as I am sure noble Lords have found. Moreover, the ashtrays are much easier to clean since they contain no tarry residues that must be scraped off. I believe that if your Lordships' House experimented with it for a trial period noble Lords would be pleasantly surprised by the improvement in the atmosphere, in every sense of the word.
  7.50 p.m.
  Baroness Gale: My Lords, I too thank my noble friend Lord Faulkner for initiating this important debate. Passive smoking kills. There is overwhelming evidence that people who are exposed to cigarette smoke but do not smoke themselves are in danger of contracting many illnesses that can lead to death. As to your Lordships' House, I was absolutely shocked when I used the Library for the first time and discovered that smoking was allowed. I do not know how many libraries in the country allow smoking, but there cannot be many. I have never smoked, and I do not wish to inhale other people's smoke. When I use the Library and find myself next to a noble Lord who smokes I must remove myself, which is extremely annoying. While I can remove myself, the staff in the Library cannot; they must carry on working there. That applies to all other areas in which staff work.
  For a number of years scientific evidence has been available to show that exposure to second-hand smoke causes diseases, worsens existing problems and in some cases may prove fatal. I am particularly concerned about the health of women staff in the House. Of the 200 women employed in your Lordships' House, many are of child-bearing age. Nowadays, even some noble Baronesses are young enough to become pregnant. Passive smoking has a harmful effect on pregnant women. This is extremely worrying. For example, a mother's exposure to passive smoking has been associated with lower birth weight, a higher risk of perinatal mortality and spontaneous abortions or miscarriage.
  New research carried out by the University of Bristol has shown that female fertility is reduced by passive smoking. That study of pregnancy and childhood found that if a non-smoking woman was exposed to passive smoking at home or in the workplace the chances that she would take more than 12 months to conceive were increased by 14 per cent.
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  It is now well known that women who smoke while trying to get pregnant decrease their chances of conceiving.
  The results of the research show that women who want to conceive should avoid all places where smoking is allowed. How can a woman member of staff in your Lordships' House do that? We have an obligation to provide a safe environment for all staff, men and women, but especially women of child-bearing age. I believe that the Health and Safety Commission's code of practice should be implemented. Given all the evidence available on the dangers of smoking, including passive smoking, I cannot understand why it is taking so long to implement a policy that is acceptable to staff and Peers.
  I am aware that over the past few years different committees have looked at this issue and some recommendations have been implemented. Small changes in smoking policy have been made hut, while they are welcome, they are not enough. Smoking kills. However, people who smoke do so in the knowledge that they endanger their health. Passive smokers cannot always avoid the situation.
  My preference is for a total ban on smoking throughout the whole House. I welcome the day when as I drive into the car park I see huddles of noble Lords puffing away merrily. I doubt whether that day will ever arrive. While I await that great day, I welcome a much more positive approach to the serious matter of passive smoking for the sake of the staff and Members of your Lordships' House. I look forward to the day, in the not too distant future, when a positive policy based on the code of practice is implemented.
  7.55 p.m.
  Baroness Gibson of Market Rasen: My Lords, I too thank my noble friend Lord Faulkner of Worcester for tabling this Unstarred Question and allowing noble Lords to debate this extremely important issue. I declare two interests. I am a former member of the Health and Safety Commission and served on that body at the time of the drafting of the ACOP, and an official of MSF, part of whose membership includes the former Tobacco Workers Union which has a proud history of promoting its members' interests and gaining good conditions of work for them.
  Smoking is an emotive issue. The Health and Safety Commission had a number of long and detailed debates before issuing the first consultative paper in July 1999. The resultant draft approved code of practice was drawn up after detailed consideration and discussion. The Health and Safety Commission worked very hard on the wording of the draft ACOP. I led on behalf of the TUC, and Rex Symonds, a splendid commissioner, led on behalf of the CBI. Rex Symonds was very aware of the attitude and fears of the hospitality industry about the ACOP, and he impressed those upon the commission. He and I spent long periods producing a wording which would be acceptable to both sides of industry. By 5th September 2000 we had achieved it.

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  The ACOP is much milder than many wanted, but as currently worded it can still be effective. At that time it satisfied both sides of industry. When the draft ACOP was launched on 5th September 2000, Bill Callaghan, chairman of the Health and Safety Commission, said:
  "We carefully considered the different options, including continuing with a voluntary approach, before deciding that the best way of protecting the three million people still exposed to environmental tobacco smoke was through an ACOP".
  Many employers have already taken steps to stop smoking in workplaces and so protect non-smoking workers. The effects of this can be witnessed daily as we travel around London. The sight of smoking workers huddled together outside their places of work is a familiar one. I, too, am not sure that it will ever happen here. However, I do not believe that that should be necessary. Surely a well ventilated room inside the building can be found to allow those who are addicted to cigarettes to satisfy their habit rather than have them exposed to London's inclement weather at all times of the year.
  As a non-smoker I have been lucky in my employment: I have not been exposed to passive smoking in my workplaces; indeed, my former employer, Clive Jenkins, was a fanatical anti-smoker. The first notices that I ever read about the dangers of passive smoking were in my union's head office. Therefore, the extent to which smoking was allowed in your Lordships' House came as an unpleasant shock to me.
  It has already been said that passive smoking is dangerous, particularly so for young children. Having a grandson with acute asthma brings that danger home to me in a stark way. Passive smoking also has non-health effects. I try to avoid smoky places because I do not wish my clothes, hair, car or home to smell of smoke. I expect smokers get used to it, but I never shall.
  The Government's delay in responding to the draft ACOP is very disappointing. Following an initial burst of great enthusiasm for action to be taken over smoking, there has been an ominous silence. Knowing the Ministers who were involved in the first discussions about taking swift action, I am sure that they have not changed their minds, but why the delay? Is it that the "big boys" in the hospitality industry have rejoined the debate? Can it be that government departments are at variance over the ACOP? Are the demands of the ACOP, which merely asks employers to take reasonably practicable steps to protect their staff, still too much? Is it still hoped that some kind of watered-down compromise can be reached over the already mild suggestions in the ACOP? I look forward to hearing from the Minister the reasons for the delay.
  Finally, at the beginning of my speech I referred to those working in the tobacco industry. As an ex-trade union official, I am well aware that what we are debating today will affect jobs in the tobacco industry. I urge the Government to remember that in their
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  deliberations. Any action on smoking will mean job losses. The irony is that many of the workers affected will be non-smokers.
  The Government have estimated that a 2.5 per cent reduction in tobacco consumption will result in approximately 1,700 job losses. Thanks to the efforts of the Tobacco Workers' Union over the years, those will be skilled and well paid jobs. Additionally, they may be in areas where other work is unavailable; for example, in the North East—in Darlington and Spennymoor. So if actions of this kind are taken, it is incumbent on us all to approach in a constructive manner any measures which will reduce tobacco consumption and to seek to provide alternative employment for any who lose their jobs.
  8 p.m.
  Viscount Simon: My Lords, I am delighted that my noble friend Lord Faulkner has initiated this short debate tonight.
  The effects of passive smoking on health are well documented, despite the denials of many smokers. I only wish that it was not necessary for me to have to reiterate them. However, it seems that the slow progress of the Government in responding to the HSC's recommendations compels me to.
  The Government are committed to reducing smoking across the board because they recognise the damage smoking does to people, especially children. Ministers have introduced a raft of measures aimed at reducing smoking which I wholeheartedly welcome; public health campaigns to encourage smokers to stop; nicotine replacement therapy on prescription; and a new helpline to support pregnant mothers who want to give up, to name but a few. In addition, of course, the Tobacco Advertising and Promotion Bill is currently making its way on to the statute book, or so I hope. It greatly troubles me, therefore, that, in the face of all these wonderful measures, the Government appear to be dragging their heels on responding to the HSC's approved code of practice on passive smoking at work.
  I feel that this is an appropriate time to declare an interest. As some of your Lordships may know, I developed asthma some six years ago, a debilitating long-term condition that affects the airways and causes symptoms of coughing, wheezing, a tight chest and increasing difficulty in breathing. The National Asthma Campaign, an independent charity, estimates that I am one of 3.4 million people in this country with asthma. That figure is rising rapidly. It is for that reason that I wanted to speak today, to highlight the effects of passive smoke inhalation on asthmatics and to urge the Government to make the ACOP a reality as soon as possible.
  The National Asthma Campaign believes, and I agree with it, that people with asthma have a right to breathe air that is free from the triggers that exacerbate their symptoms. One such trigger—other people's tobacco smoke—has a detrimental effect on as many as 80 per cent of people with asthma. At this stage I feel obliged to give one—I promise that it is only one—personal example within your Lordships' House which

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  may be of interest to the noble Lord, Lord Monson. Some time ago I was walking along the Library corridor. I passed the open door to the Library where someone was smoking a cigar. I inhaled the smoke once, and, despite taking the appropriate medication immediately, I had a serious asthma attack. The first opportunity to measure my breathing ability was some five hours after that one inhalation of smoke, at which time it was more than 30 per cent below my morning reading. I will never know what the reading was when I was unwell; it was probably very low indeed.
  The following day I measured the number of steps I had managed to walk before becoming very ill—only 15 paces. That is one reason why the HSC-recommended code is such a significant step towards improving the lives of the 3 million non-smokers, including people with asthma, who are still exposed to tobacco smoke at work. It is impossible to overestimate the positive impact the code will have on employees' health and quality of working life. There are some appalling stories of people having to compromise their health for fear of losing their jobs. For example, a middle-aged man was recently forced to leave his job as a greenkeeper because his colleagues refused to stop smoking when they took their breaks in the confines of a portakabin. He has not worked since.
  There has been some suggestion that elements of the Government are determined to block the code and that is the reason it is taking so long for the Government to respond to the HSC. I would ask those Members who see the code as nothing more than bureaucracy or an infringement of smokers' civil liberties: what about my right, and that of other people with asthma and other respiratory conditions, to go about my business free from the threat of an asthma attack brought on by those of my colleagues who refuse to confine their smoking to outside the workplace? Why should it be me who has to take precautions to avoid tobacco smoke at work by having to shut myself away at my desk, smoke-free, for most of the day? I will digress slightly to make the observation that those public houses that have either banned or curtailed smoking have increased their takings.
  The issue of passive smoking is a plain and simple one for the majority of people with asthma, whether it is at work or in any other public place; if we are in a smoky environment the impact on our symptoms is clearly visible and often immediate, as it is with me. People with asthma should not be forced to choose between unemployment and their health. I ask for the sake of the one in seven children with asthma—the workforce of the future—that the Government do not allow the code to be blocked by a tiny minority and that they make their response to the HSC known immediately.
  My final comment will be my definition of a no smoking area. It is an area where smoke can frequently be present, but smokers are not allowed to be.
  8.5 p.m.
  Lord Clement-Jones: My Lords, I add my thanks to the noble Lord, Lord Faulkner, for giving us a
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  welcome chance to press the Government to take action on passive smoking. The last debate we had on the subject was in November 1998. As I recall, it was initiated by the noble Lord, Lord Janner. We had high hopes of action on passive smoking in the workplace. The noble Lord, Lord Faulkner, described the chronology very cogently. We had the White Paper Smoking Kills at the end of that year. The ACOP emerged in July 1999 with a period of consultation until October. As the noble Lord described, the consultation demonstrated huge support for an approved code of practice on passive smoking.
  The Health Select Committee commended the code in its report on the tobacco industry and the health risks of smoking in June 2000. The Health and Safety Commission approved the new ACOP later that year.
  But from the Government there has been a thundering public silence on the subject, other than a statement in December by the Minister with responsibility for public health that the Government are still considering their response. Certain clues emerged in the Independent in December. But why should this be? Why are we waiting for action two years after the White Paper on smoking? Has the health risk diminished? The answer seems to be no.
  The Health Select Committee report concentrated heavily on the health evidence. As your Lordships have heard from the noble Viscount, Lord Simon, and the noble Lord, Lord Faulkner, passive smokers are at greater risk in terms of lung cancer, heart disease, and strokes and respiratory disease in particular. There may be some disagreement about the extent to which the risk has increased, but certainly there can be no dispute that it has. Now we have the recent evidence conducted by Sarah McGhee, of the University of Hong Kong, among 10,000 police officers in Hong Kong about exposure to passive smoking and the effect on respiratory symptoms.
  Has the character of the code changed? The answer is no. The code is not compulsory. It is not legally binding. It does not constitute an absolute ban on smoking in the workplace. The noble Lord, Lord Monson, used the word "liberal" in describing the code. What higher term of praise could I possibly envisage? As a number of noble Lords have pointed out, businesses must simply do what is reasonably practicable to control environmental tobacco smoke. Furthermore, it does not impose a total ban on pubs and clubs. In so far as they are affected, they will have two years to implement any changes needed to comply with the code. In the meantime they will be covered by the public places charter. Action will mainly take the form of installing extra ventilation. Certain noble Lords in the previous debate, as the noble Lord, Lord Monson, has done in this debate, described how this was already under way in the hospitality industry.
  Is environmental tobacco smoke a problem still? It is. A recent Consumers Association survey used in evidence to the Select Committee found three-quarters of respondents said that they were exposed to passive smoke in home, place of work, or places visited socially.

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  Is restricting smoking unpopular with the public? Absolutely not. Surveys show an overwhelming majority in favour of restrictions on smoking. Will the approved code of practice be a major burden on business? This is where some of the rather contentious figures put forward in the regulatory impact statement come into play. When I looked at the statement, my mind boggled. It seemed to be one of the most wildly exaggerated RIAs I had seen for a very long time. It seemed to be designed to kill the code of practice. I do not know where it emanated from. Even if one takes the figures of a FOREST supporter, such as those of the noble Lord, Lord Monson, the cost of ventilation in the hospitality industry seems to have been wildly exaggerated.
  What is my conclusion? The fact is that people should be entitled to avoid the dangers attached to other people's tobacco smoke. Without the appropriate codes, particularly at the workplace—
  Lord Faulkner of Worcester: My Lords, before the noble Lord moves on from the regulatory impact assessment, he may not be aware that the commission conducted a second study after representations were made following publication of the first draft. It then extended the timescale over which it saw the benefits flowing to the nation—because of the length of time that it takes for diseases such as lung cancer and heart disease to take effect as a result of passive smoking. If the noble Lord looks at those figures, he will see that the benefits that come from the interaction of the code are substantial and completely outweigh the costs.
  Lord Clement-Jones: My Lords, I entirely accept that. But the costs were not altered; the benefits may have been. The costs were still wildly out of line. Is it too much to ask that employees should be entitled to smoke-free work areas with good ventilation. I suggest that the Minister has a few questions to answer. What precisely are the Government's intentions? Will they re-examine as a matter of urgency the compliance costs and benefits? What further research is being undertaken about the impact of passive smoking? If they have reservations, what alternative proposals do they have?
  There is a very strong whiff of government on the run about this code and its treatment and there is certainly a cloud of suspicion on these Benches. I hope that the Minister can dispel it in his reply.
  8.12 p.m.
  Earl Howe: My Lords, I begin by thanking the noble Lord, Lord Faulkner, for introducing this debate so ably and by declaring my interest as a non-smoker. I am in fact a non-smoker who detests tobacco smoke, having done so since the age of 11 when I tried my first and only cigarette at the bottom of the garden. Both my parents, on the other hand, were smokers, and I like to believe that I have always been tolerant of those who may wish to light up, even if I never choose to do so myself.
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  However, the extent to which I am prepared to remain tolerant has perhaps waned in recent years, with my growing tendency to bronchitis and with the emergence of new scientific data on the effects of passive smoking. The first document on passive smoking that I read in any depth was the relevant section of the report of the Scientific Committee on Tobacco and Health, published three years ago. Many of the conclusions from that report were picked up in the Government's subsequent White Paper, Smoking Kills. There are some uncompromising messages there about the risks to non-smokers of inhaling environmental tobacco smoke, or ETS, if they live with a smoker. In the specific context of the workplace, the three messages of particular relevance are those relating to asthma, ischaemic heart disease and lung cancer.
  Here it is worth making the obvious but key point that, unlike, say, an evening out, where you can choose whether or not to go to a restaurant that allows smoking, time spent in the workplace is rather different. The element of choice is largely, if not wholly, absent. Furthermore, if you are exposed to tobacco smoke at work, you may well be exposed to it for a substantial proportion of the day and therefore, by extension, for a significant proportion of your lifetime. The risks associated with passive smoking in the workplace are therefore ones to be taken very seriously.
  As has been said by many noble Lords, there is wide support among employees for smoking restrictions in the workplace. The HSE mentions in its proposal that more than 3 million are estimated currently to be exposed to ETS at work. However, the key judgment to be made here is whether any further statutory action, as proposed by the HSE, is proportionate to the risk and to the cost. As the HSE concedes, we do not really know with any precision what the risks are of developing diseases such as cancer or heart disease from passive smoking at work. The risks from passive smoking are in any case dependent on the quantum of exposure to tobacco smoke. The risk to the health of people who already suffer from asthma or bronchitis is certainly much more clear cut. But already, under the law as it stands, employers have a duty to ensure the health, safety and welfare of all employees. For that reason I believe that the HSE is right to reject the option of yet more legislation. In so far as there are employees at risk, it is a question of making the existing law work better.
  The proposal of the HSE for an approved code of practice has obvious attractions. One of them is that it would provide clear guidance to employers without being overly prescriptive. Like the Highway Code, as the noble Lord, Lord Faulkner, pointed out, it could be used in evidence in a prosecution without its

