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4.42 p.m.

The Earl of Northesk: My Lords, instinct tells me that I should advise your Lordships that I own a number of tenanted properties. I am unaware whether any of my tenants is in receipt of housing benefit but certainly I do not receive any direct payments. I make the point nonetheless for the information of your Lordships. That said, I do not intend to address those aspects of the Bill.

I hope I do not disappoint my noble friend the Minister when I say that, like almost every other noble Lord who has spoken, I wish to address the Bill's provisions with respect to data matching. I share the view of other noble Lords that none of us should doubt the desirability of the purpose underlying the Bill. What really matters is that social security fraud not only defrauds the Government; it also defrauds every citizen in the land. However much of a truism that may be, we are well advised to remember it and to recognise that it is incumbent upon any government to do what they can to root out that iniquity.

I now turn to the matter of data matching contained principally in Clauses 1 to 4 of the Bill. As I said, many noble Lords have already spoken on the issue. Indeed I am somewhat embarrassed to follow the noble Lord, Lord Lester of Herne Hill, who is far more knowledgeable and erudite on these matters than I. He is a hard act to follow but I shall do my best and I hope I shall not indulge in too much repetition. If I have understood the provisions of the Bill correctly, they seek to improve the detection of certain types of benefit fraud by permitting the comparison of data held by certain government departments with data held by the DSS.

I do not wish to test the patience of your Lordships with any analysis of the arcane technology of databases and data matching--the mechanics of neural networks, fuzzy logic and the like. I simply say I am broadly content that it is justifiable that the extremely powerful analytical tools unleashed by the information revolution should be employed in the detection of fraud. However, I do not believe we should be blind to the fact that their use for this purpose raises a number of ethical questions. As mentioned by many noble Lords, the management, processing and manipulation of personal computer data is regulated under the Data Protection Act of 1984. My noble friend Lord Elton, while steering that measure through the House, observed that the Act had been drafted,

More than that, the Act, following on from the recommendations of the Younger Committee's report on privacy in 1972--as we have been told by the noble Lord, Lord Lester-- enshrines eight data protection principles in statute. I do not doubt that the provisions in the Bill before us today are broadly consistent with those principles. I also have it in mind that my noble friend the Minister implied confirmation of that in his introduction. However, a seed of slight suspicion is

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sown in my mind on the basis that, as I understand it, the Data Protection Act may also seek to,

    "prevent 'wholesale' matching between departments or agencies which have collected data for different purposes, unless there is specific enabling legislation".

Of course the clauses in the Bill that deal with the issue of data matching are that specific enabling legislation.

In this context the POST note entitled Fraud and Computer Data Matching states:

    "Public sector data matching exercises so far have ... had to rely either on serendipitous provisions (e.g. the Audit Commission's power to require information from Local Authorities for the purpose of efficiency studies), or occurred entirely within a single department".

Accordingly, the question I ask myself is whether this situation pertains because of an aberration--a failure perhaps of the legislation to keep pace with the technological development--or because it has been specifically framed in order to afford appropriate protection to our citizenry.

At one level at least the Government have acknowledged some sensitivity with respect to the issue. The recently released Green Paper rejects the concept of forming a single, centralised government database. That is all to the good. However, one does not need to be overly computer literate to be aware of the vast technological strides made in recent times with respect to the interconnectivity of database systems. As the POST note observes,

    "interconnecting government computer networks risks allowing access to the totality of information, unless suitable administrative and technical security is in place".

In the circumstances I can do no other than inquire of my noble friend the Minister what suitable administrative and technical security the clauses in the Bill afford against the possibility of that sort of abuse? My own, perhaps simplistic, interpretation is that enactment of these clauses could--I stress the word "could"--as the POST note says,

    "lead to widespread data sharing in Government, without the consent of data subjects, and thus be in tension with the philosophy of current data protection legislation".

