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Baroness Hollis of Heigham: My Lords, I can give the noble Lord that assurance.

Lord Higgins: My Lords, I am most grateful for that rapid reply. As we well know, the citizens advice bureaux do a magnificent job in the field of social security and it would be sad if their activities were to be inhibited.

The banks are concerned about various aspects of the Bill; for example, in relation to the civil liberties of their customers. It is rather like the famous after-dinner joke of Lord Denning, who used to say that he once appeared before a judge and said that he represented a God-fearing limited liability company. I believe that when the banks say that they are concerned about their customers' civil liberties, that may be a little ultra vires.

There are other areas of concern; for example, in relation to credit agencies. I believe that it is not beyond the realms of possibility that if the Department of Social Security says to a credit agency, "We are suspicious about Mr Bloggs", that is unlikely to improve Mr Bloggs' future rating with the credit agency. A similar concern has been expressed by a group called CIFAS, which is anxious to be treated on a reciprocal basis: if it provides information to the Government, the Government should provide it with information. Again, that raises difficult questions and we begin to enter something of a minefield so far as concerns safeguards.

Leaving to one side the point that I have just made, I believe that the banks have a real cause for concern not only as regards the disclosure of information but also as regards the position of their staff; for example,

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where an individual may be held responsible for giving information wrongly or perhaps giving wrong information. The banks stress that they currently have safeguards in place which protect them. They are worried that they will no longer be protected as fully under this Bill as they might wish to be.

I turn to the question of the burden on business. Paragraph 187 of the Explanatory Notes--and, indeed, the regulatory impact memorandum--suggests that the annual cost to business will be between 2.5 million and 7.6 million. I am not clear whether that is the net cost after the reimbursement of costs for which provision is made in the Bill. Perhaps the Minister could confirm whether that cost is net or gross.

In any event, it is rather strange that the organisations which may be reimbursed are not the same as those which appear in Clause 1. The clause which relates to reimbursement covers rather fewer organisations and it appears that some of the burden will fall on individual companies. The regulatory assessment states that the Government do not normally pay for costs which are imposed on business by statute. That may be so, but it does not make the costs any less so far as concerns business. That is, perhaps, yet another form of stealth tax. It may involve immediate costs and the general disruption of a business, if the Government make many applications about numerous individual cases or about collective cases, if that more organised form of fraud is committed.

Outside bodies have made the important point that the request for information should be centralised in the sense that they should not receive requests for information from half a dozen different government departments, such as the Inland Revenue, Customs and Excise and the Benefits Agency; requests should be made through only one route. Similarly, a request should be made only to a particular part of the organisation from which the information is requested. That would not permit an official from the relevant local authority who is concerned with housing benefit to go to a local bank and say, "I should like to know about Mr Bloggs". That would be dangerous in many ways.

I am rather concerned about the extent to which the information will be available in a wider field. We know that such matters are not necessarily water-tight. The regulatory assessment suggests that one might state, "We might just ask for a copy of your latest bank statement". I should not be happy if my bank statement were to start floating around a local authority office. We need to consider the serious issues of security that are raised. From the point of view of the government department and the individual organisation of which information is asked, there appears to be a strong case for centralising the request for information. We need a one-channel system if we are to deal with the matter effectively.

I am conscious of the time and of the fact that other noble Lords wish to speak. In her closing remarks, the Minister discussed the question of penalties. Those of

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us who were involved with the passage of the Child Support, Pensions and Social Security Act 2000 and with previous relevant legislation know that several problems are associated with the withdrawal of benefit. That involves the so-called Windlesham amendment. The Minister is clearly sensitive to that issue, as are Members on the Liberal Benches and on these Benches. Clearly, the Government have gone to considerable lengths to safeguard their position. For example, they said that if the penalty involved reducing income support to only 10p a week, the relevant sum would not fall below that. That means that the related passported benefits would not also be withdrawn--that would be a draconian step. On the other hand, the more that one softens the benefit penalties in the manner prescribed in the Bill, the less effective those penalties are likely to be. A balance needs to be struck, and we shall consider it when we come to the Committee stage.

This is an important Bill. I believe that all noble Lords share its objective, but it has to be viewed in a wider context. Much more can be done outside the Bill, in terms of tackling benefit fraud. Too little has been done until now, and more must be done. We must also ensure that the Bill's balance between achieving its objective and avoiding the dangers that are implicit in several of its proposals are carefully considered. I am sure that we shall do that when we come to the Bill's later stages.