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  provisions being mandatory in themselves for employers. In that sense I agree with the noble Lord, Lord Monson, that it could be described as "liberal".
  Lord Monson: My Lords, perhaps I may say, as the noble Lord, Lord Clement-Jones, made the same point, that I said "relatively liberal", not "absolutely liberal".
  Earl Howe: My Lords, I am about to qualify what I have just said, so I think that I would probably agree with the noble Lord.
  We must be absolutely sure that a new statutory code of practice, with all its attendant implications, is warranted. The code would be compulsory in the sense that a breach of it would lead almost automatically to a conviction in any health and safety prosecution. That aspect of it means that it is right to talk in terms of the burdens on business that it would impose. The costs of the code are estimated by the HSE at between £3.1 billion and £8.9 billion over 10 years, which is between two and four times larger than the estimated value of the benefits over the same period. Even if the benefits look somewhat rosier over the longer term, costs of that order, especially in a climate of deregulation, need to be justified.
  Paragraph 27 of the HSE proposal says that the main thrust of a code of practice would relate to ways of avoiding discomfort and irritation to employees—in other words, to welfare issues as distinct from health issues. Any benefits to health would be taken as following on from improvements to welfare. I find that statement troubling. It has all the look about it of a sledgehammer descending on a nut. Given that the benefits to health form only a proportion of the total quantifiable benefits of introducing a code, because about half the benefits relate to safety and productivity, the Government should be cautious about imposing the kind of cost burdens that would flow from this recommendation. Spending money to achieve better productivity should be a management decision, not a decision imposed by government. The benefits to safety and welfare, as quantified by the HSE, rest, as I read them, on some fairly tenuous assumptions, not the least of which is that the introduction of a code of practice which explicitly allows for the continuation of some smoking in parts of the workplace would result in a reduction of about 80 per cent of fires. If the Minister can enlighten me on why the HSE should have assumed so optimistic a figure as that, I should be grateful.
  My conclusion, given that I was interrupted, is very brief. With all due deference to the noble Lord, Lord Faulkner, I am not yet convinced that the case for a code of practice has yet been made, although the case for it may in time prove unanswerable if further evidence emerges.
  8.18 p.m.
  The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Lord Whitty): My Lords, I thank my noble friend Lord Faulkner for initiating this debate. It is an
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  issue which raises considerable passions, some of which, although not all, have been heard in the Chamber today. It is still a fairly controversial issue, in terms of both assessment of the evidence and what needs to be done about it.
  I declare my own interest. I was a smoker. I usually say that I gave up 30 years ago. What I actually mean is that I gave up buying cigarettes 30 years ago and then spent several decades cadging cigarettes from other people. But now I am a non-smoker and, by and large, I have been through the same process as the noble Earl, Lord Howe, and have become less tolerant as time has gone on.
  It should be recognised that a significant minority of the population still smoke. The interests of that minority should be borne in mind, and well as those of everyone else. In general, the case for action has been established and the issue before us is how to make workplaces less smoke prone and people less subject to continuous exposure to smoke. As the noble Earl, Lord Howe, pointed out, we need to take a proportionate approach to this.
  The Question refers to the Health and Safety Commission's proposal for an approved code of practice (ACOP). The Government have received an indication from the commission that it favours the introduction of an ACOP to help employers to comply with what is, of course, a pre-existing law regarding their obligations to the health and welfare of their employees. The present status is that the commission has yet to put formal advice to the Government. The Government are currently considering initial advice in relation to the proposal put forward on 5th September. We are still considering that advice because the issue is rather more complicated than may have been suggested by some noble Lords this evening. ft may be helpful if I set out some of the background to the issue.
  Under the Health and Safety at Work etc. Act 1974, all employers have the same duty to ensure, so far as is reasonably practicable, the health and welfare of their employees at work. Section 2(2)(e) of the Act requires them to provide a working environment for staff which is,
  "adequate as regards facilities and arrangements for their welfare at work".
  The HSE has already issued guidance on passive smoking at work in its booklet, Passive Smoking at Work.
  The Department of Health White Paper, Smoking Kills, issued in 1998, committed the HSE to consult on whether to introduce an approved code of practice. That consultative paper was issued in July 1999. The consultation exercise was completed in October 1999. The HSC then followed that through and put forward proposals to consult on a number of options, including an approved code of practice. Other options put forward in the consultation included new regulations, revising existing guidance, and enforcing the law more strictly. The outcome of the consultation, of which the Government have been informed, showed support for more action to be taken. The majority of respondents supported the proposal for an ACOP.

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  In reaching its decision, the HSC took into account a wide range of opinion, including the views of small businesses and a wide range of representations from the hospitality industry. The chair of the commission has informed me that the commission was particularly concerned about the possible costs of implementing the proposed ACOP in the hospitality sector. As a result, the HSC itself is minded to recommend special transitional arrangements for the hospitality industry, which already has its own voluntary code of practice, the Public Places Charter, although that is directed primarily at the public and customers. We have already recognised in the proposals put forward by the HSC that special conditions and considerations need to be applied in the hospitality sector.
  Problems are faced by small firms in general. Again, cost comes into this and I shall turn to that element later. However, particular difficulties are encountered by small firms in the hospitality sector where, by definition, on the one hand workers are probably more exposed because customers tend to go out for a smoke as well as for entertainment, but on the other hand, employers would have to face disproportionate costs in order to overcome the effects of smoke to the extent that has already been achieved in many factory and office workplaces.
  The key issue is the protection of the 3 million people who are exposed to smoke at work. However, it is also a question of protecting employers, because a pre-existing duty is in place. Employers need to indicate that they have taken reasonable steps to protect their workers in order to protect themselves from potential enforcement action or, more likely, civil action against them. An ACOP would undoubtedly assist in that, as would the implementation of an effective and rigorous voluntary agreement such as the Public Places Charter.
  As regards the question of science, a point raised by the noble Lord, Lord Monson, I think that it is clear that smoking has an effect not only in relation to bronchial diseases and asthma, but also to cancer. The Department of Health's White Paper indicates a 20 to 30 per cent greater chance of developing cancer after prolonged exposure to smoke. The noble Lord, Lord Clement-Jones, pointed out that this is a question of "how much" rather than "whether" exposure leads to disease.
  The noble Lord, Lord Monson, remarked that the introduction of the ACOP indicated a relatively liberal approach. That is indeed the case, in that it tries to devise options for different circumstances. The same might be said of the Public Places Charter, which would apply in the hospitality sector. The noble Baroness, Lady Massey, emphasised in particular the dangers to young people.
  My noble friend Lady Gale referred to the exposure of young women of child-bearing age. Much of what my noble friend referred to is probably a matter for the House authorities rather than for me, at least under the present circumstances. Nevertheless, a general issue of concern has been raised here and we do take seriously
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  the issue of pregnant women and their exposure to tobacco smoke. The proposed ACOP does not directly and specifically deal with this issue because the risks to such workers are covered by other specific legislation, in particular the Management and Health and Safety at Work Regulations 1999, which implement the European directive on pregnant workers. The regulations require employers to assess such risks and then to take appropriate action. That point is therefore already covered.
  It is true that the Government have taken some time and are continuing to take time to consider fully the implications of the proposed ACOP, in particular as regards its impact in the hospitality sector. The commission's proposal is aimed mainly at the workplace. In the hospitality sector, of course, it is predominantly customers whose smoke may most affect workers. The Public Places Charter, to which I have referred, and to which the HSC recommendation refers, is a charter drawn up by many of the larger employers in the hospitality trade. It advocates the use of written smoking policies, air cleaning and filtration, ventilation, and training. It is directed at protecting customers as well as employees.
  The HSC has therefore suggested that where the charter applies, compliance with it will count as complying with the proposed ACOP for a transitional period of two years. That would mean that any employer who has introduced a policy complying with the charter will be exempt from the provisions of the ACOP, provided that the needs of employees were also addressed in line with the provisions of the charter.
  The Government are considering that as a possible way of bringing protection into the hospitality sector. I should stress, however, that this should not be seen in any way as a form of discrimination against hospitality workers. It is simply a different way of introducing standards in the sector and one that would secure the support of the industry. The questions that remain are how rapidly, at what cost and under what requirements would the hospitality industry be required to introduce both the voluntary code and to attain ACOP standards.
  Lord Faulkner of Worcester: My Lords, I am grateful to my noble friend for giving way. Can the Minister tell the House how the Government propose to monitor the implementation of the Public Places Charter, given that it is a voluntary code? Is he satisfied with the progress that has already been made, given that it is supposed to be in place in 50 per cent of establishments by 2002?
  Lord Whitty: My Lords, we have not yet reached 2002. Considerable progress has been made, although it should be said that it has been achieved mainly among the larger establishments and employers. It is my hope that, were we to reach an understanding with the hospitality sector in this area, that progress will extend to smaller premises and employers.
  The noble Lord, Lord Clement-Jones, referred to the latest regulatory impact assessment. The latest version of the assessment continues to indicate that

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  fairly substantial costs will arise. It is also clear that a disproportionate part of those costs would have to be borne by the hospitality sector. Indeed, more than 70 per cent of the set-up costs would fall on the hospitality sector, and a disproportionate amount of that on the smaller businesses and premises within that sector. More than 50 per cent of the recurring costs will also fall on that sector.
  Of course, those are not necessarily additional costs over and above the costs of complying with the Public Places Charter—the additional costs may be somewhat less than that—but the cost falls disproportionately on the hospitality sector whether one talks about gross or net costs. That has to be taken into account.
  We are addressing the question of how both smaller businesses and the hospitality sector as a whole should meet adequate standards. Nevertheless, the Government accept that the benefits of doing something in this area are significant in terms of protection of workers. We need to assess the real benefits and the real costs. The Government are continuing to do that in discussions with representatives of industry as whole, the hospitality sector and the Health and Safety Commission.