In this context I should admit to being tempted to recognise a certain symmetry between this issue and that of the Government's provisions in the Police Bill with respect to telephone bugging. At its worst, indiscriminate and uncontrolled use of personal computer records could be represented as a form of eavesdropping.

As the noble Lord, Lord Lester, observed, we should also bear in mind that it is now some 14 years since the Data Protection Act passed into statute. That is a considerable flow of water under the bridge with respect to information technology. By way of illustration--again as the noble Lord, Lord Lester, observed--the Act of 1984 did not address the specific issue of data matching, purely and simply because it is a development that post-dates its enactment, although I recognise that the registrar is empowered to interpret the principles in order to regulate this area.

I acknowledge that it is often too easy to see ogres where none exists. As the map of information technology is drawn, we can, like medieval

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cartographers, define areas with the legend "Here be dragons" simply because they have yet to be properly explored. However, at the other end of the scale, we can, like Patrick MacGoohan, in the much admired TV series "The Prisoner", protest as vehemently as possible, "I am not a number". I make no judgment as to which is the more appropriate analogy for the Bill's data-matching provisions. I simply say that they represent a sub-plot which we would be well advised to examine in greater detail. We should be careful not to be seduced by the worthiness and great value of the Bill's headline aim of tackling benefit fraud and fail to address the wider context of data protection and privacy.

I can put it no better than the concluding paragraph of the POST note:

    "Privacy is an abstract concept which is open to different interpretations by individuals and organisations, and Parliament may well need to address questions of where to strike the balance between protecting reasonable privacy for the individual and society's need to protect itself from crime such as fraud and to operate efficiently".

To my mind, Clauses 1 to 4 of the Bill pose that question to us directly and, as suggested by the noble Earl, Lord Russell, it is one of the angles of approach for our scrutiny of the Bill in its later stages.

4.51 p.m.

Lord Whitty: My Lords, I begin by assuring the Minister that I and noble Lords on this side of the House fully share the view that social security fraud is indeed a real problem and that we need some serious measures to deal with it. We do so partly because of our well known prudent concern for public finances but, more particularly, because the real victims of social security fraud are not the Treasury but the millions of legitimate claimants--their position and standing is besmirched every time we have a Daily Mail treatment of social security fraud--and the millions who are entitled to claim but refrain from doing so. I refer to the million or so pensioners who fail to gain their entitlement under income support.

I should have thought that the relatively limited application of the new technology of data-matching could identify those who are entitled to claim but do not do so as well as those who make false claims. However, I understand that as long as there is substantial fraud creaming off the top of the social security system the motivation for departments of state to identify those who do not claim is relatively limited.

I welcome therefore the objectives of the Bill. However, like the noble Lords, Lord Stallard and Lord Lester, and the noble Earl, Lord Russell, I have some problem about the way in which the measures in the Bill may operate in relation to individuals. I refer, for example, to the disability working allowance. There are some administrative problems. The Bill seems to confuse administrative problems with problems of fraud. I refer, for example, to the presumption that overpayment is always due to fraud and not to misunderstanding; and to the apparent requirement that the burden of responsibility is on the claimant for the accurate reporting of change of circumstances. Disabled

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people may not be in receipt of the most accurate information as to their responsibilities. There is the suspicion that certain parts of the Bill would give effect to fishing expeditions for false claims which in some cases would be unjustified and not subject to adequate safeguards. I refer to the cavalier way in which data matching is treated. I support the bulk of what the noble Lord, Lord Lester, said in relation to safeguards in that respect. Those points will be raised in Committee by myself and other noble Lords.

However, my main intervention, as with my noble friend Lady Hollis, concerns the imbalance in tackling the causes of fraud. There are essentially three elements in relation to housing benefit: the claimants, the local authorities and the landlords. It is fairly evident from evidence received that the biggest problem lies with a small, relatively limited, number of landlords. I note that there are 21 operative clauses in the Bill: nine deal with local authorities and attempts to improve detection and enforcement in those areas; 10 deal with individual claimants; and only two relate to landlords. I welcome those two clauses. I welcome the improvements since the original Bill was presented in another place. Nevertheless, the provisions need to be strengthened.

