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Lord Macdonald of Tradeston: My Lords, let me be clear. The relationship of the report back was never for an approval of the bidder. If the noble Lord checks what I said in the debate, he will find that that is clear. We said that we would undertake the process that the noble Lord, Lord Brabazon of Tara, strongly encouraged to try to spread a broader understanding of what we were trying to achieve and to give the Government time to listen and make any amendments that might be beneficial to the operation of the PPP as we went forward. We are doing that. Were the timing to be such that the selection of a preferred bidder came before my report back, of course I would welcome that, but it has never been conditional.

On Question, Motion agreed to.

Social Security Fraud Bill [H.L.]

3.34 p.m.

Report received.

Clause 1 [Additional powers to obtain information]:

The Parliamentary Under-Secretary of State, Department of Social Security (Baroness Hollis of Heigham) moved Amendment No. 1:

The noble Baroness said: My Lords, I shall speak also to Amendments Nos. 15, 16, 20 and 21. I hope that noble Lords will feel able to accept the amendments, which would enable investigators to obtain information about the identity of a person solely by reference to their telephone number or electronic address.

Our area benefit reviews show that fraud involving working and claiming cost nearly 300 million 1999-2000. It is the largest cause of fraud against the social security system. Working and claiming is most likely to

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occur in areas of employment where the hours are sufficiently flexible for a person to be able to attend the job centre to sign on, where a person is in and out of work over short periods, where work is seasonal, where earnings are erratic and where compliance with requirements such as VAT and income tax regulations is also erratic.

As we said in Committee, we already conduct investigations from time to time to flush out people who are committing fraud in such employment. For example, we have teams investigating gangmasters, who organise the employment of casual workers in the agricultural industry, such as pickers and packers. Almost 20 per cent of the agricultural workers investigated in the fraud drives in Lincolnshire had been committing benefit fraud. That is one in five.

Some groups of casual and self-employed workers advertise their services in newspapers and shop windows quoting only a telephone number. They include window cleaners, gardeners, hairdressers and builders. I am mindful that, as the noble Earl, Lord Russell, says, if I keep referring to window cleaners, there will not be any left in the country, so I have tried to find others with similarly erratic modes of employment.

By advertising by telephone number only, such people are able to evade inquiries under existing powers. We have no way of identifying them. We do not have the power to ask a telecommunications provider to tell us who owns a particular telephone number, yet we know from the evidence that we have picked up that quite a high proportion of those people are likely to be committing some form of benefit fraud.

Amendment No. 16 would allow us to do that. I pay tribute to my noble friend Lord Grabiner, who first highlighted the value of obtaining such information in his report on the informal economy. In chapter 5, he said that giving fraud investigators the right to reverse search telephone number databases would be a valuable extension of their powers. It would be a valuable tool for Inland Revenue investigators in particular, who would be able to follow up advertisements for goods and services that gave a contact number but no personal details, for example in local newspapers and newsagents. They could check whether a person who subscribed to a given number was registered for tax or was claiming benefit.

We are not talking about fishing trips. We would still need reasonable grounds for making the inquiries. Although the provisions in new Section 2C would not apply to the amendment, the provisions that already govern inquiries to employers would still apply. The provisions would be inserted in Section 109B of the Social Security Administration Act 1992, which provides that the powers may be used only when it is reasonable in relation to explicitly set out purposes, which can cover whether the benefit is paid, investigating and detecting benefit offences and contravening social security legislation. The Bill would not allow us to check a telephone number simply because it appeared in an advertisement. It would have to be an advertisement for a service that is at risk of

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fraud. To establish that, we would consider the issues that I mentioned earlier, such as seasonal factors or whether the service provides opportunities to nip out and sign on.

I emphasise that the powers would not allow us to obtain information on the content of communications. They are only reverse search powers to establish the name of the owner of the phone number. Obtaining information on the content of communications would be very intrusive and would not be reasonable, although, given the changing nature of the communications world and the sensitivities around the content of communications, we thought that it would be inappropriate to rely only on the test of reasonableness.

We wish to make it unequivocally clear that the powers could never be used to obtain information about the content of a communication. Amendment No. 15 would achieve that by limiting us to communications data, except for traffic data. I hope that your Lordships will recognise that we are honourably limiting the point to which the powers can be taken. I refer noble Lords to Section 21(4) of the Regulation of Investigatory Powers Act 2000, in which the definition of "communications data" contains the words,

    "which includes none of the contents of a communication".

The other amendments--Amendments Nos. 20 and 21--tidy up the references in the Bill to telecommunications.