  Social Security Fraud Bill [H.L.]
  8.31 p.m.
  House again in Committee on Clause 1.
  Lord Grabiner Lord Grabiner moved Amendment No. 20:
  Page 2, line 24, leave out ("subsection") and insert ("subsections (2C) and").
  The noble Lord said: In moving Amendment No. 20 I shall speak also to Amendments Nos. 22 and 38. I shall speak in support of Amendment No. 32 and say something about Amendment No. 29. For the purpose of Amendments Nos. 20, 22 and 38, it would be helpful for Members of the Committee to have handy a copy of the Bill, otherwise what I say will be essentially gibberish. Amendments Nos. 20 and 38 are consequential to Amendment No. 22.
  The amendments fall into two categories: technical and substantive. Perhaps I may speak first to the technical element. The amendments seek to clarify or simplify the drafting which currently incorporates the expression in subsection (2B),
  "for obtaining any information except in so far as—
  "(a) the information is information relating to a particular person".
  The short point I wish to make is that there is some unnecessary repetition in those words.
  We are then introduced to the concept of when it is legitimate to make someone the subject of an inquiry by subsection (2B)(b), where it states:
  "it appears to the authorised officer that it is legitimate to make that person the subject of an inquiry".
  The structure of the present drafting is that subsection (2C) goes on to define legitimacy by reference to the existence of reasonable grounds for
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  believing one or other of the matters listed in paragraphs (a), (b), (c) or (d). I believe—again this is a technical point—that the concept of legitimacy here is otiose.
  We can and should dispense with the repetition of the word "information"; and we can also abandon the concept of legitimacy because it is fully covered by the pre-condition that there must be reasonable grounds for believing that the identified person is or may be doing any of the things listed in paragraphs (a), (b), (c) and (d). Those are the technical matters. They are essentially designed to shorten and clarify the existing drafting.
  Leaving aside the technicalities, the more important substantive point is that the effect of these amendments will be to emphasise the importance of the need to identify a particular person by name or description. That expression does not appear in the current drafting. But it does appear in the suggested amendment and, therefore, if accepted, the particular person would have to be identified by name or description.
  I hope that such an amendment will make it clear beyond doubt that these provisions are not designed to be generally intrusive. On the contrary, they are intended to be highly specific and precise. That is all I wish to say by way of introduction in respect of those amendments.
  Perhaps I may now turn to the related amendment, Amendment No. 32, which stands in the names of the noble Lords, Lord Higgins and Lord Astor of Hever. The thrust of the amendment is to the effect that subsection (2C)(c) should be deleted. I should say, with some regret, that I was too late to add my name in support of the amendment.
  At Second Reading, the noble Earl, Lord Russell, my noble friend Lord Desai and the noble Lord, Lord Astor of Hever, expressed reservations about subsection (2C)(c). In summary, two concerns were put forward. First, that when deciding on the relevant class or description of persons, the authorised officer might, consciously or otherwise, take into account considerations which are impermissible, in particular in relation to one or other of the matters listed in Article 14 of the convention, such as sex, race, colour and so on.
  The second concern was not expressed at Second Reading in quite this way, but I think what it came to was that the concept behind paragraph (c) was vague and imprecise. I believe that the conceptual justification for the retention of paragraph (c) can he supported. An obvious example of something falling within that paragraph is the class consisting of previous offenders. It may well be reasonable to conclude that persons previously convicted of benefit fraud are statistically more likely to re-offend and that investigators should therefore have this proposed power. It would enable them to conduct investigations and to detect wrongdoing at an early stage without being hamstrung by the current powers, 'which, I suggest, are inadequate. No doubt it is possible to think of other examples.
  I acknowledge the real concerns which were expressed by noble Lords on all sides at Second Reading about the possibility that people may end up being categorised on a capricious or unlawful basis. Any categorisation which involves or takes into account an inadmissible factor would be offensive as being incompatible with Article 14 of the convention, and it would certainly, in my view, be judicially reviewable. Furthermore, any doubts there may be about this point could, of course, be clarified by the code of practice and by the proper training of authorised officers.
  Having said that, I have a nagging reservation about paragraph (c). The structure of paragraphs (a), (b) and (c) of subsection (2C) leads me to the view that you get to paragraph (c) in a case where neither paragraphs (a) nor (b) applies. It follows that, for the purposes of paragraph (c), the person in question, ex hypothesi, has not contravened, is not contravening and is not likely in the future to contravene the social security legislation. That is the starting-point for the analysis of paragraph (c). If those were the circumstances—and I certainly think that such circumstances could arise under the provision in subsection (2C)(c)—there must be some real doubt as to whether paragraph (c) is strictly necessary in order to deal with the problem.
  "Necessity" is the test under the Human Rights Act. The argument is nicely balanced. The exercise of the power would lead only to the ability to obtain information; it would not lead automatically to a prosecution. Still less would it lead inevitably to a conviction. On the whole, I believe that the Bill would be improved if this provision were deleted. Certainly, for what it is worth, my nagging concern would disappear. Therefore, I hope that my noble friend the Minister will give careful consideration to the suggested amendment, which has my support.
  I turn finally to Amendment No. 29 standing in the names of the noble Earl, Lord Russell, and the noble Lord, Lord Goodhart. Some criticism has been directed at the formula, to be found in paragraphs (a), (b) and (c), that a person,
  "is likely to contravene … the relevant social security legislation",
  or, as the case may be, "commit a benefit offence".
  Looked at from the point of view of the person concerned, it seems to me that the language of the Bill provides strong protection. First, there must be "reasonable grounds for believing", which are the words that lead into the relevant provisions. Secondly, the words "likely to" mean "more likely than not"—that is, more than 50 per cent; or, as a lawyer would put it, and I suppose I am in that sense qualified to put it this way, "on the balance of probabilities".
  The answer to the question of whether that provision can be satisfied is essentially fact-driven. It depends entirely on the information that is available to the person making the judgment. The language is abstract, but the answer to the question, "Was there a sufficient basis for making the request for the information?" depends entirely on the information which was then available to the investigating officer.
  It may be possible to find a different formula, and it is not beyond the wit of man to do so. However, I should be surprised if it turned out to be a better one from the point of view of the person who is the subject of the inquiry. I also emphasise the importance in this context of Section 29 of the Data Protection Act. In judging the reasonableness of this proposed legislation and whether or not it is human rights compatible, legislators are entitled—indeed, I would say, bound—to have regard to the fact that anticipating, preventing and detecting fraud is important and necessary, and we should not shrink from this point. Subject to the possibility that the language may be improved, the current drafting of these provisions produces a fair and balanced result. I beg to move.
  8.45 p.m.
  Lord Higgins: Once again, the Committee will be grateful to the noble Lord for his assistance in relation to the Bill. I suppose that in a real sense he should be regarded as its "father" whereas we are in the role of "midwife" rather than anything else. Obviously, we must put considerable weight on the noble Lord's remarks.
  I was under the impression that Amendment No. 32, standing in my name and that of my noble friend, was to be grouped with this set of amendments. The groupings list that I have in front of me seems to have it separated. But I entirely agree—
  Baroness Hollis of Heigham: It is grouped on the list that I have.
  Lord Higgins: The noble Baroness has a more updated list. I am entirely happy that it should be grouped; that is appropriate. As the noble Lord pointed out, he has tabled a series of amendments on specific points which are designed to improve the drafting—although, I think I am right in saying that to some extent, in improving the drafting, the amendments narrow the provisions of the clause to individuals rather than to any wider group. So this is not purely a drafting matter. It may well be that this is helpful in the context of whether the provision contravenes the Human Rights Act and so on. As I said at the beginning, there is bound to be a thread running through all our debates—either human rights or data protection.
  We have no wish to prolong proceedings or to have tedious repetition. Therefore, it will probably be helpful to the Committee if we deal with the broad issue of human rights when we come to debate whether the clause shall stand part. We have heard some powerful representations on that point. But it is clearly relevant in relation to this set of clauses, and particularly in relation to Amendment No. 32.
  Concern was expressed at Second Reading about the provision in the clause stating:
  "it is legitimate to make a person the subject of an inquiry if there are reasonable grounds for believing that he is or may be … (c) a person belonging to any description of persons who are more likely than others to fall within paragraph (a) or (b) above".

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  The concern was that the provision might be open to problems—for example, on grounds of race and so on—and would then fall contrary to Article 14 of the Human Rights Act. So there obviously is a problem in relation to discrimination on grounds of race or any other basis.
  There is also a more general concern. At Second Reading the noble Baroness cited the example of window cleaners. She seemed rather preoccupied with window cleaners in relation to an earlier amendment. Why all window cleaners should be stigmatised in this way, I do not understand. No doubt the Minister will produce other examples, but at present it seems that she is endeavouring to enter a rather specialist field! It seems to me that the subsection is objectionable. That is also the widespread view outside this Chamber.
  The noble Lord raised the question of whether the paragraph is likely to contravene the provisions. He rightly pointed out that this may reasonably be interpreted to mean a more than 50 per cent chance. I have the gravest doubts as to whether there is a more than 50 per chance of window cleaners engaging in social security fraud; however, it is a serious point. The question of the words "or is likely to" give legitimate cause for concern.
  The noble Lord raised other important aspects. We have received representations from a number of outside groups that the subsection could be used routinely and arbitrarily in circumstances where there is no reasonable suspicion of fraudulent activity or criminal conduct, and that such powers should be restricted to cases where there are reasonable grounds for believing that an offence has been committed. For all these reasons, there is a strong case for arguing that paragraph (c) should he deleted from subsection (2C).
  A further point raised by the noble Lord related to previous convictions. This brings us to the question of whether it is a person who has contravened—as against "is likely to contravene"—the social security regulations. The preoccupation there is that we must consider whether past offences should be taken into account when deciding whether or not a further offence is likely to" be perpetrated. Indeed, we come to this point later with the, "two strikes and you are out" argument. None the less, it is a point that we need to consider carefully.
  Overall, I believe this to be an important amendment. It would not be appropriate to vote on it tonight, but my feeling is that the noble Baroness would be wise to accept that new subsection (2C)(c) is objectionable on a number of counts. It is not really necessary for the correct functioning of the Bill. Indeed, that was borne out by the noble Lord's remarks on proposing the amendments and supporting, as I understand it, Amendment No. 32. On that basis, I very much hope that the noble Baroness will be able to accept the amendment. That would save us a good deal of time on Report.
  Earl Russell: We are dealing with a new subsection (2C) to the administration Act, which, I believe I am right in saying, attracted as much unfavourable
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  comment on Second Reading as the whole of the rest of the Bill put together. I support Amendments Nos. 20 and 22, tabled in the name of the noble Lord. Lord Grabiner. I am most grateful to him for his support for Amendment No. 32 to which my noble friend Lord Goodhart and I, as well as the two noble Lords on the Opposition Front Bench, have attached our names. I can only apologise to the noble Lord for depriving him of the opportunity of adding his name, which I should have been very happy to see there.
  The noble Lord explained the case against paragraph (c) with such wonderful lucidity that I can only wish that I shall be able to express it as clearly when we reach Third Reading. However, my misgivings extend a little wider than that. Essentially, they come under two headings. I do not believe that I have any objection to the Minister's policy intention, as we discovered that in the briefing meeting and on Second Reading. The Government are attempting to do something that I do not wish to stop them from doing. My concern is with the words with which it is expressed.
  In general terms, my concern falls under two headings. The first is that defining people as members of a class—that is, any class, even window cleaners—is not a prima face ground for suspicion, at least not a judicial prima face ground for suspicion. As soon as you identify people by a class, you are judging them on something other than their own nature, their own character and their own record of what they have done. For that reason, among many others, I was delighted by what the noble Lord, Lord Grabiner, said about Amendment No. 32.
  My other concern is that I feel a profound misgiving about any legislative drafting that defines what it is looking for by reference to the future rather than to the past. I believe that the Minister will understand why the section of my notes bearing on the whole of new subsection (2C) is headed, "The man most likely to". The concept recurs over and over again. As soon as you start talking about people who are "likely to" do certain things, you are into the area of prophecy. As every gambler and every weather-forecaster knows, prophecy is an extremely risky activity. But the point that emerges through listening carefully to the noble Lord, Lord Grabiner, and to the Minister, is that these projections that people are "likely to" do something normally rest on something solid that those people have done.
  Therefore, rather than using the prophecy as the defining feature of the Bill, it seems to me that it might be wiser to move away from the prophecy and return to the solid thing that the person has done that gave rise to the prophecy in the first place. The effect would be the same, but, conceptually, I would find it a great deal more acceptable. I hope that the Minister will understand why. Legislation, investigation and detection—which is what this is essentially—must rest on some genuine ground of suspicion, which focuses on the actual behaviour of that individual. As the words, "likely to" are being invoked because of something that the person has done, if we return to that activity we shall do rather better.

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  I had a first stab at making a draft to deal with the issue by way of Amendment No. 29, which is tabled in my name and that of my noble friend Lord Goodhart. It proposes to strike out all of these "likelies" and to authorise an investigation if there is reasonable ground for suspicion that the person has committed, or intends to commit, a benefit offence. I hope that the notion of intention covers the same ground that is invoked by the words "likely to". I believe that it does so in a slightly more concrete and, therefore, slightly better justiciable way. It is an amateur piece of drafting, to which I am not wedded. I shall listen carefully to any suggestions that the Minister makes for its improvement. However, it must be fastened on what the person has done. To me, that is the one essential element.
  If we had that ground and included the concept of intention, it seems to me that the subordinate paragraphs (a), (b) and (c) would no longer be necessary. We could then have the advantage that would please the noble and learned Lord, Lord Simon of Glaisdale, of keeping down the growing prolixity of the statute book. Other things being equal, that is a good objective. There is, perhaps, some policy intention behind paragraphs (a), (b) and (c) that I have missed and for which we still need words to express. If the Minister says so, I shall listen most carefully to what she has to say. I would be interested in trying to make a further draft to try to meet the Minister on that point.
  However, as far as I can see, Amendment No. 29 authorises investigation into all those whom the department wants to investigate. If that is not good enough, I shall be very interested to hear why not. With an open mind, I am ready to play it from there.
  Lord Goodhart: Perhaps I may briefly follow my noble friend Lord Russell. I believe that there is another problem with the use of the word, "likely" in that there is an ambiguity about it. Does it mean that you are prophesying something about the future, which I believe is the way that both the noble Lord, Lord Grabiner, and my noble friend have interpreted the word? It could also mean that you are looking not at someone who is likely at some future time to commit and offence, but at someone who is likely to be committing an offence now; and, indeed, if you investigate that fact, you will find that he is committing an offence. It seems to me that the Bill is perhaps directed at the second of those meanings. If you are simply looking at someone who has a propensity to commit an offence and may commit it in the future, you are unlikely to find any useful information now because, by definition, he is not committing an offence.
  Alternatively, if you are looking at someone who is the sort of person "likely to" commit that offence and if, by looking through the facts, you may find that he is committing it now, there would be some logic behind the provision. However, at the same time, that particular logic seems to me to lead to exactly the same problem that arises with new subsection (2C)(c); in
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  other words, you are investigating someone not because you have actual reason to believe that he is committing an offence, but simply because he is the sort of person who might be committing an offence. Indeed, if you look into the matter, you may find that he is committing an offence—
  Lord Higgins: I am experiencing some difficulty in following what the noble Lord is saying. I believe that we agreed earlier that the word "likely" might well mean more than 50 per cent. However, the noble Lord is suggesting that it is likely that someone is contravening the rules, which is surely the same thing. To say that someone is likely to be doing it now is surely the same as doing it now. I am having difficulty understanding the distinction that the noble Lord is seeking to make by way of an alternative interpretation of the word "likely".
  The noble Earl, Lord Russell, made a similar point about the problem with forecasting such matters. It seems to me that to say that someone intends to do something also poses a problem with regard to forecasting.
  9 p.m.
  Lord Grabiner: I respectfully agree with everything that the noble Lord, Lord Higgins, has just said. Apparently my noble friend Lady Hollis does not. We shall see how matters turn out. If the noble Lord, Lord Goodhart, is right, the words "or is likely to" add nothing to the words "is contravening". "Contravened" is the past tense; "is contravening" is the current tense; "is likely to contravene" is surely a futuristic prediction. Certainly that is how I read it. I believe that that is certainly the way that the noble Lord, Lord Higgins, reads it. That was what I tried to say when I spoke earlier.
  I believe that "is likely to" contains the element of prophesying which is the point that the noble Earl made. However, I am not sure that the words "intends to" or "is intending to", or whatever the language is, are anything more than an exercise in prophesying for the future. However, as I say, at the end of the day it is a question of language that everyone is comfortable with.
  Lord Goodhart: I hope that I may finish what I was in the middle of saying. The point is that if one uses "likely" in the sense of prophesying, then, more or less by definition, one will not be able to get any useful information because if the person is not doing it now but is likely to do it in the future, none of the information one can get from the various bodies will be of any use as they will not prove that he is committing any offence. The only point of getting information from those bodies is to give one evidence to support one's belief that the person is contravening a measure now.
  Baroness Hollis of Heigham: There may be some inconsistency; for example, the two NI numbers that were mentioned at Second Reading which require an explanation. If the explanation is satisfactory, clearly