We all know that there are individuals who milk the system, some by a few bob and others by hundreds of thousands of pounds. But we also know, as the Minister acknowledges, that there are organised gangs. Some individual fraud in the housing benefit area dilutes into relatively small amounts compared with a massive landlord fraud. That landlord fraud is not only on the social security system and on the tenants, it is also on the local authorities and the Inland Revenue. It is, as we say in London, a scam of massive proportions.

I speak of London because I know London well. I know that there are people in London who know of these scams. Many are afraid to talk about them. They are certainly afraid to identify those who perpetrate them. That makes it difficult for the authorities to detect the scam, and even more difficult for them to prove it. But the scam is there and, in order to improve detection and enforcement, we need not only the measures against claimants in support of local authorities but also resources for detection, and the enforcement of the law.

We all know why it is such an attractive scam for a few landlords. Housing benefit is big money involving prodigal amounts of money since 1985. The Select Committee of another place found that £1 in five is fraudulently claimed. That is £1 in five of £5 billion. Crooked landlords and crooked agents obviously wish to get their hands on that money. Although there does not seem to be a national figure, the anecdotal evidence from local authorities is that an increasing proportion of housing benefit is paid directly to landlords. It is paid subject to few checks except in the first instance, and often those are inadequate. Until May last year it seemed that the Government were prepared to ignore that aspect of fraud. Until local authorities and the Select Committee of another place identified the huge sums involved little was done.

The original Bill has been improved to deal with some of those issues. But there are aspects which I tend to query. More direct measures are needed. As the noble

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Lord, Lord Stallard, said, London boroughs have come up with a Bill which was to have been discussed in this House. It calls for landlord fraud to be a specific offence. Local authorities have done well, as has been pointed out, without an increase in local authority resources, and some disincentives in terms of central government support for their activities. But long before the Bill that we are discussing was a twinkle in the eye of the Secretary of State, London boroughs had produced a firm and effective Bill which this House should consider. Some of the provisions may have been taken up in the Bill that we are debating. But the central problem of landlord fraud has not been dealt with effectively in the redrafted Bill. I shall not repeat what my noble friend Lord Stallard said about the contents of that other Bill. I merely commend it to noble Lords and to the Minister.

I used the term "scam" earlier. That may be too nice a word with which to refer to the issue. In effect, it is often a protection racket on some of the more vulnerable people in our society. It is a protection racket at the expense of local authorities, the taxpayer and legitimate claimants. A number of landlords make a lot of money by deception, extortion and intimidation. That alienates hundreds of thousands of decent tenants and claimants. Let us not be too coy about it: it accentuates some of the problems of race relations in our inner cities when it operates, as it often does, within particular ethnic communities. That is not the fault of the individuals concerned or of their families or communities. It is the unacceptable face of the new developments over the past 10 years of landlordism in our inner cities. In some areas, far from urban renewal, we have new forms of exploitation and ghettoisation--exploitation of the tenant and the welfare state, and of the loopholes in the payments system.

I say to the Minister: by all means we must tackle individuals who deliberately defraud the system. By all means we must improve the powers and effectiveness of local authorities in the public prosecution of problems. But we must also tackle the problem where it lies, in housing benefit fraud--in the new Rachmanism, on the back of tenants and at the expense of us all.

5 p.m.

Baroness Anelay of St. Johns: My Lords, I welcome the Bill as part of the Government's long-term strategy to fight social security fraud. Like others who have spoken I, too, believe that social security fraud is not a victimless crime. It cheats us all. Too many people are deterred from claiming benefits to which they are entitled because they do not wish to be tainted by association with those who cheat the system. It is sometimes said that fraud campaigns deter the genuine claimant. But exactly the reverse can be true, provided those campaigns are properly directed and managed. If potential benefit claimants can be confident that cheats can be readily identified and prevented from making a claim, they can be more confident about making a claim themselves and retaining their good name.