In conclusion, these amendments will enable us to obtain the identity of persons who advertise their services by telephone. That will enable us to detect and prevent people working and claiming benefit, which constitutes the largest area of fraud. The powers could be used only where we had reasonable grounds. They are akin to the powers which we already have to obtain information from employers. They could not be used to obtain information about the content of telephone calls or about the person to whom a call is made. Therefore, I hope that noble Lords will welcome the amendments, which, as I say, are strictly circumscribed. I beg to move.

Lord Astor of Hever: My Lords, we on these Benches are grateful to the noble Baroness for explaining so clearly this group of amendments. We welcome the amendments, which tidy up the definition of the telecommunications services. We believe them to be practical and useful. However, we wonder whether the Government's zeal for clarity has made the insertion of new subsection (2F) somewhat redundant, given that the phrase "communications data but not traffic data" in new subsection (2E) would in any case provide for new subsection (2F). This is not an important point, but I mention it in passing.

We are pleased that the definition has made it clear that only communications data and not traffic data are to be requested by the DSS for its inquiries. Dispensation of traffic data seems to be an excessive invasion of privacy when evidence of fraud could be obtained in other ways. This new definition assists the

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balancing act between the privacy of the individual and the need to access information as part of official inquiries.

Earl Russell: My Lords, I believe that Amendment No. 16 has great elegance. It meets a real and genuine need and, so far as I can see at present, it appears to attempt to do so in a constructive way. Next time the Minister has to defend it, she may see fit to quote Sherlock Holmes's maxim that,

    "Honest men do not conceal their place of business".

If she wants to give window cleaners a rest, she might try tree fellers.

Baroness Hollis of Heigham: My Lords, I am extremely grateful for that hint, but I am not sure whether tree fellers will be. However, I appreciate it. I am grateful to the House for welcoming the amendment and the reassurances that I have been able to give.

With regard to the algebra quoted by the noble Lord, Lord Astor, I am assured that those words are both appropriate and necessary. However, if he wishes to follow up the matter, that can be done through correspondence. With that, I ask the House to accept the amendment.

On Question, amendment agreed to.

3.45 p.m.

Lord Higgins moved Amendment No. 2:

    Page 2, leave out lines 22 and 23.

The noble Lord said: My Lords, this amendment stands in my name and that of my noble friend Lord Astor of Hever. As your Lordships will see, the amendment seeks to eliminate from the list of people from whom the Government can ask for information,

    "any servant or agent of any person mentioned in any of the preceding paragraphs".

We had a brief discussion about this in Committee. As on previous occasions, the noble Lord, Lord Grabiner, was extremely helpful in providing us with definitions of what "servants" or "agents" might be. Indeed, in subsequent correspondence, the noble Baroness gave rather more pedantic definitions which, none the less, are helpful. We are grateful to her for those.

I believe that it may be helpful if at this stage in the proceedings I say a word or two about the other extremely helpful action which the noble Baroness has taken; namely, to provide the House not only with an amendment which incorporates into the Bill the code of practice which will govern many of these clauses but also a draft of the code itself.

We shall come to a later amendment on which we shall be able to debate the code of practice. However, it may be helpful to refer to it at various points during the course of our deliberations this afternoon. I certainly do not intend to weary the House by referring to it both on an amendment to which it is relevant and when we come to debate the code as a whole, but I believe that it will be helpful to proceed in that way.

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So far as concerns this amendment, paragraph 4.4 on pages 12 and 13 of the code of practice deals with this particular point. It is a question not only of whether it is appropriate for the Government to be able to ask the principal involved in any transaction for information about an individual who is suspected of fraud but also whether it is appropriate for them to ask for such information from the person's servant or agent.

The only reason that I return to this point at this stage is that I am a little puzzled as to what in practice the Government have in mind. The code of practice states that authorised officers should only address inquiries to an individual directly--that is, to either a servant or an agent--where it is not possible to identify the corporate body. I am not sure whether the officers are clear as to who the corporate body is, how they will know who the agent is or, in particular, who the servant is. If they are clear that the person in question is a servant, presumably they must know who employs that person.

In a helpful letter the noble Baroness said that the person may be an agent; for example, a newsagent may deal with money transactions and would be the agent of another financial organisation. However, again, I should have thought that it would be possible simply to return to the principal. I have a vague feeling at the back of my mind that, given that presumably a relationship of confidentiality exists between the agent and the principal, it would be undesirable for the Government to go to the individual concerned. Certainly, so far as concerns employees, if an employee were being awkward in not providing information, it would seem very odd for the Government to take action against him directly rather than against the company, which they can in any case ask to provide the information. I beg to move.

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