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  the person is not likely to be committing an offence. But prima facie holding down two NI numbers suggests that there are reasonable grounds for believing that a person may be using those two numbers to commit an offence. We seek prevention rather than an after the event cure.
  Lord Goodhart: In that case, rather than using the word "likely", is it not better to say that he "is intending to commit"? It may be a matter of better drafting. If a person has a present intention, that is a different matter. There may be evidence that a person is now doing something which is preparatory to the commission of an offence. But, if one is simply talking in terms of someone who is likely to commit an offence, then it seems to me one returns to the problem of looking at someone and saying, "He is likely to commit an offence in the future because he has committed an offence or several offences in the past". I could accept the word "intending", but it seems to me that as present drafted the reference to someone who "is likely to commit" an offence is deeply unsatisfactory.
  Earl Russell: I hope that I may return to the points made by the noble Lord, Lord Higgins, and the noble Lord. Lord Grabiner. Both of them suggested that the intention is as much in relation to the future as the words "likely to". I recall an article by the late F W Maitland with the delightful title of The Early History of Malice Aforethought. Malice aforethought, mens rea, is a well recognised concept in the criminal law. The guilty intention is, if proved, a present fact. Here I think is the crucial distinction. If we can prove that there is a serious possibility that a person has an actual intention of committing a crime, we are proving that there is something in his behaviour—as my noble friend Lord Goodhart suggested, in his preparations or in his state of mind—which is evidence of an actual settled intention to commit a crime. That is something which the law is well used to investigating in court. Because it is, it has worked out a series of practical tests for doing that and it knows how to set about it. I am not aware that the law has any similar machinery for working out who is likely to do this, that and the other. When I think of the disagreement between my noble friend Lord Goodhart and the noble Lord, Lord Grabiner, both, I should have thought, people of great expertise in the construing of parliamentary statute, thinking of the case of Pepper v Hart, I wonder whether anyone reading our debates would be any the wiser about how to construe the words "likely to" and whether that is perhaps another reason for taking them out.
  Baroness Hollis of Heigham: We have been having a lovely time. I hope that I shall not be seen as spoiling that. We are dealing with Amendments Nos. 20, 22, 29, 32 and 38. I shall start with Amendment No. 22 and then speak to the consequential amendments. The key change in the amendment is to expand on the term "particular person" by providing that that person must be identified by name or description. Behind that
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  lies a concern expressed on Amendment No. 32 which is the link with the question of fishing and the need to identify more narrowly.
  Where we know the real name of a suspect—that occurs in the majority of cases—we would identify them by name. However, there are also instances where a person lies about who he or she is. For example, organised gangs manufacture many different identities in order to claim as much benefit as possible in false names. In those cases we may need to identify suspects about whom we are inquiring by using other information. Generally, this would be the address where the person was living. I think that the use of the term "by name or description" which my noble friend has suggested admirably sets out our needs and I am therefore content to accept his amendment. I also hope that the Committee will bear that in mind when we discuss later the suggestion of the noble Lord, Lord Higgins, that we amend the term "particular" to "specified". The other changes the amendment makes seem to express the provisions differently but do not alter them in any substantive way. Amendments Nos. 20 and 38 are, of course, consequential to Amendment No. 22 and of course I am happy to accept those.
  I now come to Amendment No. 32. There is clearly concern about the inclusion of the power to obtain information on people who are in groups which are more likely than others to commit fraud. I begin by explaining our thinking behind the provision. As the Committee knows, social security fraud is costing us over £2 billion a year, which is more than it costs to run the entire department. We have done a lot. We are measuring fraud in a systematic way. We have set targets. We have new checks. We have data matching. As a result, fraud is coming down. The latest figures show that fraud in income support and JSA has reduced from 9 per cent to 8.4 per cent. That is a tiny percentage but encompasses large numbers. Those figures were published in November of last year. The measurement exercises that we referred to at Second Reading—almost like a risk analysis—tell us a great deal about the type of person who commits fraud against the social security system. We know that fraud by people working and making claims costs over £300 million a year. We know that people lying about their family circumstances, usually because they are cohabiting but say that they are not, costs over £200 million a year. We know that income support claimants who have committed fraud previously are 70 per cent more likely—a statistic given by my noble friend—than others again to commit fraudulent income support claims. We know that claimants of income-related JSA are more likely than claimants of any other benefit to commit fraud. We know that lone parents who have recently separated from their partners are at greater risk than other lone parents of committing fraud.
  Lord Higgins: Do we have any corresponding figures on working families' tax credit?
  Baroness Hollis of Heigham: That is not a benefit; it is a tax credit. At present I have no evidence either way

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  on fraudulent claims. What evidence I have seen suggests that there have been some concerns about childcare arrangements. It is in part based on the information sent by the employer back to the Inland Revenue. However, if the noble Lord wishes me to pursue the point on another occasion I am happy to do so. I return to the substantive point. I appreciate that the noble Lord cannot resist attempting to turn the WFTC into a benefit rather than a credit!
  We need to make this information work for us. We want to use it to target our inquiries on those who are most likely to commit fraud—essentially, an analysis of risk. That is what lies behind the conclusion of the provision at new subsection (2C)(c)—the power to obtain information on a person who is in a group more likely than others to commit fraud.
  The debate today has raised significant concerns, highlighted originally by my noble friend Lord Grabiner, about how this power could be used. There is significant concern that this power could be used to target people on criteria such as race, sex, disability, sexual orientation and so on—concerns which were raised by the noble Earl, Lord Russell, at Second Reading. I assured him then, as I do today, that that is not our intention; nor would it be possible under these powers because race, sex or sexual orientation, or the fact that an individual has red hair, wears glasses, or anything else, does not increase the propensity to commit fraud.
  However, having said that, I do not make light of the Committee's concerns. It is true that the vast majority of lone parents are women. Although we would not select lone parenthood alone as a criterion for using these powers, I can see that the fact that most lone parents are women might cause concern. Listening to today's debate, I have wondered whether there is a different way which would allow us to make use of the information about the risk of fraud but which does not generate the kind of concerns raised. To that end I found the points raised by my noble friend Lord Grabiner and others extremely helpful. My noble friend knows a great deal about the problems we are facing and the need to have research information as the basis for targeting fraudulent activity.
  Having listened to my noble friend's remarks, and those of other noble Lords, I am minded to consider removing the power to obtain information on those in groups more likely than others to commit fraud. I refer to new subsection (2C)(c). My noble friend believes that we can address our concerns in other ways. However, I should like to reflect further on the consequences of removing this power before coming back with a final decision because there are "read across" areas in other parts of the Bill. I refer, for example, to the use of reverse searching of telephone directories as a means of fighting fraud. I may need to make other more specific provisions to cover other types of inquiry.
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  I take on board the Committee's concerns. I shall do my utmost to meet them by a government amendment on Report. Giving that undertaking in good faith, I hope that the noble Lord, Lord Higgins, will be able to withdraw Amendment No. 32.
  Amendment No. 29 seeks to address three issues. I shall take each in turn. First, the noble Earl seeks to explore whether we should retain the words "is likely to" in paragraphs (a) and (b) of what will be new subsection (2C). We have had an elegant discussion about the futuristic prophesying nature of the phrase. I shall try to give an example of an instance where we obtain information which leads us to believe that a person is intending to commit fraud—he is about to commit fraud. We want to prevent that. Where we come across such information, we need to be able to act on it. For example, if we found forged identity documents at an address receiving benefit payments, we would need to conduct checks into the forged identities to establish whether any of them were being used to obtain benefit. Another example would be where a person was reported to be about to do something—to start work, or commence education. Clearly we would ask him about it. However, if he denied it and we had reasonable grounds for not believing him, we could check with the prospective employer or UCAS to verify his story. If we found that he was lying, we could stop his benefit from the time the job or course commenced.
  The key point is when we come across information which leads us reasonably to believe that the person is more likely than not to commit fraud. That is why we have selected the words "is likely to" in this context. Having said that, I am attracted instead to the concept of injecting intent into the provision, as argued by the noble Earl, Lord Russell, and the noble Lord, Lord Goodhart. All the examples that I have given clearly indicate some idea of intent. However, again I should like to take time to reflect on the best way of capturing that concept in the provision. If the noble Earl will agree not to press his amendment, I shall undertake to return in good faith on Report with a new form of words that I hope will meet his concerns about intent.
  The second aspect of the noble Earl's amendment explores the provision relating to groups, which I dealt with on Amendment No. 32. I shall not repeat my comments. I have said that I shall reflect on the issue and see whether I can come back to meet those concerns.
  Finally, the amendment raises questions about information on family members. The noble Earl did not speak to that. Given that the issue may more properly be raised in a later group of amendments—his is almost a portfolio amendment—I shall come back to it later.
  I have promised to reconsider the wording of the provision to inject the concept of intent rather than likelihood to commit fraud. I shall also consider removing the power to obtain information on people in groups that are more likely than others to commit fraud and I have accepted the drafting changes

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  proposed by my noble friend Lord Grabiner, which would also narrow the provisions. In the light of all that, I hope that your Lordships might feel content.
  9.15 p.m.
  Earl Russell: I thank the Minister most warmly for everything that she has said. I entirely accept the need to reflect, probably at some leisure, on the drafting. The problems are complicated and with the best will in the world, which the Minister has offered us, they are not easily solved. Of course I accept the delay.
  I am delighted by the Minister's comments about Amendment No. 32. I am also very much encouraged on Amendment No. 29. I hope that any draft on which we might hypothetically agree will cover all the examples that the Minister gave. That is not what we have been talking about. It is simply a matter of the wording and the concept. In hope and gratitude, I shall wait for Report.
  Lord Higgins: We are certainly making progress. In that context, your Lordships are likely to improve the Bill, particularly given what the Minister has said.
  I have some difficulty with the issue of intent. Let us assume that the department has some evidence that a particular individual intends to commit an offence. As a result, it argues that it should get more information. There is then a problem. The department may approach the individual and say, "We think you are going to commit an offence", in which case we hope that the department will prevent him from doing so, but he may be rather surprised. The alternative is that the department does nothing and waits until he does it, in which case the department is probably an accessory. The noble Lord, Lord Grabiner, shakes his head. Whatever the right technical expression is for condoning an offence someone is about to commit, I merely throw that into the general argument for the noble Baroness to consider between now and Report.
  I am very pleased with what the Minister said on Amendment No. 32. We look forward to seeing what she can produce between now and Report. In the light of what she has said, I shall not move my amendment when we come to it.
  Lord Grabiner: I am grateful to my noble friend the Minister for accepting Amendments Nos. 20, 22 and 38. I am also grateful to other noble Lords who spoke in support of those amendments.
  On Question, amendment agreed to.
  Lord Higgins Lord Higgins moved Amendment No. 21:
  Page 2, line 25, leave out ("officer") and insert ("inspector duly authorised in accordance with the code of conduct set out by the Secretary of State for the purposes of this Act").
  The noble Lord said: I shall speak also to Amendments Nos. 47 and 48. The term "authorised officer" makes no suggestion of any qualification, training or guidance as to conduct. In view of the sensitivity of the issues to be dealt with, anyone conducting an investigation under the Bill ought to be qualified in all those respects. The Government have
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  yet to publish their code of conduct. We shall come to that issue later. We may be able to deal with the problem in that way.
  There is also some concern that officers who are put in that position will have no duty to put right any damage caused by the suspicions that they may have created with third parties. We referred to that point earlier with regard to credit agencies.
  Concern has also been expressed—we have received representations from outside organisations—about whether any other area exists—for example. under the Financial Services Act—in which people who are as unqualified as that are entitled to act as this legislation would enable them to act.
  A further point arises. As I understand it, the authorised persons will either be in the department or in local government. Given the incidence of housing and other benefit fraud and the number of reports of fraudulent operations elsewhere, I believe that we should be clear as to exactly what type of person will be authorised under the legislation. That is particularly the case with regard to some local authorities where recent reports suggest that they are not behaving as we would wish. In essence, we are saying that we should be clear as to what we intend.
  Finally, can the Minister tell us at what level, either in local government or in the Civil Service, the group of people who implement the Act will be? One always has difficulty with Civil Service grades. They tend to change and it is not always possible to be certain what the grades mean. If the noble Baroness can give an indication of the levels of qualification and payment, for want of a better way of putting it, which are likely to apply to those people, that would help to reassure us.
  Baroness Hollis of Heigham: Before the noble Lord sits down, perhaps I may ask him a question. One of his amendments refers to a code of conduct; the other to a code of practice. Is that simply a drafting slip or are there different intentions behind the two amendments?
  Lord Higgins: No; it is a drafting slip.
  Baroness Hollis of Heigham: This part of the debate is, in effect, the opening debate on the code of practice. The main import of the amendment is not the reference to the,
  "inspector duly authorised",
  but to,
  "authorised in accordance with the code of conduct",
  which we now understand to be the code of practice set out by the Secretary of State for the purposes of the Act. Therefore, I understood the push of the amendment to be the pursuit of our thinking on the code of practice and the implications of that.
  With regard to the noble Lord's point about the level of the officials within the DSS, I understand that they would be of at least executive officer grade. However, clearly their managers would be

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  considerably more senior than that and would be experienced officials. I am unable to give the local authority equivalent, but my guess is that the officials would be at either SO2 grade—that is, senior officer 2—or principal officer 1. I would have to seek further advice on the read-across grades but, if my memory of local government is correct, senior officer 2 grade would be approximately the same level. I shall have to write to the noble Lord on that matter.
  Again, for the most part, we are talking about people who have already developed skills in fraud investigation in exactly the same way as an experienced police fraud squad might include constables and sergeants as well as detective chief inspectors. Therefore, we are discussing people who are very experienced but who, none the less, would be under careful management by even more senior officials.
  I believe that the general point behind the amendment is the importance of the code of practice. We have always intended that the information-gathering provisions in Clauses 1 and 2 would be subject to the code. The code would cover such issues as what would and would not be reasonable under the powers, who would be able to make inquiries, the time allowed for organisations to answer inquiries, what action should be taken if organisations were having difficulty in answering questions, and the types of information that each organisation could provide.
  A code of practice would provide a clear guide to authorised officers, setting out the limitations of their powers and the standards of behaviour expected of them when conducting their inquiries. We also believe that the code would be helpful to data providers. In addition, it would help data subjects to understand what would become of their information.
  When my right honourable friend in the other place, Mr Rooker, and I briefed Peers on the provisions in the Bill a few days ago, we gave an undertaking that the department would produce a draft code of practice for the consideration of noble Lords before the Bill reaches its Report stage. That code is under discussion with the relevant businesses, and I hope to honour that commitment.
  I hope that I have addressed the noble Lord's broad concerns. If I have missed any, I hope that he will pursue them in a later debate.
  Lord Higgins: I am grateful to the noble Baroness. She quite rightly said that this matter is one aspect of our debate on the code of practice. If it is the Government's intention to deal with it in the code of practice, we need not discuss it in this debate. I hope that that is the Government's intention.
  Baroness Hollis of Heigham: That means that it may be sensible for our debate on the code of practice to wait until the draft code is available to noble Lords.
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  Far be it from me to suggest that the noble Lord might not want to move absolutely every amendment tonight, but the thought might have occurred to him.
  Lord Higgins: I am grateful to the noble Baroness for her reply.
  Baroness Noakes: Before my noble friend concludes his remarks, I want to ask a question about authorised officers, whom the noble Baroness said would be executive officers. They constitute a large band of people in the Civil Service, and they are accustomed to taking a large number of administrative decisions. I think I also heard her say that they would be subject to supervision. Will that supervision be covered by the code of practice? She talked about standards of behaviour and conduct in the code of practice, but she did not say how those relatively junior people—they are not senior in the general scheme of things—would be supervised before they carried out their responsibilities under the legislation.
  Baroness Hollis of Heigham: I am sure the noble Baroness will recall that I said that in the 13 local areas of the Benefits Agency there would be only a limited number of executive officers—I do not want to specify an exact number or to say whether we are concerned with five, 15 or 25—who will be specially trained to do the work. As I said earlier, that is why we have put such emphasis on training. Those officers will be supervised but the way in which an executive officer is supervised is not normally part of a code of practice. The code is a document that is available for those who seek information, those who receive information and those who are the subject of that information. It does not deal with the internal management practices of the DSS.
  Baroness Noakes: I accept what the noble Baroness says, but the executive officer level is not very senior and those who are on the receiving end of the requests for information need some assurance that they are getting a considered and mature reflection of the requirements of the DSS in fighting fraud. That is why I seek from her an assurance that those trained executive officers—I am sure that they will be trained—will have some form of more senior supervision before they issue what may be onerous requests under the legislation.
  Baroness Hollis of Heigham: The noble Baroness obviously has considerable experience of other public sector organisations. I am sure that she knows that in the Civil Service—certainly in local offices—executive officers are quite senior officials who take responsibility for decision-making. They decide whether a benefit claim is valid and put forward papers for decisions about prosecutions. We ask and expect a lot of our executive officers in terms of the scope of their authority and delegated powers. However, we expect them to be properly trained and we will expect them to be properly supervised.