This Bill gives the DSS the opportunity to build on its current use of information technology systems to detect and deter fraud. The security and control

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programme launched over 30 projects to combat fraud. One of those, the housing benefit matching service, relies upon the development of information technology systems. Data is matched within and across local authorities and against DSS systems to detect fraud and inconsistencies. A central computer system has been piloted to cross-check multiple housing benefit claims. Initially this covers 24 London boroughs.

But the Bill harnesses the power of IT far more effectively. I welcome the proposals to allow the DSS to cross-check data, principally with that held by the Inland Revenue and Customs and Excise, but also with other databases holding information, such as those with information about passports or prisoners. That will make it easier for the DSS agencies to investigate benefit fraud whether it is carried out by individuals, organised gangs or landlords. Conventional methods of detection have not always been effective. The use of modern technology, albeit under carefully controlled conditions, will enable quick and effective checks without putting genuine claimants through any extra hoops in their claim for benefit. Some of those who commit large-scale fraud do so by making use of sophisticated IT systems to build up a web of multiple false claims. It is about time that we were able to use IT as effectively as possible to detect that kind of fraud.

Earlier, the noble Lord, Lord Lester of Herne Hill, reminded us that data-matching is rather new in the world of the DSS. I was involved in data-matching some 30 years ago when I worked in the Inland Revenue. Certainly in its infancy then, it meant that, once a year, when the tax return came in you simply held two pieces of paper side by side and, laboriously as a clerk, looked across to see whether somebody had remembered to invent the same children again this year and, if they had, had remembered to make sure that the ages had gone up and also that they happened to have the same middle names. Thank goodness, that kind of data-matching is in the past. New data-matching is far simpler to operate and far more effective. However, like others who have spoken, I recognise that we must always use caution when expanding the ability of government departments to gain access to personal information.

The Bill also recognises the role of local authorities in fighting fraud. I hope that it will open up a new area of co-operation between the Department of Social Security and local authorities. However, the performance of local authorities is variable, despite remarks made earlier by one or two noble Lords. Twenty-five per cent. of all benefit fraud--£1 billion--is attributable to housing benefit or council tax fraud. I therefore welcome the proposal to establish a fraud inspectorate which will have powers to examine the performance of local authorities. Its role will be to help and improve the performance of the worst-performing councils and to advise on best practice. It will have a powerful role to play in the fight against fraud.

I note that Clause 3 enables the Secretary of State or the Northern Ireland department to pass on information obtained by cross-checking to local authorities to help them in their detection of housing benefit and council

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tax fraud. I welcome, too, the measures in the Bill that improve the Government's ability to prosecute and penalise those who make fraudulent claims.

Reference has already been made to Clause 13, which creates the new offence of dishonestly making a representation or failing to report a change of circumstance in order to obtain benefit. The noble Earl, Lord Russell, made reference to his concerns on this point and wondered whether mens rea would come into effect. When I read the Bill I noted that Clause 13 makes reference to the fact that the matter of a person dishonestly making representation comes into effect only when it is done also,

    "with a view to obtaining any benefit".

I ask my noble friend the Minister to confirm what I believe to be a fact; namely, where people have innocently not made a change of circumstance known to the DSS, they could not be caught by that particular part of the clause, and that it is reserved only for those who fail to notify a change of circumstance because they have it in mind that, by doing so, they will obtain benefit to which they would not otherwise be entitled.

The clause imposes a penalty with a maximum of seven years' imprisonment in Crown Court cases or six months, as would be normal, in a magistrates' court. It therefore gives the courts the ammunition to pass the proper sentence in the appropriate case.

