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Lord Astor of Hever: I thank the noble Baroness. We have had a number of letters on this point. I shall be grateful for a follow-up letter, as the noble Baroness has suggested.

Baroness Hollis of Heigham: My understanding is that there is no impingement, but I shall check and make sure that that is correct and write to the noble Lord more fully so that I may specify what overlap there is, if any, or any degree of calibration which may be needed between the two bodies.

The noble Lord's second concern was intentional abuse and whether we need to use electronic access at all. At the core of the matter is whether obtaining information online from bodies which already hold it electronically is cheaper, quicker and less burdensome than obtaining it through correspondence. One credit reference agency advises us that it would charge 1 per online inquiry, as opposed to 10 per written inquiry; in other words, it is cheaper to use a computer than employ someone to answer a question. If there were concerns about doing it in writing, that would add to the delay. Electronic access is much speedier, and I believe that it is also a useful safety check.

I should like to reassure the Committee that an authorised officer may obtain only online 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 would not be allowed under these provisions. Therefore, there could not be unintentional abuse, because one could obtain by electronic access only information that one could obtain in writing. One is concerned solely with the mode, not a different kind of information.

The next point is the possibility of deliberate or intentional, as opposed to accidental, abuse. All I can do is repeat the safeguards against abuse that we shall put in place. Officers who used these powers would require special authorisation from the Secretary of State. They would be located in a central unit in the department's administrative areas, and only a handful of officers would be authorised in each area. The individuals would be of executive officer grade and

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would be managed by a more senior person. They would receive thorough training under all modules of the Professionalism in Security programme.

We would give serious consideration to any additional training that private sector organisations wished to provide to people who used their services; for example, BT. Authorised officers would be required to make inquiries in accordance with a published code of practice and fully document their grounds for inquiries. That documentation would be subject to routine checking by managers. In other words, if anyone deliberately abused the access to databases we would know about it. As a result, we would follow it up with disciplinary action and, if necessary, sack the official concerned.

With regard to local authorities, the Bill recognises that there are differences in the safeguards which they might apply when making arrangements for electronic access, which means that they must obtain consent from the Secretary of State. Again, we are involved in training issues. If necessary, I can provide information about how we intend to train officials. However, I do not believe that the noble Lord requires that information this afternoon. I shall respond to the noble Lord in detail. My understanding is that there is no overlap with issues to do with the e-commerce envoy, but I shall check the position and ensure that the noble Lord is made aware of it by way of a letter in the Library. There should not be unintentional abuse because one can obtain by electronic information only that which one can obtain under Clause 1 in writing. As to intentional abuse, the safeguards that I have listed two or three times should be sufficient. I realise that this may be a source of concern. However, in the light of my response I hope that the noble Lord is able to agree Clause 2.

Lord Astor of Hever: I am grateful to the noble Baroness for her full answer. As to the first point, I look forward to receiving a letter, a copy of which is to be made available in the Library. We shall consider carefully the other points that the Minister raises. We have received a number of approaches from Liberty and the Scottish Law Society. We shall discuss this matter with them and consider the position.

Clause 2 agreed to.

Clause 3 [Arrangements for payments in respect of information]:

Lord Astor of Hever moved Amendment No. 60:

    Page 7, line 16, leave out from ("that") to ("in") in line 19 and insert ("arrangements are in force for requiring the making of payments to cover costs").

The noble Lord said: In rising to move Amendment No. 60, I should like to speak also to Amendments Nos. 61 and 62. Amendment No. 60 is a probing amendment to clarify how far the Secretary of State is prepared to go to reduce the very substantial costs to business occasioned by the Bill. The amendment seeks to tighten the loose provisions in the Bill for the recovery of costs incurred by companies as a result of the provision of information. The new wording would make such payments mandatory rather than merely

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discretionary and ensure that payments accurately reflected the real cost to industry of providing information.

The Minister partially addressed the issue of cost in responding to Amendment No. 8. However, she said that it was not appropriate to make payments for bulk information requests. The point requires some clarification. As the Bill indicates at least a willingness to contribute to cost recovery by companies, perhaps the Minister can clarify for what the Government envisage paying. Logically, the response of the Minister during consideration of Amendment No. 8 suggested that utilities might--but only might--receive payment for any new software systems that they developed in order to provide bulk information to the Government. However, they will not be compensated for the provision of any bulk information the cost of which is as yet unknown to those companies. I look forward to receiving clarification from the Minister. I beg to move.

4.15 p.m.

The Deputy Chairman of Committees (Baroness Lockwood): I must point out that, if this amendment is agreed to, I cannot call Amendment No. 61 under the pre-emption rules.

Baroness Noakes: In rising to speak to Amendment No. 60, I should like to refer particularly to Amendments Nos. 61 and 62 in my name and that of the noble Earl, Lord Russell. The amendments are similar in intent; namely, that the Secretary of State should make payments to those who provide information under the new powers created by the Bill. The difference is that Amendments Nos. 61 and 62 are more specific as to who should be paid and how much. I should like to explain why I believe that greater specificity is desirable.

As to Amendment No. 61, Clause 3 is quite restrictive in terms of who can be paid, not only in relation to the bodies listed in paragraphs (a) to (f) of subsection (1) which notably exclude banks, credit businesses and insurance companies. Even if one is in that list one gets paid only if the Secretary of State believes that it is appropriate. There are further restrictions, to which my noble friend Lord Astor referred, in respect of bulk information provided by utility companies under Clause 3(2). Amendment No. 61 seeks to bring all the bodies which may be subject to a request for information within the scope of reimbursement.

By their own estimates the Government stand to gain between 200 million to 400 million by the enactment of the Bill. In so doing they will impose new regulatory burdens on those who are likely to need to provide information. Banks, credit businesses and insurance companies, all of which have expressed willingness to assist with the implementation of the Bill, do not understand why there is not even a possibility of payment under the proposed legislation. One must put that in context. According to the regulatory impact assessment, 390,000--or 44 per cent--of all inquiries will be made to banks and

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insurance companies and another 95,000 will be made to utility companies. They cannot understand why they should not be reimbursed for anything beyond bulk information.

The Minister explains that the intention largely is to pay those whose business it is to provide information and not others, but I do not believe that that is a general principle. For example, there are provisions in the recently enacted Regulation of Investigatory Powers Act to pay for communications data. Arrangements are in place for that purpose, notwithstanding that the data are already held by those organisations. I do not believe that it is a general principle which should guide the reimbursement provisions of the Bill.

The regulatory impact assessment says that the extra cost to business is between 2.5 million and 7.6 million. That is another puzzle. Why are the Government concerned about such a relatively small amount in the context of the public expenditure totals of the DSS? A number of those who have looked at this part of the Bill have genuine concerns that the cost to business will be considerably in excess of the stated figure. If it is a larger sum, it increases the case for reimbursement. A number of those who have commented on this matter find it difficult to estimate the cost because, in the absence of a draft of the code of practice that has been referred to, in practice it is difficult to work out what the burdens upon them are likely to be. Amendment No. 61 is about widening the scope.

Amendment No. 62 is intended to make more specific the payment of the reasonable costs incurred by those who respond to requests for information, not the amount that the Secretary of State believes is appropriate. I accept that, even with that amendment, the big question that remains is: what is the cost? Is it short-run or long-run marginal cost? Does it include the opportunity cost of capital?

I am not seeking answers to those questions today because they would be better answered by some form of guidance. I seek to probe whether or not the Government will look at Amendments Nos. 61 and 62 and provide a fairer balance between what the state understandably is trying to achieve in terms of stopping massive benefit fraud while relieving the burdens on business.

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