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Mr. Webb: The Government certainly can get information from the private sector to establish whether a person is committing benefit fraud, if there are reasonable grounds for that suspicion. Under the Bill, authorised officers of the Benefits Agency may obtain that information to verify--or otherwise--any suspicion that they might have about a claim. Under the new clause, authorised officers would not use information gained in that way only for internal purposes, but would pass it on to interested external organisations. Those organisations could not initiate the transfer of information, as they would not know that there was a suspicion of fraud.

I shall not drag this matter out. If a person has been successfully prosecuted, there might be a case for alerting other organisations to the fact. However, I am worried about alerting other organisations before anything is proved, especially if the person involved is found to be innocent in the end. I believe that private information given to the state should remain private, unless there is a good reason why it should not, and that suspicion is not a good enough reason. That is where I would draw the line.

4.30 pm

I mention in passing that in a written answer earlier this week the Minister of State told me that 15 per cent. of benefit recipients will not have their money paid into a

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bank account even when the Government have finished the move to automated credit transfer. The Government's target is 85 per cent., not 100 per cent. Therefore, one in six benefit recipients will still not be subject to the sort of checks to which the Minister referred. It will not be universal that, in applying for a benefit, one is subject to all those checks. For a certain category of person, there would be additional checks, beyond those that they face at present.

While I understand the view of the private sector that the traffic is one way, the role of the public sector is special. The relationship between the individual and the state is different from that between the individual and the private sector. The information that we provide to the state should be treated with respect and privacy. For that reason, I cannot support the new clause.

Mr. Rooker: First, I shall respond to the hon. Member for Northavon (Mr. Webb), without the benefit of my written notes. The Government's objective is to pay all benefits by automated credit transfer. My written answer made it clear that in our public service agreement, by which we will be measured by 2005, the initial hurdle is 85 per cent. That does not mean that we will stop there, or that we expect to achieve only 85 per cent. Our objective will be to achieve more, but at that point in time the public service agreement that the Department has with the Treasury is to meet that benchmark. The transfer is taking place between 2003 and 2005 and it would be unreasonable to expect us to achieve 100 per cent. by 2005 in terms of that agreement. I do not want people to run away with the idea that we are writing off 15 per cent. of benefit claimants as regards ACT--far from it.

My right hon. Friend the Member for Birkenhead (Mr. Field) will know from what I said on Second Reading and in Committee that, by and large, we are sympathetic to sharing information that we are able to share with the private sector to do a better job to help both sectors root out fraud. Fraud in the private sector is as bad as fraud in the public sector and it is important that the two sectors work in partnership.

The Government are taking statutory powers in the Bill to obtain information from the private sector. We cannot reciprocate by being members of CIFAS--the credit industry fraud avoidance system--for reasons that I have explained. I am not sure whether we could get the legal authority of the House to join CIFAS in a clause with the wording in my right hon. Friend's new clause 2.

The clause would give the Department carte blanche to release any information that it holds about claimants who are convicted or reasonably suspected of fraud. There is no restriction. Obviously, there has been correspondence and there have been parliamentary questions on the matter since the Bill was put before the House. I shall reiterate some of the issues and refer to the annual meeting of CIFAS, which has been mentioned.

We are constantly examining the data that may be released to the private sector and we are holding--and have held--discussions with that sector. However, there are legal considerations. I listened to the exchange between my right hon. Friend the Member for Birkenhead and the hon. Member for Northavon. We need to distinguish between the bulk transfer of information and giving information on a case-by-case basis. Different rules apply, as will be apparent from my remarks. It is important to take on board that distinction.

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We have never envisaged a complete exchange of information. The Department's legal advice remains that making entitlement to benefits conditional on claimants consenting to the release of their personal data would not constitute genuine consent because there is nowhere else to get the benefits if one does not consent and, therefore, we would have real trouble with the principles of the Data Protection Act 1998, let alone human rights legislation. Claimants have no choice but to claim from the Department of Social Security.

