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Lord Higgins: Perhaps I may deal, first, with the point raised by the noble Lord, Lord Goodhart. Now that I look at the amendments and the way in which they interact, it seems to me a rather good way of proceeding. Perhaps one should consider adopting as normal practice that a Bill should not come into operation until the statutory instruments authorised by the Bill have been considered. No doubt there would be problems with that. I accept fully what the noble Lord, Lord Goodhart, said.

The noble Baroness said that at Report stage we would have a draft of the code of practice. We welcome that. It is a sensible way of proceeding; goodwill will

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flourish and we shall do what we can to improve matters. However, I was slightly puzzled when she said that the House will have a draft of the code of practice at Report stage but the Information Commissioner will not receive it until it is final.

Baroness Hollis of Heigham: No. Perhaps my remarks were obscure. I was taking it for granted that, like other people, the Information Commissioner would be commenting on the draft. The final report--which is the framework within which the Information Commissioner would seek to scrutinise subsequent DSS activity--would be laid before her.

5.15 p.m.

Lord Higgins: I now understand. Again, that is a sensible way of proceeding. It would perhaps be helpful if the noble Baroness could comment on two points. It appears that the code will cover only Clause 1 and Clause 2, which deals with electronic access to information; it will not cover any of the other aspects--for example, colluding employers--which, no doubt, will have to be dealt with on the face of the Bill.

The Minister also opened the door a little towards saying that one might consider whether some of the items one could put in the code of practice should not be put on the face of the Bill. Again, that is something we shall need to consider.

Baroness Hollis of Heigham: I said that I was willing to reflect on the matter--partly in response to pressure from the noble Lord, Lord Goodhart. At the moment, the code of practice exists only in so far as I have stated. I have said that I am willing to come back with amendments to say that there will be a code of practice on the face of the Bill, which then gives it statutory authority. That is sometimes done, it is sometimes not done. If it is satisfactory to the Committee to give it that basis, that may be helpful. Obviously, matters such as colluding employers raise completely different issues from those connected with data protection, with which the code is associated.

Lord Higgins: That is extremely helpful. We shall seek to co-operate. I have said throughout that we are as anxious as the Government to prevent fraud--if not more so. The side effects of the proposals are difficult, in particular the question of whether there should be some degree of supervision over the department in deciding whether a particular case should be investigated. We need to consider that further, not least in the light of what the noble Baroness said about the heavy end of the market as against the light end and so on.

We look forward to seeing the draft. We should perhaps consider the timing. Obviously, the sooner we can see it the better. I assume it must already be in draft. We should also consider whether some time should elapse between Report stage and Third Reading in order that any outside representations we receive can be taken into account in the subsequent discussions on the code.

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The Minister is being very forthcoming and we are anxious to ensure that the matter is dealt with in a reasonable manner. I am sorry about Amendment No. 102--which drew such scorn from the noble Lord, Lord Goodhart--but we cannot have everything. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 64 not moved.]

Clause 4 [Exchange of information with overseas authorities]:

Lord Astor of Hever moved Amendment No. 65:

    Page 8, line 21, leave out ("it appears to the Secretary of State") and insert ("the Secretary of State is satisfied").

The noble Lord said: In moving Amendment No. 65, I shall speak also to Amendment No. 66. Amendment No. 65 probes the standard of satisfaction which must be achieved before the Secretary of State would exchange information with overseas authorities. Clause 4(1) specifies the conditions which must be in place before the Secretary of State can disclose information to an overseas authority. At present, it is sufficient if it "appears" to the Secretary State that adequate safeguards are in place to prevent any improper use of information. We believe that these provisions are of sufficient importance that the Secretary of State should be "satisfied" that the requirements of that subsection have been fulfilled.

Amendment No. 66 ties in with the two earlier amendments relating to a code of practice and standards. Clearly, the reliability of any information received from another jurisdiction will vary. Ministers should explain what they intend to do to ensure the reliability of information, and on what basis they will rule out, or rule in, information with regard to a particular jurisdiction. What information will be given, or will not be given, to authorised officers about the reliability of a particular source? How will that information be reviewed; and how will its quality be tested? I look forward to the Minister's response. I beg to move.

Baroness Fookes: I strongly support the amendment. It is a matter for concern that security should be satisfactorily achieved when other countries are involved over which we have no jurisdiction. Therefore, this proposal is particularly important.

Perhaps I may briefly hark back to the code of practice. As I understand it, the code of practice will relate only to Clauses 1 and 2. I should have thought it entirely reasonable that it should relate also to Clause 4, dealing with the exchange of information with overseas authorities.

Baroness Hollis of Heigham: I have quite a full answer to this amendment; as this is a technical issue, perhaps Members of the Committee will bear with me. I could merely address the direct points, but it may be useful if I set out some of the background.