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  I earlier gave assurances to the Committee about the way in which the use of passwords to get access to electronic information could be checked by senior officials to ensure that the information obtained is not misused or used in an inappropriate way. That will be part of internal DSS procedure. It is certainly not in the interests of the DSS to allow inappropriate behaviour.
  The noble Baroness will also know that the DSS already has very experienced staff in the Benefit Fraud Inspectorate. We shall add to their numbers in local offices and we shall work with local authorities in that regard. The noble Baroness does not need to worry about this. I have seen the work EOs do in other fields and they carry high degrees of responsibility competently and capably exercised.
  9.30 p.m.
  Baroness Noakes: But in the past EOs would not typically have been given these sorts of powers to impose burdens on business. It is in that context that I have a particular worry. I accept that they are casework officers; that is substantially what they are used for within the Civil Service. But I am particularly concerned that a single decision of a single executive officer, however well trained, could impose significant costs, especially when the Bill has limited proposals for reimbursement of costs to those providing information. There should be some further safeguard. If it is not in the code of practice I am at a loss as to how we can satisfy ourselves that it will exist.
  Lord Higgins: I am a little mystified. I understand the points being made by my noble friend and they are important. But the amendment states,
  "inspector duly authorised in accordance with the code of [practice] set out by the Secretary of State for the purposes of this Act".
  I understood the Minister to say in reply that that was something which would be covered in the code of practice. However, in answer to the intervention of my noble friend, she appears to be saying that it is something which will be done administratively and not in the code of practice. I am confused.
  Baroness Hollis of Heigham: We are making an issue out of something which does not exist. EO inspectors already have powers to demand access to employers' records. So the powers that these EOs have under the Bill are analogous to powers they already have in other areas of their work. I am saying that of course they will be monitored and supervised. But one does not put into a code of practice the internal monitoring arrangements of senior staff over junior staff. That is simply not appropriate for a code of practice. What is appropriate is the standard to which the EOs will be expected to work; what stringency will be applied to their examination; what reasonable grounds they will have for pursuing a certain direction; what access they may be expecting and what help and support they will be expecting from the organisation. That is what we are talking about; not internal management of a
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  particular section. I have never seen a code of practice in my life containing that kind of thing. I am puzzled that I should be asked about it.
  Lord Higgins: There is still, I fear, a certain amount of confusion. We shall need to consider to what extent it will be appropriate to incorporate something in the code of practice with regard to qualifications and so forth.
  Baroness Hollis of Heigham: I am perfectly willing to take away and consider this matter to try to reassure the Committee that if there are complaints or concerns by data-providing bodies there is a more senior official to whom they can go over the head of the EO. If that will address the substance of the noble Baroness's point, I am willing to take it away and think about it. But I do not want to start specifying line management, diagrams, salary rates and so forth; they are not part of the code of practice. If that is helpful, I am perfectly willing to do that.
  Baroness Noakes: I thank the Minister for that and look forward to that reassurance.
  Lord Higgins: In that case we are all grateful to the noble Baroness. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Lord Grabiner Lord Grabiner moved Amendment No. 22:
  Page 2, line 26, leave out from ("shall") to ("is") in line 34 and insert ("be exercisable for the purpose only of obtaining information relating to a particular person identified (by name or description) by the officer.
  (2C') An authorised officer shall not, in exercise of those powers require any information from any person by virtue of his falling within subsection (2A) above unless it appears to that officer that there are reasonable grounds for believing that the identified person to whom it relates").
  On Question, amendment agreed to.
  Lord Higgins Lord Higgins moved Amendment No. 23:
  Page 2, line 27, at end insert—
  ("( ) the information is information that has already been collected and retained in the normal course of business;").
  The noble Lord said: Amendment No. 23 stands in my name and that of my noble friend. It is an extremely simple amendment compared with anything else we have been discussing. It merely suggests that the information that can be demanded by the authorised official seeking to obtain information to prevent fraud should be that which is collected in the normal course of a business. I hope that the noble Baroness ca n simply stand up and say, "Yes, we agree to the amendment. There is no question of asking those particular organisations to produce custom-built data", if that is the right expression, "for the purpose of the inquiries". I shall settle for "customised", if the Minister prefers. I beg to move.
  Baroness Hollis of Heigham: Yes; we do not expect businesses to go out of their way to get information for

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  us. Where we ask them to perform a unique data-processing function, for example a reverse search of the telephone directory, or to provide data in bulk, we have already said that we shall pay for it. In this case the information is already available and collected as part of a company's normal business.
  We shall make use of such information as organisations are able to provide. We shall not make unreasonable demands on retention or that they somehow recreate data that has been erased or destroyed. If the information is not available, we shall look elsewhere or do without. I hope that the noble Lord is pleased with that reply.
  Lord Higgins: Perhaps I misheard the noble Baroness. I thought that she accepted the amendment.
  Baroness Hollis of Heigham: No, I said that I hoped that the noble Lord was well pleased and that he does not need to move the amendment. I was giving the noble Lord an assurance that the amendment will not be necessary because we shall not be asking businesses for information that they do not hold.
  Lord Higgins: I thought that it would be better to put it on the face of the Bill. None the less, given that assurance, I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Lord Astor of Hever Lord Astor of Hever had given notice of his intention to move Amendment No. 24:
  Page 2, line 28, leave out ("particular").
  The noble Lord said: I shall not move Amendments Nos. 24 and 25 but, with the leave of the Committee, I shall speak to Amendments Nos. 41, 50 and 55.
  Baroness Hollis of Heigham: I am happy for Amendments Nos. 24 and 25 not to be moved. We have already discussed the matter substantively and I understand what the noble Lord wants to do. Perhaps I may suggest that we postpone the discussion until we reach Amendments No. 41, when he can move and speak to the amendment substantively.
  [Amendment No. 24 not moved.]
  [Amendments Nos. 25 and 26 not moved.]
  Lord Higgins Lord Higgins moved Amendment No. 27:
  Page 2, line 31, at end insert—
  ("(2BA) Requests for information shall not require the person providing the information to inform an authorised officer of any future change in the information provided.").
  The noble Lord said: Amendment No. 27 is straightforward. As with the previous amendment, which the noble Baroness accepted in principle and on which she gave an undertaking, I hope that she can accept it. It seems important to us to minimise the burden on business as far as possible. In our view it would be extremely onerous if, having provided the authorised inspector with a particular set of information, there was any obligation on him to update it from day to day. It would require a
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  considerable operation for that to be done without contravening the Act or failing to provide information for which the department had asked. I hope that the Minister can accept this simple and important amendment. I beg to move.
  Lord Desai: I apologise to the Committee. I arrived a little late and I am confused. I thought that we had accepted Amendment No. 22, which removes several lines. If we had, is it still in order to move Amendment No. 27?
  The Deputy Chairman of Committees (Lord Ampthill): The amendment was debated at some length in the noble Lord's absence, but he has no way of knowing that. Does the noble Lord wish to speak to the amendment?
  Lord Desai: No, I was just a little puzzled.
  Earl Russell: Perhaps I may ask one question about the meaning of the amendment before the Committee. It refers to information in the future. We come back to the question of intention, the future and the present. My example is that of a certain unmarried woman, shall we say a Miss Smith, who has informed the bank that she will, in the next few weeks, become Mrs Snodgrass. That could be material information to someone who wants to investigate a bank account.
  Becoming Mrs Snodgrass is in the future but the expression of a clear intention to do so is in the present. Does the noble Lord, Lord Higgins, intend to prohibit the gathering of that information or not?
  Lord Higgins: The sad case of Mrs Snodgrass obviously needs careful consideration. Whether she is entitled to various benefits for married women is an even more partisan question. I take the point that the noble Earl made and do not doubt that the Minister has an appropriate answer.
  Baroness Hollis of Heigham: Returning to the substantive amendment, I assure noble Lords that we would not ask companies to inform us of future changes in the information that they had given to us. That will be made plain in our code of practice and administrative guidance to staff. It is unnecessary to put it on the face of the Bill and I hope that in the light of that assurance the noble Lord will withdraw the amendment. And I duck Mrs Snodgrass!
  Lord Higgins: In the light of that reply, I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  [Amendments Nos. 28 and 29 not moved.]
  Lord Astor of Hever Lord Astor of Hever had given notice of his intention to move Amendment No. 30:
  Page 2, line 35, leave out (", is contravening or is likely to contravene") and insert ("or is contravening").
  The noble Lord said: I rise to speak in the briefest possible terms to Amendments Nos. 30 and 31. They are crucial amendments relating to fishing expeditions.

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  However, I accept that the subject has been debated at length tonight. We want to consider carefully the points that have been made as they relate to these amendments. Accordingly, and with the leave of the noble Earl, Lord Russell, and the noble Lord, Lord Goodhart, who have put their names to the amendments, I shall not move them.
  [Amendment No. 30 not moved.]
  [Amendments Nos. 31 and 32 not moved.]
  Lord Higgins Lord Higgins moved Amendment No. 33:
  Page 2, leave out lines 42 to 44.
  The noble Lord said: This is an important amendment and relates to the controversial Amendment No. 32, which was not moved in the light of the points made and undertakings given by the Minister. There are four paragraphs in subsection (2C) of the new section which appears in Clause 1 and we have dealt with the first two. Paragraph (d) provides that it is legitimate to make a person the subject of an inquiry if there are reasonable grounds for believing that he is or may be,
  "a person who (within the meaning of Part VII of the Contributions and Benefits Act) is a member of the family of a person falling within paragraph (a), (b) or (c) above".
  We have already dealt with the case of someone falling into the category of paragraph (d), who is related to a person in paragraph (c). We hope that category (c) will disappear. Therefore, the question is whether it is appropriate to have paragraph (d) in relation to paragraphs (a) and (b). Paragraph (a) deals with,
  "a person who has contravened, is contravening or is likely to contravene provisions of the … legislation".
  We have discussed the wording of that provision and have doubts about it. Paragraph (b) deals with
  "a person who has committed, or is committing or is likely to commit a benefit offence".
  The question is whether a member of the family of a person in either of those two categories ought also to be the subject of an inquiry. Unlike those dealt with in paragraphs (a) and (b), these people are not (to use the department's language) customers but simply members of the same family.
  We have a number of doubts about this provision, not least the point raised earlier by the noble Lord, Lord Grabiner; namely, that in the context of human rights legislation it is important that the individual should be clearly identified. I do not believe that paragraph (d) clearly defines anyone. We shall come to the question of human rights in the debate on clause stand part. However, it is doubtful whether the particular provision is appropriate, although the extent to which it is objectionable will be ameliorated if we eliminate paragraph (c).
  9.45 p.m.
  Baroness Hollis of Heigham: I wonder whether the noble Lord has reflected on my earlier remarks about the three main forms of benefit fraud: first, fraud associated with claiming while in work; secondly, fraud related to housing benefit in various forms; and,
  904
  thirdly, fraud which arises when two people live together but one claims as if she is a single parent. That is one of the most substantial areas of benefit fraud. The amendment seeks to prevent authorised officers from making inquiries about a claimant's family or people who are suspected of living with the person who claims benefit as a single person. We need to obtain information about a claimant's family because that individual's circumstances affect entitlement to benefit which, as the noble Lord is aware, is household-assessed. Therefore, one needs information about members of the household; it cannot be done in any other way.
  The whole range of income-related benefits are household-based. Therefore, one needs to know about the component parts of the household and the family; one cannot escape that. For example, last year £18 million of income support and JSA was overpaid because claimants had not declared their partners' earnings. In addition, £216 million of IS and JSA was overpaid last year because people claimed as single people when they were living with someone as husband or wife. We need to be able to obtain information about possible, or suspected, partners in order to prove that they are living with single claimants. For example, if we suspected that a single claimant lived with someone we might check with the claimant's utility providers to see whether the suspected partner paid the utility bills, or check with the bank to see whether or not he or she had a joint account.
  I could go on. The definition of "family" is quite tight. However, given that a considerable amount of benefit fraud is based on fraudulent and inaccurate information about household income, relationships and members of that household, we must have these provisions in the Bill. I very much hope that, with that explanation about income-related benefits in particular, the noble Lord will be able to withdraw his amendment.
  Lord Higgins: I well understand the extent to which fraud arises in the circumstances outlined by the noble Baroness. None the less, perhaps I may clarify one point. The paragraph reads:
  "a person who (within the meaning of Part VII of the Contributions and Benefits Act) is a member of the family".
  I regret that I do not have with me Part VII of that Act. As the noble Baroness rightly points out, it is a question of the definition of "household", in which case I am not clear why the paragraph does not read,
  "is a member of the household of a person falling within that Act".
  There are also other problems. If it is a family it may well have nothing to do with cohabitation; the person may be a cousin, sister and so on. No doubt the noble Baroness will correct me if that is not the case. It may be that in one sense there is a relationship but the second person concerned does not live in the same household. Perhaps the noble Baroness can clarify those particular points. I agree that this is an

