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Baroness Hollis of Heigham: I do not know why the Minister should be so certain, perhaps he should ask his noble friends. Is that not the appropriate etiquette on these occasions? I am baffled by part of what the Minister said--no doubt it is my fault. He said that the inspectorate was not responsible for ensuring health and safety either. That was the job of the Health and Safety Executive. Can the Minister explain to me what on earth that analogy has to do with the matters under discussion?

The point about this amendment as well as the previous one is that data protection principles ensure the propriety of the path trodden to get to the point of eradicating fraud. We are talking about data matching. That is how, to some degree, the fraud will be determined and made transparent and therefore pursued. Will the Minister tell us where he gets the analogy of the Health and Safety Executive? I do not understand it.

Lord Mackay of Ardbrecknish: I was pointing out that there are other pieces of legislation which control matters within local government. We would not expect the fraud inspectorate to be on the lookout for those, any more than we would expect those responsible for that legislation to monitor the Data Protection Act. If the noble Baroness does not like the example, then I withdraw it. But my argument stands in relation to the Data Protection Act.

I am clear as to what the fraud inspectorate's task is. If the noble Baroness wishes to dilute it, that is her concern. I do not. I believe that the proper procedures

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are in place with regard to the Data Protection Act. I do not think that it is necessary to add data protection duties to the activities of the fraud inspectorate.

Baroness Hollis of Heigham: It is clear that the Minister accepts the ineptitude of the analogy. The fraud inspectors will no more look into health and safety than they will look into equal opportunities, responsibilities on race relations, environmental assessments or anything else. The point about data protection is that in the pursuit of fraud one will handle sensitive material and, therefore, it should be handled in ways that conform to principles of data protection. It is about how you get there. That is why it is integral and the Minister knows that the cross-reference to health and safety was absurd.

Lord Mackay of Ardbrecknish: I did not wish to go back to the analogy, I was trying not to waste the Committee's time by continuing it. Of course, health and safety are concerned with the way the staff work. The point is that when it comes to the employment of fraud staff, health and safety issues are relevant when they relate to what people do and how they carry out their work.

If one were making the kind of argument put forward by the noble Baroness, one would say: "While they are at it, they had better check that what the staff are doing in their fraud work is consistent with health and safety issues". I said and remain of the opinion that there are proper bodies to do that, just as there are proper bodies to look after data.

Baroness Hollis of Heigham: That is an absurd analogy but we could argue about it afterwards. I do not understand where the Minister is coming from on this. He refuses to accept that we are talking about the methodology, how one gets from point A to point B so that the means do not subvert the end or the end does not subvert the means. I am very dissatisfied with the Minister's response and would like to seek the opinion of the Committee.

5.49 p.m.

On Question, Whether the said amendment (No. 51) shall be agreed to?

Their Lordships divided: Contents, 48; Not-Contents, 127.

Division No. 2


Addington, L.
Alderdice, L.
Beaumont of Whitley, L.
Borrie, L.
Broadbridge, L.
Carlisle, E.
Carter, L.
Clancarty, E.
Cocks of Hartcliffe, L.
David, B.
Dormand of Easington, L.
Dubs, L.
Eatwell, L.
Elis-Thomas, L.
Fisher of Rednal, B.
Gould of Potternewton, B. [Teller.]
Graham of Edmonton, L. [Teller.]
Grey, E.
Harris of Greenwich, L.
Haskel, L.
Hollis of Heigham, B.
Hughes, L.
Jay of Paddington, B.
Kilbracken, L.
Lester of Herne Hill, L.
McIntosh of Haringey, L.
McNair, L.
McNally, L.
Mar and Kellie, E.
Meston, L.
Monkswell, L.
Morris of Castle Morris, L.
Ponsonby of Shulbrede, L.
Prys-Davies, L.
Redesdale, L.
Rodgers of Quarry Bank, L.
Russell, E.
Serota, B.
Stoddart of Swindon, L.
Thomson of Monifieth, L.
Thurso, V.
Tordoff, L.
Turner of Camden, B.
Wallace of Coslany, L.
Whitty, L.
Williams of Crosby, B.
Williams of Elvel, L.
Winston, L.