4.3 p.m.

Earl Russell: My Lords, perhaps I may first congratulate the Minister on her opening speech. She spoke with great balance, discretion and care.

The points that the Minister made through her examples are well taken. I accept that, although error and fraud may be confused at the margins, we are dealing with a considerable quantity of real fraud involving malice aforethought. I have encountered most of the types of fraud that she described. Through our business in the House, I have read or heard about many cases. I have also come across one or two examples that are rather worse than any that she mentioned. I recently heard of someone who was using social security fraud to raise capital to run his business as a drug dealer. That is worse than anything that the Minister mentioned.

The problem is not particularly new. I know of the case of a half-pay captain who retired on half pay in 1709. The pension remained in payment until 1812. It is possible that that was not fraudulent, but I find it exceedingly improbable. On the other hand, I am rather sceptical about any attempt to estimate the amount of fraud. I have not forgotten Lord Boyd-Carpenter asking the then Minister, the noble Viscount, Lord Astor, how the government can know the amount of undetected fraud. I have not heard an answer to that question, and I do not expect to.

Clearly, something has to be done about the problem, which is a crime and a sin. We are all against it, and we all want to see the problem reduced. All

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fraud is committed at someone else's expense. However, a balance needs to be struck. We want to fight fraud, to preserve confidentiality and to secure the delivery of benefit to those in need as fast as possible. Those are three good objectives, but we must admit that they are capable of conflicting with one another. When they do, striking a balance is a delicate and sometimes rather difficult operation.

The Minister will be aware that I have a growing reservation about the usefulness of single-purpose Bills. When we consider such Bills, it is extremely easy for the single purpose to become the only matter that is in our minds. The striking of the balance is therefore addressed with a great deal less care than it would be in a Bill that reformed the law on social security in general.

I was a great deal more sympathetic to the Bill before I read it in detail. It addresses real problems but, in practice, it creates many difficulties. On the code of practice, incidentally, to which the noble Lord, Lord Higgins, referred, it would be of material assistance to us if the code could be made available to us before we go into Committee. That would save us a good deal of time.

I thank the Minister and her office for the memorandum I received this morning addressing the way in which the Bill was drafted. It interpolated the Bill and related it to 2,000 amendments to the Social Security Administration Act 1992. That was most welcome and most appreciated. However, those in the world at large who have to construe the Bill will not have the benefit of advice from the Minister's private office explaining how that should be done. We should think about the difficulties we create by such an acrostic method of legislation.

We should consider the many questions that are raised by the use of such powers. First, we should consider to whom the information is to be made available. Misgivings have been expressed about how widely disseminated within the Department of Social Security the information will be. Clearly, the more widely disseminated it is, the more risk there will be of its spreading outside its proper circle and being used for something other than its proper purposes. That relates again to the question of the purpose for which the information can be used.

In common with other noble Lords, I have recently been reading obituaries of the late George Carman. The name of Gillian Taylforth comes to mind. She supplied information in good faith, as by law bound, to the police but found that information on the front page of the Sun. I remember a case during the previous Parliament of a Member of Parliament who was found unconscious and drunk in Great Smith Street. The police took no action and laid no charges, but details of the episode were found in the pages of the Daily Mail. Clearly, there is always the possibility of information, especially if it is scandalous, being disseminated in quarters and for purposes for which it was not designed. I should be happier if there were a

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reservation in the Bill banning the use of the information for purposes other than that of fighting benefit fraud.

On what grounds will the information be required, and of whom? I have no objection to the phrase, "reasonable ground for suspicion", and take the Minister's points on that. But when we look at page 2 of the Bill, the question arises, suspicion of what? That needs a little more thought than has so far been given to the matter. If we look at what will be new subsection (2C) on page 2, we see that it says that information may be required if there are reasonable grounds for suspicion that,

    "a person ... has contravened, is contravening or is likely to contravene provisions of the relevant legislation [or] ... has committed, is committing or is likely to commit a benefit offence".

That reminds me of my old childhood example of the children before a juvenile court who were prosecuted for loitering with intent to press button B. The magistrates very properly threw it out. We cannot get the proof of something that is in the future. The criminal law is not in the business of weather forecasting, and as soon as it goes into it, it becomes as unreliable as the weather forecasts are already. That is no fault of the weather forecasters; we live in an unpredictable climate, politically as well as meteorologically.

