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
I should like to take each of these points in
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
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
(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
fraudfor 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 inappropriatefor
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 informationthe 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 Authorisationthere 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 Offencesyour 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
There are serious offences, which is why the
law provides for prison sentences as well as fines.
Informing the data subjectthere
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
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.
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 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
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
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
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
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
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
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;
whether the proposed safeguards were
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
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
7 March 2001