Acton, L.
Ailsa, M.
Alexander of Tunis, E.
Ampthill, L.
Anelay of St. Johns, B.
Annaly, L.
Ashbourne, L.
Astor of Hever, L.
Attlee, E.
Balfour, E.
Belhaven and Stenton, L.
Belstead, L.
Berners, B.
Bethell, L.
Biddulph, L.
Blaker, L.
Blatch, B.
Boardman, L.
Boyd-Carpenter, L.
Brabazon of Tara, L.
Bridgeman, V.
Brigstocke, B.
Brookes, L.
Brougham and Vaux, L.
Cadman, L.
Campbell of Alloway, L.
Campbell of Croy, L.
Carnock, L.
Chelmsford, V.
Chesham, L. [Teller.]
Clanwilliam, E.
Clark of Kempston, L.
Coleridge, L.
Courtown, E.
Craigavon, V.
Cranborne, V. [Lord Privy Seal.] Crickhowell, L.
Cross, V.
Cumberlege, B.
Davidson, V.
Denbigh, E.
Denton of Wakefield, B.
Dixon-Smith, L.
Downshire, M.
Eden of Winton, L.
Elibank, L.
Elliott of Morpeth, L.
Elton, L.
Feldman, L.
Flather, B.
Forbes, L.
Gisborough, L.
Goschen, V.
Gray, L.
Haddington, E.
Harding of Petherton, L.
Harris of Peckham, L.
Harrowby, E.
Hayhoe, L.
Henley, L.
Holderness, L.
HolmPatrick, L.
Howe, E.
Howe of Aberavon, L.
Hylton-Foster, B.
Inglewood, L.
Jeffreys, L.
Kenilworth, L.
Kingsland, L.
Kinnoull, E.
Kintore, E.
Lauderdale, E.
Lindsay, E.
Liverpool, E.
Long, V.
Lucas, L.
Lucas of Chilworth, L.
Luke, L.
Lyell, L.
McColl of Dulwich, L.
Mackay of Ardbrecknish, L.
Mackay of Clashfern, L. [Lord Chancellor.] Mackay of Drumadoon, L.
Macleod of Borve, B.
Marlesford, L.
Massereene and Ferrard, V.
Merrivale, L.
Mersey, V.
Miller of Hendon, B.
Milverton, L.
Monckton of Brenchley, V.
Mottistone, L.
Mountevans, L.
Mowbray and Stourton, L.
Munster, E.
Murton of Lindisfarne, L.
Nelson, E.
O'Cathain, B.
Oppenheim-Barnes, B.
Oxfuird, V.
Park of Monmouth, B.
Pilkington of Oxenford, L.
Platt of Writtle, B.
Quinton, L.
Rankeillour, L.
Rees, L.
Rennell, L.
Renton, L.
Renwick, L.
Saint Albans, D.
St. John of Fawsley, L.
Shaw of Northstead, L.
Skelmersdale, L.
Stewartby, L.
Stodart of Leaston, L.
Strange, B.
Strathclyde, L. [Teller.]
Taylor of Warwick, L.
Thomas of Gwydir, L.
Trumpington, B.
Ullswater, V.
Vinson, L.
Vivian, L.
Wharton, B.
Willoughby de Broke, L.
Wise, L.
Wynford, L.

Resolved in the negative, and amendment disagreed to accordingly.

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5.57 p.m.

Lord Carter moved Amendment No. 52:

Page 11, line 40, at end insert--
("(3) Any authority sent a report by the Secretary of State under subsection (2) above may, within 28 days of receiving the report, make such representations to the Secretary of State about the content of the report as it considers appropriate.
(4) In considering any further action as a result of a report made under this section the Secretary of State shall have regard to any representations made by an authority under subsection (3) above.").

The noble Lord said: This amendment is designed to allow local authorities to respond to reports on social security administration. We are advised on this matter by the Association of District Councils, the Association of London Government and the Association of Metropolitan Authorities who believe that there is a serious point here and that the Bill requires amendment.

