Joint Committee On Human Rights Third Special Report


APPENDIX 8

Letter from the Secretary of State for Social Security to the Chairman of the Committee

SOCIAL SECURITY FRAUD BILL

  Thank you for your letter of 14 February. You have asked for my comments in four areas:

    (1)  Access to information and sharing information.

    (2)  Disclosure to overseas authorities.

    (3)  Penalties by way of reduction in benefit.

    (4)  Details of representations that I have received in connection with the Bill in relation to human rights issues.

  I should like to take each of these points in turn.

  However, first of all I should like to make it clear that we have scrutinised all of the provisions in the Bill to determine whether they were in accordance with the European Convention on Human Rights (ECHR) during the development of the policy and the drafting of the Bill.

  You should also be aware that the information sharing measures of the Bill have been amended by Government amendments at the Lords Report Stage of the Bill, on 27 February. I have enclosed the latest draft of the Bill, which no longer contains provisions to obtain information about people in groups more likely than others to commit fraud, and also includes provision for a statutory Code of Practice for the measures in clauses 1 and 2 of the Bill. The Bill now allows us to require information only in respect of individuals about when we have reasonable grounds for suspecting fraud.

  I now deal with the points raised by the Committee's legal advisor. (References to the Bill are to 28 February print as amended at Lords Report.)

1.  ACCESS TO INFORMATION AND SHARING INFORMATION

  You have raised the following questions:

    (a)  are we satisfied that clause 1 would meet the requirements of Article 8.2 of the ECHR, that any interference with a right under Article 8.1 should be in accordance with the law;

    (b)  what safeguards there will be to ensure the powers in the bill are not abused; and

    (c)  are we satisfied that the process for identifying "descriptions of persons" in relation to clauses (2c)(c) and (d) of the Bill would comply with the requirements of Article 14 taken together with Article 8 of the ECHR.

(a)  Clause 1 and compliance with Article 8

  Clause 1 of the Bill would provide for officers authorised by the Secretary of State or Local Authority Chief Executives or Finance Officers to require information from the persons listed in new section (2a), eg banks and building societies. Information can only be obtained about identified persons, or a member of their family, where it appears to the officer that there are reasonable grounds for believing that the person has committed, is committing or intends to commit a benefit offence.

  Clause 1 would also provide for officers, specifically authorised by the Secretary of State, to obtain information from utilities providers more generally about the quantity of services supplied to residential properties. This information could be matched against social security records to identify potential fraud—for example if an address, which a person was claiming from, did not consume electricity, it would be unlikely that the claimant was in fact living at that address.

  Finally clause 1, as amended at Lords Report stage would no longer enable us to obtain information about people more likely than others to commit fraud. However, a new provision has been included at new section (2f) that would enable us to obtain information about the identity and postal address of a person solely by reference to their telephone number. This will in effect enable us to reverse search the telephone directory, as the Inland Revenue and Her Majesty's Customs and Excise are already able to do. We need such a provision because there are many people that advertise casual forms of self employment which have provided significant scope for committing benefit fraud simply by providing a telephone number. If we had noticed an increased incidence of fraud from say plumbers in a particular locality we may want check on plumbers' adverts in local newsagents or newspapers giving telephone numbers only. The only way to identify people who advertise their services this way and see if they are in fact claiming whilst working is to seek details of their identity from their telephone service provider.

  Article 8 states that everyone has the right to respect for his private and family life, his home and his correspondence. It also allows for restrictions to be placed on these rights where those restrictions are prescribed by law and are necessary (among other reasons) for the prevention of crime and in the interests of protecting the economic well-being of the country. The convention also requires that the legislation must be sufficiently precise for those whose rights are affected to understand how the legislation will affect them.