A typical long-term fraud involves someone making a false statement in order to claim benefit and continuing then to receive payments over a very long period. At the moment, those frauds are prosecuted on the basis of a declaration made at the time of payment. But a long-running fraud would involve hundreds of fraudulently obtained payments week by week. When I have sat at social security appeal tribunals I have seen the full record of those. Again, when I have sat on similar cases in magistrates' courts, I have then seen only specimen cases brought. I was disturbed last year to discover the effect that Court of Appeal judgments would have on the ability of the DSS to prosecute fraud successfully. If payments are made directly to a bank or building society, there is the added problem that there is not a specific declaration for each payment; so the fraudster cannot then be prosecuted under existing powers. I should be grateful if, in replying, my noble friend the Minister will confirm that this clause, like so many other provisions in the Bill, will be effective in the prosecution of not only individuals or groups of people but, in particular, landlords. As I understand it, landlord fraud is dealt with throughout every clause in the Bill.

Clause 16 introduces a provision to allow local authorities to recover housing benefit overpayments from payments made directly to a landlord in respect of other tenants. An example is where a tenant makes a claim for housing benefit, is overpaid and then moves on, not leaving a trace behind. If payments are not recoverable by deductions from benefits, the clause then makes it possible for them to be recovered by action in the county court in England and Wales and the sheriff court in Scotland. This is a very sensible measure to introduce in order to redress an anomaly.

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Fraud endangers access to benefits by the genuine claimant. I welcome the measures introduced in the Bill. They will play a valuable part in the work of detecting and preventing the commission of fraud. In that way we can protect the vast majority of claimants who are honest. That must be the best course of action for us all. I commend the Bill to the House.

5.10 p.m.

Baroness Gould of Potternewton: My Lords, as made clear by all noble Lords who have spoken, no one can argue against the principle of the need to tackle vigorously the corruption of our benefits system by fraudulent claims, which has a detrimental effect on the entire social security system. Nor would anyone argue, I believe, that tracing and eliminating social security fraud is not a difficult and complex process. It is perhaps simplified by information technology but, as the debate has shown, our social security system is still something of a labyrinth.

While the Bill is welcome, a number of aspects cause concern. I wish to refer to one or two, in particular the effect on individuals. For instance, the Bill appears to treat all fraud as equal and deserving of the same response: penalties appear to be mandatory in all circumstances. Yet the level and types of fraud vary considerably, from large-scale counterfeiting of order books to failure to declare a one-off payment of £5. No fraud is justified but there will be those who defraud from a straightforward criminal intent dishonestly to obtain a large sum of money while others will be people whose families, for whatever reason, find it impossible to live on the level of benefit received.

Will the Minister tell us what research was undertaken to classify the different factors which cause people to defraud the system and whether the result of that research is available? Only with that knowledge is it possible to devise the most appropriate penalties and assess whether harsher penalties will have a deterrent effect.

Another general concern is the need for assurance that the element of fairness to the genuine claimant is retained. Fraudsters, be they in the public or private sector, must be identified; but we must ensure that such activity does not deter those in need from claiming benefit. My noble friend Lady Hollis referred to cross-matching being useful not only to tackle fraud but also to ensure that those entitled to benefit receive it. I, like my noble friend Lord Stallard, fail to understand why it is not possible to identify the nearly one million pensioners who are entitled to income support but who do not claim it.

As I understand it, it is the view of the Government--and I hope the Minister will confirm or deny this--that the claiming of benefit is a matter of personal choice and that there will always be those who choose not to make a claim. That would be true for a few but, with the greatest respect, for the majority that is nonsense. Choice depends on knowledge of the different options available. Most who fail to claim do so through unawareness or because of the complexities of the system.

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I also understand that the Government believe that the cross-checking of data for the benefit of claimants is contrary to the European Convention on Human Rights. Do the Government believe that Article 8 of that convention, as referred to by the noble Earl, Lord Russell, stands in the way of cross-checking data in such a manner? Does not the convention allow various exemptions by law for other purposes which would cover this type of cross-checking?

As stated by noble Lords, the sharing of personal information and data matching between two or more organisations, crucial as it is, raises fundamental principles of data protection, including the principle that personal information should only be used for the purpose for which it is collected. The wider the scope of data matching, the greater the threat to the individual because it involves analysis of information about large numbers of people when there is no prior cause for suspicion. There must be a balance between the use of data matching to detect fraud in order to protect public funds and the individual's right to privacy.