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  important issue. My objections to it are much ameliorated by the possibility that paragraph (c) will no longer apply.
  Baroness Hollis of Heigham: It was not meant to be—if I can put it this way—a fishing trip way of getting at information. It was actually about where the offence is constituted by relationship of one person with another. That is why one needs that information.
  The concept of family is the absolutely bog-standard one in DSS law. It includes married or unmarried couples in the same household and any of their children or dependants living in that household. It also covers a single person—for example, a lone parent—and any of his or her children or dependants living in that household.
  The provision would not enable authorised officers to obtain information about a claimant's brother living at the same address as a claimant. Nor would it enable them to obtain information about a claimant's separated partner unless he or she was suspected of living with the claimant as husband and wife. So it is the absolutely standard definition in terms of income support, JSA, and so on, of "couple and dependant children or other dependants".
  Lord Higgins: I am grateful for that explanation. Presumably it could still include the teenage daughter of a member—
  Baroness Hollis of Heigham: If the teenage daughter or someone below the age of 16, or even possibly below the age of 19, is in full-time education and the claimant was receiving income support or JSA for that child, certainly yes. It might be that that child of 16 or 17 was actually in work but he or she was still claiming benefit for that child.
  Earl Russell: The definition of a family is embedded in social security law right back to the National Assistance Act 1948. It is deep in the case law and in the terminology of the subject. It would be extremely difficult to uproot it if we thought it desirable, which, personally, I do not.
  Lord Higgins: In the light of all that, I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Lord Astor of Hever Lord Astor of Hever moved Amendment No. 34:
  Clause 1, page 2, line 44, at end insert—
  ("( ) It shall not be legitimate to make a person the subject of an inquiry on the basis of a spot check or any automated form of selection.").
  The noble Lord said: We wish to ensure that all investigations into individual cases are initiated on appropriate grounds for suspicion and not via any random trawling through innocent persons' information.
  The amendment seeks to probe how far the Government are prepared to use the legislation to intrude on innocent activity and individuals. We are
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  concerned that, should individual local authorities or authorised bodies fail to meet those fraud reduction targets set for them, they will find other ways indiscriminately to discover perpetrators of fraud. These may include spot checks of the kind the amendment prevents. While these checks might catch some criminals, it would be at too high a cost to the rights of innocent individuals.
  Although we are in favour of setting targets, it is vital for them to be meaningful and not abused. It is important to determine the limit to which officials may exercise their powers and to provide some protection for the rights of individuals. Where there is no suspicion, evidence or history of criminal activity, the Government should not allow for random, unsubstantiated fishing trips to take place. I beg to move.
  Earl Russell: I am not capable of forming a final decision on the amendment at the moment because I very much hope that the re-drafting of new subsection (2C) will make perfectly plain that it is unnecessary. But were it proved to be necessary I would then support it with alacrity.
  Baroness Hollis of Heigham: This is another amendment that could usefully be grouped back with the other discussion. The amendment would prevent us from making inquiries of people selected on the basis of spot checks or through any automated form of selection. It would prevent us using the powers in two ways. First, it would prevent us making inquiries about people selected on a random basis. There is nothing in the Bill that would allow us to make inquiries about a person selected at random. We need reasonable grounds to believe that he or she has committed fraud either now or in the past, or, following my undertaking, intends to commit fraud.
  Secondly, the amendment prevents us from making inquiries of people identified by an automated process. The only instance where we would be able to do so is where we have made inquiries of people under new Section (2C)(c) who were disproportionately likely to commit fraud. Any other suspicions of fraud would be in response to some evidence, such as a tip-off from a former partner, a workmate or a person's behaviour, and this could not be automated. So on those grounds, too, the amendment is unnecessary.
  New subsection (2C) states that we need "reasonable grounds" for making such inquiries. "Reasonable grounds" are not covered by random checks, spot checks or anything else. Our decisions have to be based on objective evidence; that is, reasonable grounds for having a well-founded belief. With those assurances, I hope that the noble Lord will feel able to withdraw the amendment.
  Lord Astor of Hever: In the light of the firm assurances given by the Minister, I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Lord Higgins Lord Higgins moved Amendment No. 35:
  Page 2, line 44, at end insert—
  ("( ) Nothing in this Act shall authorise an inquiry which contravenes any provision of the Data Protection Act 1998.").
  The noble Lord said: It is not my intention to go over the same points I made in moving Amendment No. 1 some considerable time ago. However, it is clear that the representations made by the Data Protection Commissioner were very strong indeed. I have difficulty in recalling representations expressed in such very strong terms from anyone in that kind of position against a proposal from the Government. Clearly, the commissioner is worried about the conflict between the legislation on which her role is based and the proposals in the Bill.
  Following the response of the commissioner to the consultation exercise, I presume that discussions have taken place on this set of issues either with officials or, as I would have thought more likely, with Ministers. However, we do not find on the Marshalled List any government amendment to meet the serious concerns expressed by the commissioner. Therefore, it is quite probable—I shall leave on one side whether it is a 50 per cent probability or higher—or quite likely even, that the Act under which the commissioner holds her authority and the Bill now before the Committee are in conflict in various respects. The commissioner has set out the issues very cogently. Therefore, as there are always problems if there is a conflict between one piece of legislation and another, it is important that we should be clear whether, if such a conflict were to arise, does arise, is intended to arise or is likely to arise, the provisions of the Bill or the legislation providing the powers for the Data Protection Commissioner's operations will prevail.
  It is a reasonable precaution to ensure that in future we do not find the courts having a real problem in deciding which of two pieces of legislation is the more important. I beg to move.
  Earl Russell: I should be grateful for a little advice. At some stage we need to discuss the question of data protection. I had intended to do so during the debate on Clause 1 stand part. Would it be for the greater convenience of the Committee if we were to do so now and get it all over with in one debate?
  Baroness Hollis of Heigham: As long as the noble Earl does not repeat his remarks when we reach Clause 1 stand part.
  10 p.m.
  Earl Russell: That is agreed.
  We need to take into account the disincentive effect on people who may be thinking of depositing their data in a place where they may be looked at. We have seen this with the poll tax, the census and the electoral register. The Minister is well aware that the Government are interested in trying to persuade more people in receipt of benefit to make use of bank accounts in one form or another. It could well be that the prospect of having their data, which they have
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  deposited on an understanding of confidence, shared with government in one form or another may have a disincentive effect. That needs to be taken into account in our calculations.
  Under the Data Protection Act, we have a series of criteria which should be taken into account, on which I shall touch briefly. There is the question of transparency. When one gives data to a bank or other institution, an undertaking of confidentiality is agreed and one needs some understanding of exactly who will have access to that data. I appreciate that a later Act of Parliament can override an earlier duty of confidentiality. Proverbially, an Act of Parliament may do whatever it likes, but it does not follow that an Act of Parliament should do whatever it likes. If it does have such a deterrent effect, it may be worth considering how far it should go in doing that under the criterion of fairness.
  The Minister's comments on subsection (20(c) encourage me to say that there will be no need to spend nearly as long on it as I had first intended. However, we have here no additional penalties for the abuse of information. If we are thinking in terms of safeguards under the European Convention on Human Rights, the question of penalties for abuse of information for a purpose other than that for which it was collected is likely to be quite important. Before we are finished with the Bill, we may need to think of an amendment designed to meet that need. However, such an amendment would not be suited to amateur drafting, which is why I have not, at this stage, made arty attempt to advance one. If such an amendment were to be drafted, I should prefer to see it agreed through informal discussion outside the Chamber before it is brought before the Committee. Negotiations over the wording could become rather lengthy.
  Another general principle arises over the question of security. Abuse always takes place in one way or another. However, I made most of my remarks on that matter in the debate on Amendment No. 1 and I shall not return to it. I shall return to only one point on which I have not yet touched; namely, the danger inherent in collecting data on the wrong person. I understand that a serious piece of academic work argues that "Shakespeare" was not written by Shakespeare, but by someone else of the same name. A great many people share the same name as others. If the data produced refer to the wrong person, a great deal of misapprehension may result.
  Until very recently, I was not the only "Lord Russell" in this Chamber. The amount of his post which I received and the amount of my post which he received—in both cases that sometimes still happens—is very large indeed. The danger of a bank revealing that data about one of us in mistake for the other would be real. His grandfather and my father once wrote a joint letter to The Times saying, "Sir, we hereby wish to state that neither of us is the other". If no protection is in place against data being produced about the wrong person, a good many other people may wish to do exactly the same thing before the effect of the Bill is through.

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  The question of safeguards and the question of whether the action can be proved to be necessary are both subjects that I addressed in my remarks on Amendment No. 1. They need further thought, but for the moment I shall say no more about them.
  Lord Grabiner: This amendment gives rise to a classic "chicken-and-egg" debate. One should always be wary of such a debate because there may not be a solution readily to hand. The origin of the debate in this context lies in the second paragraph of Article 8 of the convention. That provides:
  "There shall be no interference by a public authority with the exercise of this right"—
  that is, the right to respect for a private life and so on, which is contained in the first paragraph—
  "except such as is in accordance with the law".
  The point about the Bill is that, if it were to become the law, that would be the law which permits the interference contemplated by paragraph 2 of Article 8. So the result will be that you have in place the Data Protection Act—which ultimately has its origins in these provisions in the human rights convention—and you have the Human Rights Act, both being statutes. In addition, you would then have this Act, if passed, which would be, on this hypothesis, the law.
  The practical consequence of this is that the powers under this new Act will have to be exercised in accordance with the requirements of the Data Protection Act, the Human Rights Act and this Act, if passed. I would therefore conclude that it is certainly not necessary to have the safeguards suggested by the noble Lord, Lord Higgins. At the end of the day, if the powers granted under this Act are not properly complied with, there will be a breach of the Data Protection Act. We certainly do not need a provision in this Bill—and ultimately in this Act—to confirm the fact that the Data Protection Act is binding and effective in accordance with its terms. That is why I respectfully suggest that the amendment is not necessary.
  Lord Higgins: I am sure that the noble Earl, Lord Russell, is right to say that it is sensible to clear up the data protection points at this stage of the proceedings. That is not to say that we will necessarily have dealt with all the human rights points, although the human rights aspect is part of the data protection argument. Some human rights points will arise later which we could more conveniently raise in detail on clause stand part—we have had detailed representations on the issue—but certainly let us get the Data Protection Act out of the way now.
  The noble Earl touched a sensitive point when he referred to confusion over names. I have suffered for many years through confusion with the Terrence Higgins Trust—although the Terrence is not spelt the same way. While it does excellent work, I am afraid it has over time caused considerable confusion—although I occasionally get contributions, which I duly pass on. It is a sensitive point. I have had to live with
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  it for a long while. He was, unfortunately, the second person to die of AIDS in this country and the trust was named after him.
  The noble Earl has rightly said that an Act of Parliament can, in one way, do whatever it likes. But clearly it would be undesirable to do something in one Act of Parliament which is in conflict or in dispute with another. I bear in mind the point made by the noble Lord, Lord Grabiner.
  Perhaps I may pose one question to the Minister, which she may be able to clarify. If I understood him correctly, the noble Lord seemed to be saying that so far as concerns the doubts about the Data Protection Commission and whether something is done in accordance with law—that if you pass this Act then whatever it says is in accordance with law—as I understand it, that is not the position so far as concerns the Human Rights Act. It has to be in accordance with law in a much broader sense. You cannot simply pass a piece of legislation and that makes it in accordance with law.
  It is an important point. We need to be clear whether there is any genuine conflict between what is now proposed by the Government and what is in the Data Protection Act. Perhaps the Minister can enlighten us.
  Baroness Hollis of Heigham: As to the question of mistaken identity, I was required to be "of Heigham"—which is my former ward in the city of Norwich—otherwise I was assured, very emphatically, by we all know who, that I would be confused with a certain Lord Holles, I think of the late 17th century—I look to the noble Earl, Lord Russell—who was both illegitimate and died of an unmentionable disease with no heirs. I was told that without being "of Heigham" I would certainly, and regularly, be receiving his correspondence.
  Earl Russell: If the Minister will forgive my interrupting her, as the other Lord "Holles" spelt his name with an "es", if our spelling had been up to it, the confusion would not have happened.
  Baroness Hollis of Heigham: However, if I am correct, he did get a bit of land near Oxford Street named after him. So there is life after death.
  The amendment seeks to place on the face of the Bill a requirement that,
  "Nothing in this Act shall authorise an inquiry which contravenes any provision of the Data Protection Act 1998".
  As my noble friend Lord Grabiner said, we have no intention of circumventing the Data Protection Act, even if we could. Schedule 1 to the Data Protection Act makes it clear that information can be disclosed where the person is authorised by any enactment to supply it. Should the Bill become law, organisations listed in proposed new subsection (2A) of Section 109B would be authorised to provide information to an authorised officer. These provisions would not therefore undermine the Data Protection Act.
  The department is under duties by virtue of the Data Protection Act. These either originate from provisions in the Act or from the information commissioner's

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  general duty to enforce good practice. We are under a duty to ensure that the information we obtain is information that we need. The Bill makes it clear that we can obtain information about a person only where it is legitimate to make him the subject of our inquiries, and the existing legislation into which these provisions would be placed makes clear that the information request must be "reasonable" in relation to explicitly set out purposes which relate to whether or not benefit is paid. Hence the noble Lord need have no fears that the Bill would allow us to obtain unnecessary information.
  We must also ensure that what can be done with personal information is transparent. To this end, we shall ensure that benefit claim forms inform people that the information they give us may be checked with other organisations.
  The DSS is also under a duty to tell a person what information we hold about that person, including what we have obtained from other organisations, if he or she makes a subject access request under the Data Protection Act. The only time we should not provide these details is when to do so would jeopardise an ongoing investigation.
  We have agreed to publish a code of practice before implementing these provisions. The code will ensure that people are aware of the detailed operation of the powers.
  In addition, information received from organisations included in the Bill can be passed on to third parties only in circumstances allowed for in the Data Protection Act. Unless we have statutory authority to divulge information, we may do so only if it would help prevent or detect crime. The reference, which was made by my noble friend Lord Grabiner, is to Section 29 of the Data Protection Act, which makes clear that that information may be divulged in those circumstances. In the debate on Amendment No. 1, I sought to make clear that benefit fraud is regarded as high-level fraud for these purposes. Any breach of the Data Protection Act's provisions regarding disclosure could leave an individual subject to criminal proceedings.
  I should mention also that the Data Protection Commissioner, or information commissioner as she is now known, could serve us with an enforcement notice if she felt that we had breached our duties under the Data Protection Act. The Data Protection Act is not breached by this Bill. It will govern the way in which we operate our powers under the Bill and is enforceable via an enforcement notice. There is a lot of protection in the system.
  The noble Earl, Lord Russell, thought that we needed additional penalties for the misuse of information. Existing legislation already provides very heavy penalties—and rightly so. For example, the Data Protection Act makes it an offence knowingly or recklessly to obtain or disclose information. It is subject to an unlimited fine in a Crown Court, so up to £5,00() in a magistrates' court. The Computer Misuse Act 1990 contains offences relating explicitly to the misuse of computers in order to obtain information.
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  These offences carry a maximum sentence of up to five years in prison. If the noble Earl believes that additional powers are necessary, over and beyond those, I shall be happy for him to write to me and we shall pursue the matter.
  I assure the Committee that my understanding is that the Bill will not infringe the Data Protection Act. The Data Protection Act will govern the way we operate our powers under this Bill. Should we trespass, then it is enforceable by an enforcement notice. With those assurances, I hope that the noble Lord will feel able to withdraw his amendment.
  10.15 p.m.
  Lord Higgins: I am grateful to the noble Baroness for such a reassuring response, although I shall need to study what she said. I have just one point requiring clarification. As I understand it, the noble Baroness said that, under the Data Protection Act, anyone drawing social security benefit could serve a form of notice—I have forgotten the Minister's exact form of words—requesting the department to reveal what information it holds on him. Presumably, that would cover the information already available if one wanted to know what one's credit rating was, and so on. But does that mean that an individual can ask to see absolutely everything that the department has obtained with regard to his personal affairs?
  Baroness Hollis of Heigham: I am awaiting confirmation on that point. However, my understanding is that anyone who is a benefit claimant can request the DSS to give him a copy of the information that is held under his name. Relying on my memory, I believe that we have had something like 20,000 such requests over the past few years. However, I may be wrong in that respect. It is certainly true to say that the power has been exercised occasionally. As with health records, it can be a useful way of ensuring that no mistakes have been made.
  Lord Higgins: I am most grateful to the noble Baroness for that explanation, which I find rather surprising. In the circumstances, I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Lord Higgins Lord Higgins moved Amendment No. 36:
  Page 2, line 44, at end insert—
  ("( ) No information in possession of any government department relating to any person who is the subject of an inquiry shall be conveyed or shared with any person or body as specified in subsection (2A) above.").
  The noble Lord said: In the course of a Bill as complicated as the one now before us one tends to develop one's own jargon as regards a particular issue. The jargon that I have attached to this set of amendments is "reciprocity". The main thrust of the Bill is to enable the DSS and local authorities to obtain information from the whole string of different organisations listed in the first part of Clause 1.