Both amendments relate to Clause 4, on the exchange of information with overseas authorities. Amendment No. 65 is about the standard of

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satisfaction that must be achieved before the Secretary of State would exchange information with overseas authorities. Amendment No. 66 seeks to substitute the word "necessary" for the word "reasonable" in new Section 155A(3) which the Bill would insert into Part XIII of the Social Security Administration (Northern Ireland) Act 1992. The clause requires all reasonable steps to be taken to secure that information obtained from another country is not used for any purpose not authorised in the understanding to exchange information with the other country.

Of all the clauses in the Bill, Clause 4 has attracted the least amount of comment and the greatest degree of support in our public consultation exercise. Transnational benefit fraud is a serious problem. It is sufficiently serious for the Council of the European Union to pass a resolution on 22nd April 1999 on a code of conduct for improving co-operation between authorities of member states concerning the combating of transnational social security benefit and contribution fraud and undeclared work, and the transnational hiring out of workers. But it is difficult to say how serious, as we simply do not have the information we need to see the full implications. We know from the cases that come to light that many are organised and involve large sums of money--for example, the gang who hijacked the identities of 171 Irish citizens to make false claims. I mentioned this case at Second Reading. The problem is not peculiar to the UK and Ireland. The German and Dutch authorities are concerned about the problem of people claiming unemployment benefits in one country while crossing the border daily to work in the other.

What this clause is not about is cracking down on asylum seekers, who are in any case now supported by the new Home Office arrangements and not the benefit system. I repeat the categorical assurance that I gave earlier that the powers in this clause would not be used to pass information about a person seeking asylum in the UK to the government of the country from which he had fled.

The Information Commissioner has an important role in this, in that she participates in the work of the "Article 29 Committee", set up under the EU data protection directive to advise on data protection issues arising at a European level. The committee's recent work includes consideration of the level of personal data protection in certain non-EEA states to produce an approved list. We should not consider entering into an arrangement to exchange data with any country that did not meet with her approval. That is a strong statement.

We envisage that such exchanges would be with a limited number of countries, where there was evidence that transnational benefit fraud could exist. This is likely to be our near EU neighbours, in particular Ireland--geographical proximity clearly increases the scope for cross-border fraud--and countries outside the EU with which we already have a close relationship.

A Memorandum of Understanding between the government of the United Kingdom and the overseas government would govern any arrangements that we

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enter into. The process of agreeing the terms of that understanding would provide ample opportunity to explore safeguards. Any document prepared for UK signature would have been closely examined by lawyers not only at the DSS, but also at the Foreign and Commonwealth Office, who will have close regard to human rights and data protection issues. We would not enter into any arrangements with any country that did not have adequate arrangements in place against improper use of information, or due regard to human rights. We would take into account all relevant information: the character of the regime, the administrative safeguards as well as the legal ones, and the political relationship between our countries, to name but three. We clearly would not enter into a relationship with any country that did not have a stable democratic system of government, and we would terminate any existing arrangement if circumstances changed for the worst. Again, that is a very strong statement.

We have already agreed a Memorandum of Understanding with Ireland on closer co-operation to combat transnational social security fraud. The measures in the Bill would provide the legal basis for the DSS to disclose information to the Irish Social Security Department. However, we would not use these measures until the Irish Government had also secured legislation. The text of this memorandum is publicly available. Any other such arrangements would also be made publicly available.

What we cannot do under existing powers, which is why we are seeking to include this clause, is to exchange information in bulk. What we seek to do, when the enabling legislation is in place in both the UK and Ireland, is to match our entire social security live load to pick up the people who are claiming in both jurisdictions--or appearing to do so, as many may be the victims of criminals who appropriate the identities of innocent citizens to make false claims.

In practice, this data matching will almost certainly be done in England by the DSS's data matching service, which has the infrastructure and expertise to do so. It would thus be covered by the DSS Code of Practice on Data Matching, which has been endorsed by the Information Commissioner. Indeed, she wrote the foreword, in which she stated:

    "I am pleased to report that since welcoming the first edition a year ago I have received only a very few enquiries about the Department's data matching exercises. In other words, the code seems to be achieving two twin goals of setting out for DSS staff the standards that they must follow, and of explaining to benefit claimants the nature of the checks that are carried out and the safeguards".

So there is praise and support from the Information Commissioner on the code that currently governs the situation.

When one country decides to provide information to another, it does so on a voluntary basis. In so doing, it may wish to place restrictions on the use to which that information can be put. Our understanding with Ireland specifies that information about an individual which one authority transmits to another will be used

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exclusively for the purpose of administering social security legislation. As Members of the Committee can imagine, there are particularly sensitive issues around the uses to which information that passes between Northern Ireland and the Republic could be put. We are well aware of some of the complexities, as are Members of the Committee.

For it to appear to the Secretary of State that suitable arrangements are in force to allow exchange of information, he must first satisfy himself that that is the case. I hope that, given this full answer--which I thought it important to place on the record--I have reassured the Committee that we are not about to hand over our social security records to Saddam Hussein. Therefore, I urge the noble Lord to withdraw his amendment.

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