The Bill makes no reference to the need for compliance with the principles of the Data Protection Act nor to the rights of individuals under that Act. Claims for benefit usually follow a major and often traumatic change in a person's circumstances. Benefits are claimed on different forms from different agencies; different benefits are awarded for different lengths of time; and the changes of circumstances that need to be reported also vary. It is easy for people to become genuinely confused.

There is a serious omission of a right of redress for people who may be wrongfully accused of fraud or misrepresentation through mistaken identification or other errors which are almost bound to occur in an exercise of this size.

I turn now to the question of relevant information. Who determines relevance? At present within the Benefits Agency information which is considered relevant is currently passed to different sections in writing. Presumably that will in future be done by computer, but the principle does not change. As each section only has the expertise to deal with its particular area of benefit, important information may not seem relevant to one section but may be vital to some other aspect of the claim. I say that from heart-searching personal problems which I have recently faced. Relevance will become more complicated as the transfer of information is extended; there is no definition in the Bill.

I am also concerned about delay in making payments. It is inevitable that steps taken to prevent and detect abuse will involve some delays in dealing with claims. In the meantime, the claimant will not be receiving the benefit to which he or she is entitled. Technology will not necessarily lead to greater speed in processing claims. Delay can be disastrous to those in need. Nor will technology lead to greater accuracy. There have been many examples of incorrect accounting, of the claimant being given incorrect information, with consequent confusion and further delay.

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It is right that the record of detection and different initiatives taken by local authorities should be actively monitored and links between authorities encouraged in order to promote best practice. In the main, local authorities do take fraud seriously. We must applaud those that have already taken innovative action to identify and eradicate benefit fraud within their own area. Good examples are the working together of the London boroughs, the DSS and the London Team for Action against Fraud and the extensive home-check programme in the London Borough of Haringey.

However, fraud is not confined to London. The Social Security Select Committee suggested that organised fraud was increasingly migrating to small towns and even rural areas. In its document Recovering the Missing Millions the Labour Party proposes the establishment of a further nine fraud investigation teams on the same basis as LOFIT. It is estimated that that would lead to net additional savings of over £310 million a year for an initial start-up cost of some £9 million, a measure which should surely be supported.

Local authority associations have also welcomed the power contained in Clause 16 to recover benefit overpayments, an area of fraud which is well organised and highly sophisticated. As my noble friend Lord Stallard said, this new power does not go far enough. The Government's own research has found that while only a third of housing benefit claims are for private rented accommodation, those claims account for two-thirds of all housing benefit money lost through fraud. The Minister cited an example of fraud to justify his case; I should like to quote two examples of landlord fraud. When eight managing agents were challenged by the London Borough of Greenwich, it was found that of 292 properties investigated 88 were empty. There is also the example of the landlord in London making 165 housing benefit claims, of which one-third were found to be bogus, costing the taxpayer £5,000 a week.

There is no doubt that the Government's lack of action on landlord cheats means that every taxpayer has lost £400 through housing benefit fraud since the last general election. Local authorities would be greatly assisted in counteracting this fraud by having the right to obtain proof from landlords and managing agents of their right to control the property for which they are claiming direct payment of housing benefit; by having the right to refuse payment if refused entry to a property; and by having a register--not just information provided--of all landlords who own a number of properties.

There are many other queries about the Bill but at this stage I shall confine my remarks to two further but related aspects. They relate to Clauses 17 and 18. I should like to hear from the Minister the justification for the provisions and his evidence of widespread fraud in relation to disability living allowance or the attendance allowance. I am sure that there is some fraud, but there is also protection. No claim is made without corroboration by either a doctor or an independent person. The people with whom we are dealing are either chronically sick or disabled. And they are extremely vulnerable. The proposal allows the Secretary of State to conduct fishing exercises, even when there is no existing

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evidence of fraud. It could, for example, mean unannounced calls on people who have serious mental health problems or severe learning difficulties when there has been no change in their circumstances. Would not it be better, instead of the house call, to ensure that claims have to be made on a regular basis and all those claims corroborated? That would safeguard a very vulnerable group of people, many of whom live alone and find it difficult to communicate.