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  Sometimes the Government will be paying for the information but, more generally, they will not be paying for it.
  In the responses to the consultation document provided by various outside organisations there was a tendency to say, "If we give you the information, you ought to give us some information in return"; in other words, there would be a reciprocal arrangement. I referred to one such organisation at Second Reading. As I understand it there is an organisation called CIFAS, which operates in this field. I understand that the Government have no intention whatever that this should be so—that is to say, the credit rating agencies will not be able to say, "We'll tell you what is happening to this particular individual if you tell us something about his income tax return". This is an important point.
  In the response to the consultation there seemed to be some expectation that such a deal might be struck. Therefore, I thought it worth while to raise the point at this stage. I look forward to hearing the Minister's comments on my amendment. I beg to move.
  Baroness Hollis of Heigham: The noble Lord's amendment seeks to place limits on the information that the department—indeed, government in general—is able to give back to the organisations from which it has obtained information. That is a perfectly laudable aim and was presumably intended as a safeguard against the inappropriate exchange of personal information with the private sector.
  I take it that the noble Lord is seeking to ensure that we do not send information back, rather than that we do. Is that correct?
  Lord Higgins: Yes, I think so.
  Baroness Hollis of Heigham: I rather thought that this was another of the noble Lord's schizophrenic amendments.
  Either way, the amendment is unnecessary and would fail in its intended purposes. It is unnecessary because we have no plans to exchange sensitive information about people who may be the subject of an inquiry with information providers. I was trying to think of an example that might persuade the noble Lord. It could be of very real interest to a building society or a mortgage lender to know about someone's outgoings in terms of the number of children that he has to maintain. The number of children involved may not only be those in the immediate family; indeed, there might also be children who are known to the CSA in another family, or who were part of a relationship about which his current partner knows nothing. Clearly, that would be very sensitive information which it would be highly inappropriate to send back, even though the mortgage lending company might think it germane to its inquiries. That would be extremely offensive in terms of any concept of privacy and the right of people to expect the DSS to protect sensitive information.
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  We are taking steps to ensure that such information does not find its way back to the private sector. We have already had the discussion about not leaving footprints behind with credit reference agencies. However, we know that fraudsters do not respect organisational boundaries and that the people who commit fraud against the benefit system may well try to commit it against the private sector or other organisations in the public sector.
  While trying to ring fence sensitive information which it would be inappropriate to disclose, we are trying to be helpful—as I say, we have had this debate—about giving information that is non-sensitive and non-personal. I gave the example of giving information about someone who was already dead. However, the noble Lord will be aware that our inquiries may at any time uncover fraud against one or more of the organisations that we seek information from. The effect of his amendment would be to prevent us informing a company that it is the victim of fraud and that we had information that might help put a stop to it. The exemption that allows us to pass on information about criminal acts is contained in that self-same Section 29 of the Data Protection Act and in common law.
  In fact, the amendment goes further than that. It would also prevent any other government department from passing on such information. For example, if we made inquiries about a person suspected of benefit fraud, we would effectively prevent the Inland Revenue from informing a bank about its suspicions of his involvement in mortgage fraud. Perversely, the amendment would not apply to people about whom we have not sought information. What I am trying to say to the noble Lord is that it is rather a bad amendment on all possible grounds. We shall not exchange personal information about people whether they are the subject of our inquiries or not, except in the circumstances covered by Section 29 that I have described. I hope that in the light of those comments the noble Lord will wish to withdraw his amendment.
  Lord Higgins: I am grateful to the noble Baroness. I do not think that the amendment covers the point she made about transferring information from the DSS to the Inland Revenue as it is not specified in subsection (2A). One can see that there may well be a case for exchanging information within government. I shall need to consider the other points which the noble Baroness made as regards people who are dead. Obviously if a pension is continuing to be drawn when the person whose life was insured has departed, it may be appropriate to inform the pensions department of that. However, that raises issues as regards how far that measure will extend. What prompted the amendment with all its faults was the suggestion in a representation, which I believe came from CIFAS, that it would do a deal; that is, it would give information to the Government if the Government

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  would give it information. I understood that that was not something that the Government would go along with. Perhaps the Minister will confirm that.
  Baroness Hollis of Heigham: A number of financial organisations would dearly like to have additional information held by the DSS. I was not clear whether the noble Lord argued that they should or should not have that. They will not get it. However, we are considering whether we can release to them non-sensitive, non-personal information, for example, address verifications or verifications of deaths, which are obviously relevant to companies paying out insurance policies. These organisations have asked us about stolen/blank death, birth, marriage certificates and bogus national insurance numbers. We are considering those matters and we are talking with organisations to see whether we can be helpful in a common activity against fraud without in any sense endangering someone's right to privacy in terms of the sensitive information we hold.
  I do not know whether that reply helps the noble Lord. However, we shall not give the private sector any information about a claimant's benefit details. However, as I say, we are considering some of the other more neutral areas such as information on national insurance numbers or checking whether someone has died and therefore whether an annuity should not continue to be paid. We are considering whether that information could usefully be made available. Perhaps, after all, we are on the same side; namely, that we do not wish to see sensitive information going round the system out there in the private sector. Equally, if in non-sensitive areas we can help in checking fraud, we shall do so.
  Lord Higgins: Let me be clear. I am not in favour of reciprocity in the way I described. The Minister said that there may be occasions where information would be transferred which was not sensitive and personal. Clearly, the information would be personal because it relates to an individual. What is sensitive is a matter of judgment.
  It has been helpful to have the discussion. We shall need to consider what the Minister said. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  The Deputy Chairman of Committees (Viscount Simon): Before calling Amendment No. 37 I have to advise the Committee that if it is agreed to, I cannot call Amendment No. 38 or 39 due to pre-emption.
  [Amendment No. 37 not moved.]
  Lord Grabiner Lord Grabiner moved Amendment No. 38:
  Page 2, line 45, after ("(2B)") insert ("or (2C)").
  The noble Lord said: We have already debated the amendment in the context of Amendments Nos. 20 and 22. I beg to move.
  On Question, amendment agreed to.
  Lord Grabiner Lord Grabiner moved Amendment No. 39:
  Page 2, line 46, leave out from ("officer") to ("whose").
  The noble Lord said: I tabled the amendment in order to raise a question. As presently drafted, the power which would be granted by the Bill in new subsection (2D) is concerned with information to be obtained from utility providers. The intention is to give that power only to an authorised officer who is an official of a government department.
  My amendment would not limit the power to the government department official. It would enable an authorised officer appointed by a local authority to have these powers.
  My concern is that both housing benefit and council tax benefit are administered by local authorities and I do not understand why this power should not be provided to local authorities as well. The relevant safeguards are already in the Bill. First, the power could be exercised only by an authorised officer; and, secondly, the limited subject matter of the power—namely, whether or not gas, water or electricity is consumed at identified premises—is hardly earth shattering in data protection terms. It is low grade information. I beg to move.
  Earl Russell: I like the policy intention underlying the amendment. I wonder whether the amendment is the best way to achieve it. If we have the amendment in this form, we do not only authorise local government—I think that there is quite a strong case for that—we shall also allow authorisation of a wide variety of people who might be acting on the Government's behalf, those possibly in the private security industry. That could raise questions about which we might be less happy. If that is an unnecessary worry, I shall be happy to be told so.
  Lord Grabiner: I understand that the expression "authorised officer" is elsewhere defined in the master legislation into which these provisions would go. I do not think that it would extend as far as the noble Earl suggests. I should have to be advised about that, but I believe that to be the position.
  Baroness Hollis of Heigham: My noble friend is right in his reply but it does not make me like his amendment any the more.
  The amendment would remove the requirement that in order to obtain information about consumption from a utility company the authorised officer should be an official of a government department. This in effect opens up the use of the power to local authority officers.
  The way that we envisage the information that we receive from utility companies being handled means that this extension of the power to local authority investigators is unnecessary. We do not intend—I do not think that it would be reasonable—that investigators at local level, whether employed by the DSS or local authorities, would approach utility companies to obtain bulk information about consumption. They will, of course, be able to use the

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  powers in new subsection (2A) to get information about individuals where they have ground for doing so. But what this power is about is getting bulk information for matching against our social security records. We shall do this through our data matching service based in the North West. It should be necessary only for authorised officers carrying out this data matching to use the power.
  Local authorities will be a major beneficiary of the results of these data matches as they are expected to reveal residency fraud which is a major concern as regards housing benefit. But they will not have to extract the data from the utilities themselves. We will do it for them through our existing housing benefit matching information service.
  I hope that that explanation satisfies my noble friend's concern and that he will feel able to withdraw his amendment.
  10.30 p.m.
  Lord Grabiner: At this hour of the night it would be entirely inappropriate for me to have cross words with my noble friend. We can have this discussion elsewhere. In those circumstances, I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Earl Russell Earl Russell moved Amendment No. 40:
  Page 3, line 20, at end insert—
  ("(2F) Nothing in this Act shall be construed as conveying a right to use information gained under this Act for any purpose other than that of detecting social security fraud, or to communicate such information to anyone not otherwise authorised to receive it."").
  The noble Earl said: I do not know to what extent the amendment may be necessary. I look forward to the Minister's remarks on that. However, it contains a principle that needs to be asserted. Under the general principle of the need for safeguards, information that is gathered under the powers of the Bill should be confined to the purposes for which its collection has been authorised. Information is like an oil slick—it has a remarkable habit of spreading into all sorts of places where it is not wanted. The Bill creates a formidable machine for information-gathering. We need to make provision to ensure that that machine shall not be driven on the pavement.
  I do not know in what ways the amendment might or might not be necessary. I look forward to enlightenment on that. Even if it is not formally necessary, we should bear in mind that to some extent legislation has a hortatory effect. It is read. Not everybody who reads the Bill will have listened to the Minister's excellent replies on Amendment No. 35. Not everybody will know about the security provided in the Data Protection Act. The public reaction to the Bill might be more favourable with the restriction spelled out than without. The consent of the public to the existence of such sweeping powers will be a large
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  part of their effectiveness. The department might be wise to bear that in mind. In hope of the Minister's answer, I beg to move.
  Baroness Hollis of Heigham: I understand where the noble Earl is coming from. I shall seek to allay his fears.
  The aim of the amendment is to prevent the DSS and local authorities using information obtained under the Bill for purposes other than detecting social security fraud and to prevent us disclosing it to people not authorised to receive it.
  Clause 1 sets out the circumstances in which we could require information about an individual and about the quantity of utilities supplied to addresses. The information that we obtain under those powers may not be used for any other purpose unless there is a statutory provision allowing for that.
  I shall explain the ways in which the law allows us to use such information. We took powers in the Social Security Act 1998 to allow us to use any information that we obtained for any other purpose connected with functions in relation to social security, child support or war pensions. Obtaining accurate information can sometimes be a time-consuming exercise. Claimants and groups that work with them, such as CABs, tell us that they want to be able to interact with the department in a much more convenient way. They want to provide information only once. They want a correct and reliable spine of information to be available—an architecture on which the benefits system can be built. They expect one area of the department to know what they have told another. The exasperated claims that I hear from people who have told the CSA one thing, but we have not passed it on to the Benefits Agency when they believe that we should have done, are evidence of that.
  Through initiatives such as the ONE pilots, we are demonstrating our commitment to trying to produce a client-centred rather than a benefit-centred approach. However, that would fall at the first hurdle if we could not pass information throughout the social security system. It is also important from the cost point of view to be able to obtain information only once.
  It is important that the information that we obtain under the Bill can be used for any social security purpose. For example, if we obtained information from a bank that a claimant had considerable savings, not only would we stop that person claiming benefit, we would also wish to re-examine his child support arrangements to ensure that he was meeting his responsibilities in maintaining his children. We would not expect the Child Support Agency accidentally to find that person and discover that he was failing to declare his income to that agency, too.
  The principle of using information efficiently and effectively is a government-wide issue. Should any information held by the DSS assist other departments to perform their functions more effectively, we should be able to share that information.

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  Statutory powers allow us to provide information to the Department for Education and Employment, Customs & Excise, the Inland Revenue, the Home Office and the Lord Chancellor's Department. Those powers clearly set out the purposes for which information may be transferred; in other words, they are highly transparent. For example, legislation in the Jobseekers Act 1995 enables the DSS to share information with the Department for Education and Employment which determines a person's availability for work. Should we obtain information that a person is studying full-time, that would affect his or her availability for work and we may need to share that information with the DfEE.
  Finally, the DSS, like any other organisation, can provide information to other organisations where that helps to prevent and detect crime. On that point, we return to Section 29 of the Data Protection Act. Therefore, in highly specific circumstances we may be in a position to provide information to the police.
  Local authorities also need to share some information to help to prevent fraud in housing and council tax benefits. Therefore, social security legislation allows local authorities to share housing benefit and council tax benefit information with each other and with the DSS.
  The Committee will be interested to know how long the department retains information for such purposes. It is normally held for approximately 18 months, but that period could be extended in the case of an ongoing action. From July, the retention period will be reduced to 14 months. We are not talking about a vague data bank which is held in perpetuity.
  Members of the Committee have expressed concerns that information obtained under the powers could be disclosed inappropriately where no legislation existed to allow the disclosure. Perhaps I may reassure the Committee that we are experienced in holding DSS information securely. That point arose in our discussions on an earlier amendment.
  We have already produced a detailed protection of customer information guide. That sets out clearly the legislation which governs the protection of information and the disciplinary and legal consequences for staff who fail to act properly. Again, that is a subject on which I have already touched. It also provides guidance on such matters as what should be considered when making a decision about whether to disclose information—for example, whether the disclosure is necessary and whether legislation permits it—and what information should be recorded about the disclosure.
  That guide is published on the DSS internet site. Staff who do not follow the guidance are subject to disciplinary procedures and, where appropriate, will he prosecuted under Section 123 of the Social Security Administration Act 1992. That section provides for an offence of unlawfully disclosing information obtained during social security administration. It is punishable by a prison sentence of up to two years, and so on. Safeguards are also provided under the Data Protection Act and the Computer Misuse Act. The
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  existing provisions ensure that those who disclose information unlawfully can be punished. They provide a deterrent.
  I wish to make one other point. It may not have been the noble Lord's intent, but the effect of the amendment would be to amend at a sweep all the provisions of the Social Security Administration Act 1992. That is the main legislation governing the administration of benefit. Therefore, we would be prevented from obtaining any information under its provisions for any purpose other than detecting social security fraud. That would prevent us, for example, collecting any information on the basis of which we could pay benefit to claimants. Therefore, this is not only, so to speak, an amendment which wrecks the Bill but an amendment which wrecks the entire social security system in one fell swoop.
  We would look to maximise the use of any information which we obtain, as the public and business rightly expect. Should information be useful for other social security purposes, we would use it within the framework of the law. In order to maximise efficiency, we would, where appropriate, also make available to other departments information which was useful to them, but, again, only where the law allowed us to do so. We have strong guidance which governs the disclosure of information, and strong safeguards to prevent disclosure which is not allowed for by law.
  Therefore, I hope that the noble Earl, Lord Russell, will agree that we should not expect a person to submit separate pieces of information when he may be receiving housing benefit, council tax benefit, income support, child support, and so on, and possibly disability benefit as well. Asking him to repeat the same information five, six or seven times over with the possibility of error, which would lead to the information being thrown out by data-matching, is not something that we should contemplate lightly. Against that background, I hope that the noble Earl will feel able to withdraw his amendment.
  Throughout, my emphasis has been that any exchange or passing on of such information must be transparent. That is within the framework of the law. The information which we seek to obtain will be used for the purpose of prosecuting fraud. I believe that that is a matter of common ground between us.
  Earl Russell: The Minister reminds me of an incident that took place in this House in 1641 during the prosecution of the Earl of Strafford. He was asked by prosecuting counsel, "Is the noble Earl arguing whether this kingdom be this kingdom?". The Minister is telling me that this Bill is not this Bill. That alone would have prevented me from pressing the amendment further tonight had I been minded to do so, which I am not.
  The Minister makes a very persuasive case about conveying data from one place to another, especially with regard to the CSA and the Benefits Agency. The number of cases about which I have heard in which mothers were left without income because their