  The provisions in clause 1 pursue both the aims of preventing crime and protecting the economic well being of the country. Social Security fraud costs at least £2 billion a year. The provisions will be sufficiently precise when taken together with our publicly available code of practice, which we always intended should accompany the legislation. You will note that clause 3 of the amended Bill now provides for a statutory code of practice. It provides that the code shall be issued after consultation, and that the final version of the code be laid before both Houses of Parliament. Authorised officers would be required to have regard to the code when exercising the powers in clause 1. I have enclosed an early draft of the code. This is still a very early draft and is subject to further consultation with the relevant sectors of business and others such as local authorities and the Information Commissioner.

(b)  What safeguards will there be?

  You also raised the issue of what safeguards there will be to ensure that the powers in the Bill are not abused. Clause 1(2), new section (2c) required that an officer could only require those listed in new section (2a) to provide information about someone if there are reasonable grounds to believe that he is or may be one of the persons listed. This has now been amended to clarify that the powers can only be used where the authorised officer has reasonable grounds for believing that the subject of an enquiry is a person who is "a person who has committed, is committing or intends to commit a benefit offence" and a person who is a member of their family. The Code of Practice explains more about what constitute reasonable grounds. In particular, an officer could not use the powers unless he has cogent evidence that fraud has occurred. Also, the powers could only be used if the officer has checked any apparent discrepancy with the claimant and received an unsatisfactory answer, unless in the particular case there are reasons which make checking with the claimant inappropriate—for example, where alerting the claimant might prejudice the investigation.

  You raised some concerns about the provisions to obtain information about a person's family. The definition of family that we have used in the Bill is the definition in the Social Security Contributions and Benefits Act 1992 that is used for assessing benefit. It relates only to the members of a person's household and then only extends to their partner and any dependants that they or their partner are responsible for. We need to be able to obtain information about these members of a person's family, as their circumstances are directly relevant to a person's benefit. For example a partner's earnings may affect whether a person is entitled to benefit and how much they are entitled to. And a person is not entitled to receive child benefit if their child is over 16 years of age, but not in full time education.

  The Code of Practice also provides some background on the safeguards that will come into play in implementing these powers. However, I should like to address some of the specific points raised in your letter.

  Types of information—the Bill does not contain specific limitations on the information that can be required. However, section 109b(1) of the Social Security Administration Act 1992, which the provisions in clause 1 amend, provides for an authorised officer to obtain information where it is reasonable for explicit purposes set out in section 109a(2) of the legislation. We can therefore only obtain information that would be pertinent to a person's claim to benefit.

  Prior Authorisation—there is no provision for prior authorisation of enquiries, but you will be aware that such a provision is not required by Article 8 if there are other safeguards to prevent misuse of the powers. The Bill provides that only authorised officers would be able to use these powers. In the DSS authorisation will only be given to a limited number of staff working in the Area Intelligence Units or the National Intelligence Unit. They will keep records of all their enquiries, which will be subject to regular random checks by DSS management. The Code of practice provides more information on who will be authorised to use these powers. Misuse of these powers is a criminal offence under section 123 of the Social Security Administration Act 1992, and may also be an offence under the Data Protection Act 1998 and the Computer Misuse Act 1990.

  Benefit Offences—your letter states a view that the safeguards for these powers are weakened by the possibility of requiring disclosures in respect of any benefit offence, however minor. The offences that are covered by the definition of "benefit offence" in the Social Security Administration Act 1992 all involve persons giving false information or failing to give information in order to receive benefits they are not entitled to (or to help others receive benefits they are not entitled to).

  There are serious offences, which is why the law provides for prison sentences as well as fines.

  Informing the data subject—there are no provisions in the Bill requiring the data subject to be informed about any enquiries, because the exercise of these powers will be subject to the provisions of the Data Protection Act 1998. These provisions require, in Part II Section 7, that "an individual is entitled:

    (a)  to be informed by any data controller whether personal data of which that individual is the data subject are being processed by or on behalf of that data controller;

    (b)  if that is the case, to be given by the data controller a description of:

      (i)  the personal data of which that individual is the data subject;

      (ii)  the purposes for which they are being or are to be processed; and

      (iii)  the recipients or classes of recipients to whom they are or may be disclosed".