The amendment would give a right of reply to an authority which has had a report made against it under Clause 5. The intention is to give an authority in that case an opportunity to make comments about such issues as the accuracy of the statements in the report and the methodology used. It would also--which is extremely important--give the authority the opportunity to explain the reasons for any failings identified in the context of its own financial position, the level of subsidy received from the Government and the overall impact of the Government's benefits policy.

As drafted the Bill establishes a system which allows an adverse report to be made against an authority under Clause 5 which could then be used as the basis of a direction from the Secretary of State under Clause 8, the compulsory contracting out of benefits administration under Clause 9, and the deduction of subsidy under Clause 10. Although an authority will have an opportunity to submit proposals for improving its performance and remedying any failings identified in the report and prior to receiving a direction under Clause 8 there will be no statutory right of reply for the authority before that stage. That means that there is no requirement on the Secretary of State to consider an authority's representations before moving on to the next stage of making a direction or deducting a subsidy.

The amendment was moved in Committee in another place where the Minister argued that it was unnecessary because it would largely pre-empt the provisions already made in Clause 8. But the purpose of the amendment is precisely intended to pre-empt the provisions in Clause 8 because that is the clause which deals with directions by the Secretary of State. We feel that local authorities should have an opportunity to make comments on adverse reports against them and that the Secretary of State should be required to consider those representations before moving on to consider taking action against a local authority. In some cases, criticisms

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of poor performance may not be well founded or the poor performance may be caused by insufficient government subsidy for administration costs or by inappropriate policies which are pursued by the DSS. We know that central government subsidy now covers only two-thirds of actual benefit administration costs and in individual authorities the proportion will be much lower. In this context lack of central government support to a particular authority may be the principal reason for its failure to perform adequately. The authority should have the opportunity to make such points and the Secretary of State should be under an obligation to take them into account before considering the making of directions under Clause 8.

We think there is an injustice here. We do not think the local authorities will have the chance to respond before the Secretary of State makes directions under Clause 8. It would considerably add to the justice of the Bill if the Minister were minded to accept the amendment. I beg to move.

6 p.m.

Earl Russell: I am very happy to support the amendment. When one thinks of amendments in one's own mind one tends to use a shorthand. One identifies them by a single word with which one associates them. I am sure the noble Lord, Lord Carter, will understand why I have identified this as the Calderdale amendment. We have here another case of a report on which the local authority wishes to make comments. It is in the Government's interest to allow these comments before any action is taken and to institutionalise the procedure for them.

We have here a procedure which may end up in a deduction of subsidy or in another penalty. We have in effect an exercise of administrative power. All such excises of power, by a provision which is many centuries old in English law, are liable to review by the judges in court. The noble Lord, Lord Lucas, who, I am happy to see, is now in his place, will, I am sure, recall a very interesting discussion we had to which I referred the other day about the extent to which the drafting of legislation may tend to increase the number of judicial reviews. If there is no restriction on the powers of authority in the wording of the legislation, then, literally as a kind of court of last resort, the powers of judicial review come into operation. If this amendment is not accepted, the powers of judicial review will be the first port of call for controlling the Secretary of State's exercise of power. If it is accepted, then there will be what I am sure the Government will find more satisfactory--a statutory check on the exercise of power. Power can be checked according to the expressed will of Parliament. There are advantages in that if Parliament will express the requisite will. But it can only do so, so far as I can see, by accepting the amendment.

One of the ways in which the local authority might well wish to express the view that it had been unfairly dealt with is by making reference to its financial position. Local authorities very frequently believe, and very frequently correctly believe, that poor performance is the result of inadequate financial support. There is a certain amount of support from central government but

13 Mar 1997 : Column 467

central government subsidies now cover only two-thirds of actual benefit administration. Because of the very complex way the formula for local authority support works, in individual authorities it may be very much lower. In those cases in particular, they may have a very strong case indeed for wanting to make representations. Those are two strong points in favour of the amendment. I am happy to support it.

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