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  maintenance stopped but their benefits did not kick in is legion. That alone would be enough to require us to consider the matter seriously.
  I confess that the Minister has not entirely allayed my concerns about this matter. She invoked the Data Protection Act 1998—I had wondered whether she would. I remember our debates on that legislation during its passage through the House—I participated in them. I felt the same uneasy and hesitant misgivings about that legislation that I feel about the Bill. I could see a strong case in favour of it but strong grounds to be hesitant about it. That view was shared by the citizens advice bureaux, whose name the Minister invoked. She will remember the briefs that it submitted on the 1998 Act. In the end, after a great deal of hesitation, I decided that I was prepared to accept the Bill that became the 1998 Act as the lesser of two evils, roughly along the lines of our debate on Clause 1. However, I did not know then that the 1998 Act would have a ratchet effect—it will be used together with the powers conferred on it in the present Bill. A salami-slicing process is involved, which increases the powers of the executive. If that is to continue in future legislation, it could cause considerable misgivings. By invoking the 1998 Act and recalling my hesitations about it, the Minister made me wonder whether I was right to let it go through as freely as I did. That may slightly damage the case that she wanted to achieve.
  I am prepared to consider some variation of the amendment for future use. I should be happy to discuss whether there is any prospect of doing so constructively, which there may be.
  The Minister said that the data cannot be used for any other purpose unless an Act of Parliament provides otherwise. There would be real propaganda advantages in terms of public reaction in having a restriction even as limited as that spelt out in the Bill. That would mean that anything that involved communicating the data in the future would have to come before Parliament. It could also possibly be useful with regard to the ECHR charter and the argument about safeguards.
  The Minister will not necessarily want to discuss that question across the Committee tonight, but I should he very grateful if we could discuss it in future. Meanwhile, I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  [Amendment No. 41 not moved.]
  10.45 p.m.
  Lord Goodhart Lord Goodhart moved Amendment No. 42:
  Page 3, line 23, at beginning insert ("subject to subsection (6A) below,").
  The noble Lord said: In moving Amendment No. 42, I shall speak also to Amendment No. 44.
  The amendments were motivated to a large extent by the serious concerns of the Delegated Powers and Deregulation Committee about the width of the power in proposed new subsection (6)(a) of what is Section 109B of the Administration Act. That proposed new
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  subsection will allow the Government by order to add any person without any qualification to the list of persons from whom information can be demanded.
  I see a case for allowing some possibility of developing new methods of electronic communication. One thinks perhaps of a replacement of the Student Loans Company or of bodies similar to those now included in subsection (2A) from which it would be appropriate to obtain information. It may be undesirable that that should require primary legislation each time a change is made. But at the same time, the power could clearly be exercised by order so as to include those who are plainly unsuitable as persons from whom information could be required.
  Those now listed in subsection (2A) are people who obtain what might be called routine information in the course of their business or undertakings. For example, utility bills identify whether or not somebody is a student at an educational establishment, and so forth. But it is plainly not limited to that. In our view, it is desirable that there should be certain exclusions from the list of people who could be added. In particular, we are concerned with those people to whom the subject of the inquiry has gone to obtain advice or professional information. That includes the legal professional privilege. No doubt if that legal professional privilege stood alone, the information could not be ordered to be disclosed because to do so would be a breach of the Human Rights Act.
  But the amendment goes considerably wider than that. It would cover information received from citizens advice bureaux or other advice agencies, and advice provided by them by people who were not lawyers, and so legal professional privilege could not be obtained. In those circumstances the restriction imposed by Amendments Nos. 42 and 44 is one that will cause no harm to the purposes of this Bill, but will be a reasonable and proper protection for those who seek and provide information in the course of seeking advice. I beg to move.
  Lord Astor of Hever: I support Amendments Nos. 42 and 44. The safeguard to protect individuals so eloquently suggested by the noble Lord, Lord Goodhart, seems eminently sensible and I agree with him that it will cause no harm to the Bill.
  Baroness Hollis of Heigham: This issue was raised perfectly properly at Second Reading. The amendment seeks to prevent us adding those who provide advice or professional assistance to the list of organisations that could be required to provide information. In particular, the noble Lord had in mind lawyers and members of the CAB.
  I have already stated that we shall not add lawyers to the list of organisations which could be required to provide information. I also made it clear at Second Reading that in the same way we shall not be adding CAB. We have not sought to make such groups exempt from the provisions of the Bill because it is not necessary to do so. The order-making power to extend the list of organisations that can be required to provide information is subject to the affirmative procedure.

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  Parliament would thus have the opportunity to consider whether any new proposals were an appropriate use of the power
  This amendment may go further than providing such protection. "Advice" is a rather wide term and could cover, for example, the advice given by a building society in response to a mortgage application. We would not want to be prevented obtaining information about a property that someone had failed to declare when making a claim for benefit. In light of the substantive point that to add professional or confidential advice to the list of organisations would require the affirmative parliamentary procedure, perhaps the noble Lord, Lord Goodhart, will feel able to withdraw the amendment.
  Lord Goodhart: I am grateful to the Minister. I think that we have a problem here. The Minister stated that the Government have no intention of extending subsection (2A) to CABs or similar bodies. Nevertheless, that is not covered by Pepper v Hart. The declaration has no binding effect and in no way binds any future government. In those circumstances I am not altogether happy with the fact that there is no restriction of any kind. It may be possible to draft something which is more satisfactory to the Government which achieves the object we seek. However, we shall consider the matter. We may return to it at a later date.
  Baroness Hollis of Heigham: Perhaps I may ask the noble Lord why he is not content with the affirmative procedure, which seems to me to be a high degree of parliamentary scrutiny and should surely abate his fears.
  Lord Goodhart: [f something is plainly undesirable—I believe that information which is obtained by somebody who goes confidentially to obtain advice should not be subject to disclosure under the Bill—it is better to exclude it on the face of the Bill rather than to say that it will be covered by the affirmative procedure. Equally, one could say that it does not matter if the procedure is negative because it can always be prayed against. If, plainly, it should not be the subject of an order and can reasonably well be defined, it should be on the face of the Bill and not in secondary legislation. Having said that, it is not my intention to press the matter tonight. I shall ask the leave of the House to withdraw the amendment. However, before I do that, I believe that my noble friend wishes to speak.
  Earl Russell: I am grateful to my noble friend. Before we finish with this, I have a further answer to the Minister's point about the affirmative resolution. She should have been expecting it; I have made it many times before. It is only an adequate assurance if it is regularly accepted that it is the normal practice of the House to vote on statutory instruments. We are in a state of suspense on that at the moment. It is accepted in large parts of the House that we do so. At present it is done only on high days and holy days, which means
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  that there is a limited amount of control, but not as much as there is through a Bill. I do not know what the attitude of the Labour Party might be on this matter were it to find itself again in opposition. One takes it for granted that every government deplores voting on regulations and always will. But what its attitude might be in opposition, should that happen, would be material. I do not know whether the Minister has anything to add. There are two questions here: scrutiny and control. The affirmative procedure gives scrutiny; it is only if it also gives control that it is an acceptable answer to this sort of concern.
  Baroness Hollis of Heigham: I do not want to go into a debate which this Chamber has enjoyed many times. The affirmative procedure gives this House scrutiny; it gives the other House control. The problem I have always had with the position of the noble Earl on the right to vote down affirmative orders in this House—I speak as an individual at least as much as a member of the Government—is that I do not think it right that this House should have equal power with the elected Chamber to block secondary legislation. That is where I stand. That would mean that the elected Chamber could pass an affirmative order or agree it and, by voting it down, we could block the will of the other House prevailing. That is where my problems lie. I do not believe that a secondary chamber, especially as we are not an elected secondary chamber, has any authority or legitimacy to do that.
  Earl Russell: My problem with that is that equal power with another place to control the Government is no power whatever. Unless they are controlled here they are controlled nowhere.
  Baroness Hollis of Heigham: That will remain the difference between us.
  Lord Goodhart: I am sorry that we do not have time to pursue that issue, which is extremely interesting and important. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  [Amendments Nos. 43 to 45 not moved.]
  On Question, Whether Clause 1, as amended, shall stand part of the Bill?
  Lord Higgins: When we began debating the Bill—it seems a long time ago—I said that two themes would run through it. One was data protection and the other was human rights. There is some relationship between the two but, as I have said at various stages, it seems to me appropriate to deal with the second issue on the Question whether the clause shall stand part.
  Although we have touched on the human rights issue in various amendments, we have not considered other detailed points. I believe that it would be appropriate to do so now but I do not intend to raise other matters which we have considered comprehensively when debating individual amendments.

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  It is important to deal with the matter because under the present arrangements the Minister responsible for the Bill is obliged to give an assurance. That appears on the first page of the Bill. Under the heading "EUROPEAN CONVENTION ON HUMAN RIGHTS", we see the statement:
  "The Baroness Hollis of Heigham has made the following statement under section 19(1)(a): In my view the provisions of the Social Security Fraud Bill [H.L.] are compatible with the Convention rights".
  I have two initial questions to ask about that. It is stated that the Bill is
  "compatible with the Convention rights"
  rather than with the implementing legislation which we have subsequently and rather dramatically passed. Perhaps the Minister would clarify why that is done in terms of the treaty rights rather than the domestic rights.
  Secondly, we are still unclear about the level at which the advice, no doubt advice on which the Minister made her statement, is being given. We do not know whether it comes from within the department, from the Law Officers, from the Foreign Office lawyers or whoever? It is relevant in the context of this Bill because Members of the Committee will have received a notice from Justice setting out a number of problems with the Bill. We must consider whether the advice which the Minister is receiving is likely to be of equal quality or weight to that embodied in the representations made to us by Justice. It would be helpful to know how expert are those advising the noble Baroness.
  Justice, in its recommendations, is very clear. It states:
  "The extent of the intrusions into privacy rights, sanctioned by the Bill as presently drafted, is unlikely to be justifiable under Article 8 of the convention. In the light of this, the statement of compatibility made in respect of the Bill under Section 19(1)(a) of the Human Rights Act may need to be reconsidered".
  That is an important statement.
  It is the case that had we accepted Amendment No. 1 much of the doubt expressed by the representations we have received would have been put at rest. Paragraph 15 of the note points out that a minimum safeguard Justice considers fair should be prior judicial authorisation for the compulsory acquisition of information in each particular case. It goes on to cite Klaus v Germany in the European Court of Human Rights to that effect.
  However, the Committee has not accepted Amendment No. 1. That raises the question whether the doubts which have been expressed in this respect are valid, and the dangers if they are not. I am not sure what the consequences will be if they are not. Irrespective of whether that will be resolved by the Human Rights Act being invoked or the European Court of Human Rights, at all events it lends strength to the argument that Amendment No. 1 is important and should be reconsidered on Report.
  Having said that, a number of the comments made by the Minister this evening lead one to believe that some of the complaints about the Bill as it now stands
  926
  may not in the event turn out to be a problem. We spent some time debating the question of whether something is likely to be a contravention of social security law. I believe that it was implied that the Minister would look at it and perhaps clear up that particular point. The other remarks related to subsection (2C)(c). The suggestion that that matter will be eliminated by Amendment No. 32, or something like it, also helps to reassure those who are concerned about the position under the convention.
  Another important point is the report of the Select Committee on Delegated Powers and Deregulation which expresses concerns, which are reflected in the recommendations of Justice, about whether the order-making powers are too great. The Select Committee suggested that various assurances might be given with regard to the uses of the powers in Clause 6(8) and (10).
  11 p.m.
  Baroness Hollis of Heigham: Has the noble Lord had access to the sixth report of the Delegated Powers and Deregulation Committee. That is the committee's response to the Government's response to the fifth report. If so, the noble Lord will see that the committee says that the Government have responded constructively and satisfactorily.
  Lord Higgins: In that case, I take the point. If so, is it the case that the assurances have been comprehensively put together and laid before the House as a clear package, as the Select Committee recommended?
  Baroness Hollis of Heigham: Yes.
  Lord Higgins: Obviously, I accept what the Minister says on that point. None the less, we shall need to consider carefully at later stages of the Bill the extent to which the provisions of the Bill are compatible with the convention; in particular, whether the various provisions of subsection (2C) are proportionate to the requirements of the legislation and sufficiently specific. However, in that respect the point made by the noble Lord, Lord Grabiner, about making the provision relate to a particular individual may be helpful. Other than that, I believe that it would be helpful to have the Minister's comments on the points that I raise.
  Lord Goodhart: I rise only because the noble Lord's reference to Justice reminds me that earlier I should have made a declaration of interest. I am a vice-chairman of the council of Justice. As an officer of that organisation, it is right that I declare that interest.
  Lord Grabiner: I shall be very brief. The reason for brevity, apart from the fact that it is my natural inclination, is that I believe that the debate which may otherwise result from the notice of intention to oppose the Question that Clause 1 stand part of the Bill will be much more fruitful when the Committee sees the wording of the Bill in the light of amendments accepted thus far and the amendments which the

  927
  Committee anticipates will be tabled by my noble friend. So I do not propose at this hour to devote time to discussing the specific point, save to pick up two matters.
  The noble Lord drew attention to the language of the endorsement on the face of the Bill. My understanding is that that is in absolutely standard form and is entirely consistent with the requirements of Section 19(1)(a) of the Human Rights Act, a provision to which the noble Lord specifically referred. That is precisely what the endorsement says. The meaning of convention rights is defined in Section 1 of the 1998 Act as encompassing the relevant provisions of the articles of the convention and the relevant articles of the first and sixth protocols as read with Articles 16 to 18 of the convention. It is in standard form.
  I, too, should disclose a position in Justice. It is not as dignified as that of my noble friend; I am a mere council member. But I want to enter a note of caution in this discussion. Every person has a view about whether or not what we are discussing and the kinds of matters we have been discussing today are compatible with the European Convention on Human Rights. The mere fact that someone, however distinguished, from whatever organisation, however outstanding and wonderful, expresses a view about these matters should be taken careful account of.
  But at the end of the day these are essentially judgmental matters. They are about reasonableness, fairness and common sense. Part of the process involves the debate that we have been having today. My own view, for what it is worth, is that what we have been discussing and what we have so far been agreeing to has all been in accordance with the requirements of the convention and compatible with it. If I felt that it was not, I would not have gone along with it. But I think that that discussion would be much more fruitfully had in the light of a clearer and cleaner version of Clause 1.
  Baroness Hollis of Heigham: I know that this is a debate on Clause I stand part but I do not intend to tire the Committee by reviewing what we have discussed and established so far. I shall be extremely brief—the more so as my noble friend Lord Grabiner has addressed much better than I could the human rights issues raised by the noble Lord, Lord Higgins.
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  The Bill is a balance. It is about powers to obtain information that we need in order to safeguard taxpayers' money against fraud, but it limits those powers to inquiries that we believe are reasonable. Elsewhere, there are safeguards against the unauthorised obtaining and disclosure of information. I have also outlined what amounts in my view to a comprehensive system of administrative safeguard.
  To come to the point which is at the core of the concerns of the noble Lord, Lord Higgins, we have no doubt that these measures are both necessary and proportionate to the problem. We are confident that they comply with the European Convention on Human Rights and data protection legislation. They are measures which uphold people's rights while providing us with the powers we need to check for cheats.
  The noble Lord, Lord Higgins, asked about the status of legal advice. My advice comes from department lawyers and from Foreign and Commonwealth Office lawyers. My advice has been that the Government's position and these provisions are compatible with convention rights. We could, as my noble friend Lord Grabiner said, argue about whose lawyer knows better. But I do think that the core of the concerns which gave rise to issues about human rights were largely associated with new subsection (2C)(c).
  I shall do my best to come back with wording that might satisfy your Lordships and look at the repercussions and read-across. In the light of that, I am confident that what I have signed remains correct. I took it on sound legal advice and I have every reason to believe that the Bill properly balances the pursuit of fraud while protecting the human rights and the rights of individuals appropriately to privacy where their privacy is not a shelter against serious fraud. In the light of that, I hope that the noble Lord will allow Clause 1 to stand part of the Bill.
  Clause 1, as amended, agreed to.
  Baroness Amos: I beg to move that the House do now resume.
  Moved accordingly, and, on Question, Motion agreed to.
  House resumed.
  House adjourned at eleven minutes past eleven o'clock.