Similarly, there is the power to require someone in receipt of DLA or AA to submit to a medical examination "in prescribed circumstances". Can the Minister define the nature of "prescribed circumstances"? Surely it is a little draconian to withhold benefit if someone fails to attend such a medical examination before at least ascertaining the cause of non-attendance. People who have legitimate reasons for not attending should not be penalised.

Legislation is necessary to address the pernicious problems of fraud. But we have to ensure that such legislation is fair, respects the privacy of the individual and does not deflect the genuine claimant from his entitlement to benefit. The Bill as it stands does not wholly satisfy all those requirements. However, as it goes through its various stages in this House, I hope that, as opposed to our lack of success in the other place, we can persuade the Government by reasoned argument of the need for amendment.

5.22 p.m.

Lord Mackay of Ardbrecknish: My Lords, we have had an interesting debate this afternoon on this important but, in terms of some of the Bills that I have taken through this House, quite small Bill. I noticed that the noble Earl, Lord Russell, said that he did not wish to score any party points. I rather hoped that in my contribution I had not attempted to score many party points either. I thought that enough party points had been scored in the second half of Question Time this afternoon without adding to them in the course of this Bill. I am not entirely sure that the noble Baroness, Lady Hollis of Heigham, can be absolved from not trying to score the occasional party point, but that is quite another matter. I may even attempt to keep to the noble Earl's strictures in my summing up.

This has been an interesting and wide-ranging debate, as I am sure noble Lords will appreciate. I may not be able to cover every point but those which I do not cover will, I am sure, be taken up at Committee stage.

Before I turn to the Bill itself, perhaps I may address points made by the noble Lords, Lord Stallard and Lord Whitty, about the London Local Authorities Bill and, I hope, get it out of the way before coming to the Bill in front of us.

First of all, the Second Reading of that Bill is not for Wednesday. It appears on the Order Paper as a formality. The Second Reading debate will be agreed by the usual channels. I am sure that they will note the interest in the Bill expressed by both noble Lords. The London Local Authorities Bill does not concern only fraud. It goes a good deal wider. Also, it deals only with

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London, not the whole country. So even in those places where it may overlap, it does so only in part, with those two limitations attached to it. However, with London itself clearly there are some areas of overlap between the two Bills. My officials are in touch with the sponsors of the London Bill about the practical implications of any overlap. For example, if the current Bill receives parliamentary approval, it would be desirable to ensure that there is no conflict between the provisions applying to this Bill and those looked for in the London Local Authorities Bill.

Let me say to both noble Lords that, broadly speaking, the Government share the objective of the London Bill's sponsors to help root out benefit fraud. But it will be important to ensure that any new measures follow on from that objective. For example, the noble Lord, Lord Stallard, referred to proposals to enable local authorities to refuse direct payments where fraud is suspected. The fact is that local authorities already have not only that right but a duty not to pay benefit if fraud is considered. We propose to issue further guidance to local authorities to clarify their rights and responsibilities with respect to direct payments. I hope that answers the points raised about the London Bill and how it impinges on this Bill.

Let me take the particular parts of the Bill in turn, starting first with cross-checking of information, data-matching and the like. My noble friend Lady Anelay of St. John said very clearly that we ought to be able to harness the power of IT. She gave rather interesting examples of how we tried to match data in the paper era before information technology came along. The use of modern technology under carefully controlled conditions will certainly enable quick and effective checks to be made without putting the genuine claimant through any additional effort. Both my noble friends Lord Northesk and Lord Chelmsford emphasised the importance of the new information technology being provided to us.