But what worries me most is paragraph (c) of the new subsection. Information may be required of,

    "a person belonging to any description of persons who are more likely than others to fall within paragraph (a) or (b) above".

I heard the Minister say that that cannot be used on grounds of race or gender. She is correct and I am glad she said that. But I imagine the Minister will agree that, though it is illegal so to use it, there is little doubt that it will be so used in practice. Those doing it may be unaware that they are doing it, which is part of the problem of institutional racism, or will dress it up so that it does not appear that they are so doing. It happens in all quarters. As I heard Commander Grieve admitting on "Newsnight" last night--he is a man whom I would treat as an extremely good, reliable and responsible source--it would not be illegal to use that paragraph on grounds, for example, of sexual orientation.

The Minister mentioned previous offences. But that offends the basic common law principle of presumption of innocence. If we go after people because they have committed previous offences, we get into the area of hunting people because of what they have done in the past, and there is then the real danger of a vendetta. I hope that the Minister will think for herself and take that out voluntarily before I have to table an amendment on it. She has a great deal of sense; I think she may.

Liberty raised the question of compatibility with the European Convention on Human Rights. I am not a lawyer. I shall not give a verdict on that. But it appears to me to be the case that under Article 8.2 of the convention, the question to be addressed is whether the remedy is proportional to the mischief. It seems to me possible that the greater the degree of safeguards in

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the Bill, the greater the likelihood that the court will find that the remedy should be proportional to the problem. That is an amateur opinion. The Minister will no doubt be able to obtain expert advice, from behind her as well as from other quarters, and I shall listen to that with interest.

Again, the question arises as to who may be added to the list of those from whom information may be required. Under subsection (3) on page 3, we see that "any person" may be added. That is a little sweeping. I heard the Minister's reassurance about the CAB and was extremely grateful for it. But the Minister must realise that, like the Pope, she cannot bind her successors. Any future Minister in her position may well give a different answer. That is the trouble with leaving unexploded vires lying about in statutes. As far as I can see, that provision could perfectly well be used if a paper ran a story on social security fraud--as papers do from time to time--to require an editor to reveal his sources. If that is not so, I shall be extremely grateful to be told that it is not; and to be told why it is not. The question may be worth pursuing.

Some practical points arise from the Bill. It has been alleged in the press that the Data Protection Registrar has misgivings about this Bill. I shall be glad to know whether that is actually the case. If it is, on what grounds? And what efforts have been made to allay those misgivings?

I am interested in the point made by the National Housing Federation on the question of how far the landlord is responsible for reporting change of circumstance. That is, as I understand it, a complicated "horses for courses" situation depending largely on who receives the housing benefit. But clarification is needed and, since it is not clearly understood by those who will be affected by it, such clarification will be extremely welcome. The whole question of treatment of change of circumstances in housing benefit law needs much thought.

Then we come to the remedies suggested by the Minister under this Bill: first, disentitlement to benefit. Clearly there must be punishment for fraud and that punishment must be sufficient to deter. But in my scale of consequences, disentitlement is arguably a more severe punishment than imprisonment. I wonder therefore whether it is exactly proportional. I can see a strong case for imprisonment. But leaving people with no visible means of subsistence is something which the Minister knows, and has known for a long time, gives me profound misgivings.

What if the person concerned belongs to a category which is in no good position to do anything about it? Suppose it is a woman who left home because of domestic violence. Women in that situation often do not have their records in particularly good order. Or suppose it is a recent ex-prisoner, immediately discharged; a person with a criminal record--that is tautological--and therefore knowing, if they are destitute, where they can go to do something about it. It is not a good idea to draft legislation with the purpose of leading us into temptation. That is done enough by the forced circumstances anyway. We do not need to do it any more.

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We also need to consider--the Minister knows it is crucial to us on these Benches--what monitoring will be done of the consequence of depriving people of benefit; in particular, whether the Government will monitor, first, conviction rates of those disentitled to benefit against those of others in a similar economic position; secondly, the death rates of those disentitled against those in a similar economic position; and, thirdly, the rates of hospital admission against those in a similar economic position. We need to consider how far that may be properly done by delegated powers.

I leave the Minister with one final point relating to the exchange of information with overseas governments. I would welcome a categorical assurance that under no circumstances will anybody who has applied for political asylum have information about them made available to the governments from which they asked that asylum. We have a great deal of work in front of us. But that is all I wish to say at the moment.

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