  We will ensure that all benefit claims forms advise claimants that their information may be checked with third parties. Claimants who want to know what information the DSS holds on them can also request those details under the provisions for subject access requests in Part II, Section 7 of the Data Protection Act 1998. The DSS does not charge for providing this information.

(c)  Article 14 taken together with Article 8

  The provisions to obtain information from "persons more likely than others" have now been removed from the Bill. We will still be able to find out who telephone numbers belong to, using the more specific power that has now been included in the Bill. This is in line with powers already available to Inland Revenue and Customs and Excise.

2.  DISCLOSURE TO OVERSEAS AUTHORITIES

  You ask what steps I envisage being taken to secure compliance with the requirements of Article 8 of the ECHR in respect of disclosures to overseas authorities. In particular you ask whether the proposed arrangements will be sufficiently accessible, authoritative, determinate or enforceable, and what procedures there are for ensuring that disclosures are "necessary in a democratic society", as required under Article 8 of the ECHR.

  The provisions in this Bill should be read together with the obligations placed on my Department and the Northern Ireland Department by the Human Rights Act 1998 and the Data Protection Act 1998.

  New section 179a(1)(a) provides that only relevant information can be exchanged with overseas organisations and only where arrangements have been made for that exchange. Section 179a(2) then stipulates the purposes for which relevant information may be disclosed under these arrangements. We would make arrangements under these provisions for the exchange of information that would enable us to prevent and detect benefit fraud in the United Kingdom. Of course other countries provide social protection quite differently from the UK and their systems are open to attack in different ways. The provision therefore provides for flexibility in the arrangements for exchange, but is limited to purposes relating to or corresponding in nature to social security.

  These arrangements will be publicly accessible. We have already made an arrangement with Ireland for co-operation to combat transnational social security fraud. Both countries need to take legislation enabling them to exchange information to fulfil the agreement. However, the arrangement has already been made public by the issue of a press release when the Memorandum of Understanding was signed last October, and we will make any future arrangements public or revisions of arrangements public.

  There are also adequate safeguards to ensure that Article 8 is complied with. We will not enter into arrangements with another country unless we are satisfied that it provides an adequate level of data protection and respect for human rights. The arrangements are not binding in national or international law, so it is a matter for the Department whether it chooses to disclose information under this provision. Section 179a(1)(b) provides that information cannot be disclosed unless it appears to me that the arrangements and the law in force in the overseas country are such as to ensure that there are adequate safeguards in place against any improper use of the information. In doing so I would have regard to the decisions of the Information Commissioner, previously the Data Protection Commissioner, as well as the European Commission's findings under Article 25 of the Data Protection Directive about the suitability of those countries to receive information. It would be contrary to the Data Protection Act, and in particular the eighth data protection principle, to disclose information to a country outside the European Economic Area unless the Department was satisfied that it ensures an adequate level of protection for information. If we discovered that a country was misusing information, we would immediately cease any exchange of information.

3.  PENALTIES BY WAY OF REDUCTION IN BENEFIT

Compatibility with HRA

  You ask on what basis we concluded that the operation of clauses 6 to 8 of the Bill are compatible with the Convention rights, and in particular Articles 2 and 3.

  The essence of the provisions is that persons who are convicted of benefit fraud twice within a period of three years would, on second conviction, not receive payment, or receive reduced payments, of most social security benefits for a period of 13 weeks.

  We do not believe this would be contrary to either Article 2 or Article 3 of the Convention. Article 2 concerns the right to life, and Article 3 prohibits torture and inhuman or degrading treatment. However, the provisions create a "hardship scheme" to ensure that safety-net benefits (ie Income Support of Job Seeker's Allowance (Income Based) continue to be paid at a reduced rate to people who are particularly vulnerable: see clause 7(3), (4) and (5), clause 8(3) and (4), and clause 9(3), (4) and (5). The detail of the amount by which benefit will be reduced will be contained in Regulations. However, the Government's intention is that safety net benefits will be available at the same rates, and same circumstances, as currently apply in relation to other benefit sanctions, for example, Jobseeker's Allowance labour market sanctions. This means that the level of reduction will be 20 per cent of the personal allowance (£10.45 at current rates) for those in a vulnerable group and otherwise 40 per cent of the personal allowance (£20.90 at current rates). Regulations will also provide for Housing Benefit to be unaffected by the sanction where the claimant is entitled to a safety net benefit.