My noble friend Lord Chelmsford made a particularly important point, especially when it comes to data-matching; namely, that the computer forces one to be much more exact, much more tidy and much more disciplined. Noble Lords who use a computer even at the lowest level as a wordprocessor will know that those three disciplines are certainly imposed by the computer.

Of course I understand that there are concerns about the confidentiality of information. We in government take that issue seriously. We do not believe that the powers in the Bill will allow confidential information to leak out (if I may so describe it) from government. But we believe that it is important that that information should be available to the DSS from other departments. We believe that the degree of benefit fraud is such as to justify taking the powers in the Bill. Although there is a strong public interest in ensuring confidentiality of personal information, there is, in this case, an overriding public interest in ensuring that the benefit system is secure.

The noble Baroness, Lady Hollis, sought assurances about the accuracy of the data. I have already briefly touched on the disciplines of the computer, one of them

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being that it forces the user to be much more accurate in the input of data. But it is important to remember that in a data-matching exercise the sets of data from the different databases are compared electronically. Only cases in which there is inconsistency are "thrown out" by the computer for further attention. Those cases are then checked to eliminate what I suspect will be quite a considerable number of those in which the inconsistency is simply a result of inaccuracy: perhaps the wrong post-code was stated; perhaps someone used a different Christian name; or perhaps someone put in a middle name on one form and not on another. I understand such inaccuracies. I am not a great expert in data matching but I understand that the data-matching systems are well equipped to cope with those kinds of basic inaccuracies between different data bases.

It is only in those cases in which there is an indication of fraud or incorrect payment that there will be any reference for further investigation. Fraud officers will be fully trained to be aware of the likelihood that in fact not all cases referred to them will be fraudulent and that a charge of fraud will only be brought if the evidence is perfectly clear in that regard.

My noble friend Lord Northesk spoke of security measures in the department. May I say that all data-matching exercises will be carried out at a secure site by trained personnel. All information received from other government departments will be held and accessed in strict confidence. There have been no known or recorded incidences of successful external hacking attempts into the DSS computer system. We do attempt to protect our systems as far as possible from external attack. I hope that is helpful.

The noble Lord, Lord Lester of Herne Hill, talked about no complaints procedure or no redress in data matching. I may say to the noble Lord that the department has in place a comprehensive complaints procedure. Information on making a complaint is set out in the leaflet Tell Us About It. Anyone dissatisfied with any aspect of the service they have received can contact the customer complaints manager--there is one in every district office. If he is still dissatisfied he can contact the district manager who will investigate the complaint further. Where an individual believes that the department has mishandled matters he can complain, through his MP, to the ombudsman. If the complaint arises specifically from data matching or any other form of data processing and the individual believes that the department has not, in fact, dealt with his complaint properly, the individual can take his complaint, under the provisions of the Data Protection Act, to the data protection registrar.

As I said earlier, in data matching we will not be dealing with computer-generated decisions. Perhaps the noble Lord, Lord Lester of Herne Hill, thinks that computers are just a bit cleverer than they really are, at least at this stage of the game. Computer matching, as I have said, will enable cases which are obviously unusual or inconsistent to be investigated by trained officials and all their work will be subject to the normal rules. If, in fact, they suspend benefit it will be subject to the normal rights of appeal.

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The noble Baroness, Lady Hollis of Heigham, my noble friend Lord Chelmsford and some other noble Lords asked whether the code of practice on data matching was statutory or one without statutory backing. As my honourable friend said in response to the Opposition's proposed amendment on this in another place, we do not see a need to make a statutory addition to the existing data protection arrangements, which are themselves subject to general review as we move towards implementing the EU directive, and I will answer that point in a moment or two.

The use of data by the department is already subject to the Data Protection Act and the Computer Misuse Act, to offences under Section 123 of the Social Security Administration Act and within the framework of the European Convention on Human Rights and the Council of Europe recommendations on the use of social data.

In addition, strict internal procedures will be observed and the assurances which my honourable friend the Parliamentary Under-Secretary gave in another place will be adhered to.

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