We are trying to be helpful: by sharing with the private sector information that would be useful to it, but also by protecting information gathered about people who have no choice but to use the DSS. We have to strike a balance--the Bill is the striking of that balance. It is a modest step--although it could be seen as a major encroachment in some ways, so we are being extremely careful about its content. There will be no fishing expeditions and reasonable grounds will have to be given if it is thought that fraud might be being committed. That is crucial. All those checks and balances have been included, so in this Bill the new clause would be a step much, much too far.

We have to protect individuals and we want to assist the private sector. We take our data protection responsibilities very seriously indeed. We are discussing with the financial sector what information we can divulge without breaching those responsibilities. For example, we have been considering items such as information on people who have died. That is a matter of public record; if we have the information, we have stopped paying their pension. Sometimes the private sector does not know that a person has died and carries on paying an occupational pension, in which case fraud is obviously committed by other people.

We are looking at whether we can help with the verification of addresses when the DSS requires people to open a bank account. Information on stolen blank birth, marriage and death certificates is also under consideration, as are details of people convicted under the "two strikes" provisions. That matter was raised in Committee and we may debate it briefly later on.

The provisions are a deterrent that will not affect more than 500 people a year. "Two strikes" mean convictions in a court of law--in a public place; the proceedings are not secret and are not held behind closed doors, yet according to the legal advice that I have received, it is not currently possible for the DSS, which would know the names and addresses of the 500 people affected by "Two strikes and you're out", to pass that information to the private sector. That would not be possible and we have legal advice to that effect, yet the information is clearly in the public sector--diffused around the country--in various courts. However, the mere act of the DSS gathering such information and handing it over to a third party breaches the legal framework under which we operate and we are, therefore, still holding discussions on that.

We expect and hope to resolve outstanding legal and operational issues about information that we can share with the private sector by the end of this month--so the matter should not be dragged out. We do not want to drag it out because there is no incentive to do so. In any case, we need the good will of the private sector, even though we are taking statutory powers. Where we have the legal

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authority to share information, we want to do so. Thus, it is in everybody's interest that we get on with that as quickly as possible.

Mrs. Lait: The right hon. Gentleman will recall that when the Bill was published, the Data Protection Commissioner expressed significant reservations about it, although the right hon. Gentleman told us in Committee that she had subsequently withdrawn them. Was CIFAS part of the negotiations? Are the right hon. Gentleman or his officials holding discussions with the commissioner about section 29 of the Data Protection Act 1998? The commissioner has given us to understand that that section covers the points made by the right hon. Gentleman and the legal advice that he has taken.

Mr. Rooker: The answer to the hon. Lady's first question is--to the best of my knowledge--no. There were no prior discussions with the commissioner when the Bill was being planned. That has now changed because, given that we have only heard reports of what was said at the annual meeting of CIFAS by the information commissioner, we have written to her to sound her out more fully on what she said and on the legal advice underpinning it. It is crucial that such legal advice is correct.

Obviously, I cannot state categorically what the commissioner said last week, because I was not present. I understand, via her office, that she was answering a question, but that she was referring to cases in which the private sector prosecutes an individual. In such a case, there may be scope for the DSS to give relevant information to the company concerned. We are happy to discuss that further with the commissioner, but she seems to be talking about providing information on a case-by-case basis, which is a wholly different matter from the bulk transfer of DSS information to the private sector.

We have discussed with the industry only information routinely issued in bulk, for which we have not found a legally workable solution, but I understand that the commissioner was discussing information provided on a case-by-case basis. So as long as there is no breach of the legal framework within which we work, such as the data protection legislation and other relevant statutes, clearly, we would seek to provide such information. However, we are seeking further and better particulars from my learned friends and others and to open a conversation with the data protection commissioner.

There is good will on both sides; we want to work in partnership with the private sector. This is not a criticism of the drafting of new clause 2, but it would represent a step too far if included in the Bill. Nevertheless, in the fight against fraud, the more we can transfer information, compatible with the protection of privacy and data protection legislation, the better for everyone all round. Therefore, I hope that my right hon. Friend the Member for Birkenhead will not press new clause 2 to a Division.

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