  We therefore consider that these new provisions are consistent with all our international obligations. There is no question that anyone will be left in a state of destitution because of these provisions. We therefore do not believe the power to remove benefit will cause any risk to life, or attain the level of severity necessary to amount to inhuman or degrading treatment. You will also be aware that the Convention does not create a general right to receive financial support from the state.

  Compatibility with European Social Charter (ESC) and International Covenant on Economic, Social and Cultural Rights (ICESC).

  You also ask on what basis we conclude that these provisions are compatible with the requirements of the ESC and the ICESC.

  Article 13(1) ESC places an obligation on Contracting Parties "to ensure that any person who is without adequate resources and who is unable to secure such resources either by his own efforts or from other sources, in particular by benefits under a social security scheme, be granted adequate assistance".

  Article 11 ICESC places an obligation on states to "take appropriate steps to ensure the realisation of the right of everyone to an adequate standard of living for himself and his family, including adequate food, clothing and housing".

  Under these articles, the United Kingdom is obliged to provide adequate assistance to those in need. As I have explained in the context of ECHR, the provisions include a hardship scheme which will ensure that those without adequate other means will continue to receive a reduced level of a safety net benefit.

4.  REPRESENTATIONS WE HAVE RECEIVED IN RELATION TO HUMAN RIGHTS

  You ask what representations we have received in connection with the Bill in relation to human rights.

  We published a consultation document on the information sharing provisions of this Bill in July last year—"Safeguarding Social Security: Getting the Information We Need". We received 65 responses. A summary of the responses was placed in the House library on 19 December 2000 and copies of individual responses are available from the DSS Public Enquiry Office. Of the 65 responses, 15 commented on human rights. Comments varied from concerns that institutions might be open to human rights challenges if they disclosed information under these provisions to far more detailed comments on compatibility by the then Data Protection Commissioner. The majority of responses merely noted that the powers would need to be compatible with the Human Rights Act and that the proposed Code of Practice and any guidance should ensure this. The specific points the representations were directed at were:

    —  the need for the legislation to be clear about compatibility with the ECHR;

    —  the level of suspicion required for the enquiries to be compatible with the ECHR;

    —  the potential for contravention of the ECHR where the subject does not consent to the enquiry;

    —  any legislation must be consistent with the ECHR;

    —  the code of practice and guidance should make clear why the powers would be consistent with the ECHR;

    —  concern that institutions may be open to challenge under the ECHR if they disclosed information;

    —  concern about whether the powers to obtain information from utility providers about quantity of supply and match them against DSS records to identify potential fraud would be effective and therefore compatible with the ECHR;

    —  whether the proposed interference is "necessary" as required by Article 8.2 of the ECHR; and

    —  whether the proposed safeguards were sufficient.

  Since the consultation exercise closed, we have held meetings with the Data Protection Commissioner, now the Information Commissioner, and her officials to discuss her concerns. Her main concerns were in:

    —  whether the legislation was sufficiently precise and accessible to be foreseeable in its consequences;

    —  whether the provisions to obtain information about a person falling within a particular category or likely to commit fraud made the provisions too wide or vague and whether they provide for a breach of Article 14; and

    —  whether safeguards are sufficient to make the powers proportionate.

  These concerns, in part, led to the Government amendments to remove the provisions to obtain information about people more likely than others to commit fraud and to the introduction of the clause which will make the code of practice a statutory one.

  We have not received representations about Human Rights in relation to any other provisions in the Bill.

  Finally, protecting the rights of individuals is of great importance. But so too are the rights of individuals in general who expect the Government to do everything possible to safeguard the social security system. The current Bill is drafted to ensure the proper balance between individuals' rights and their responsibilities.

Alistair Darling

7 March 2001


 
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