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Lord Norton: My Lords, I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

Lord Williams of Mostyn moved Amendments Nos. 20 and 21:

Page 7, line 39, leave out from ("reasons") to first ("is") in line 42 and insert--
("(a) the processing of those data or their processing for that purpose or in that manner").

16 Mar 1998 : Column 502

Page 8, line 2, at end insert--
("(2A) The data controller must within 21 days of receiving a notice under subsection (1) ("the data subject notice") give the individual who gave it a written notice--
(a) stating that he has complied or intends to comply with the data subject notice, or
(b) stating his reasons for regarding the data subject notice as to any extent unjustified and the extent (if any) to which he has complied or intends to comply with it.").

The noble Lord said: My Lords, I have already spoken to Amendments Nos. 20 to 28. I beg to move.

On Question, amendments agreed to.

Clause 10 [Right to prevent processing for purposes of direct marketing]:

Lord Williams of Mostyn moved Amendments Nos. 22 to 24:

Page 8, line 13, after second ("controller") insert ("at the end of such period as is reasonable in the circumstances").
Page 8, line 13, leave out ("within a reasonable time").
Page 8, line 15, at end insert--
("(1A) The data controller must within 21 days of receiving a notice under subsection (1) ("the data subject notice") give the individual who gave it a written notice specifying the steps that he has taken or intends to take to comply with the data subject notice.").

On Question, amendments agreed to.

Clause 13 [Automated decision-making]:

Lord Williams of Mostyn moved Amendments Nos. 25 to 28:

Page 9, line 28, leave out subsection (1) and insert--
("(1) An individual is entitled at any time, by notice in writing to any data controller, to require the data controller to ensure that no decision taken by or on behalf of the data controller which significantly affects that individual is based solely on the processing by automatic means of personal data in respect of which that individual is the data subject for the purpose of evaluating matters relating to him such as, for example, his performance at work, his creditworthiness, his reliability or his conduct.
(1A) Where, in a case where no notice under subsection (1) has effect, a decision which significantly affects an individual is based solely on such processing as is mentioned in subsection (1)--
(a) the data controller must as soon as reasonably practicable notify the individual that the decision was taken on that basis, and
(b) the individual is entitled, within 21 days of receiving that notification from the data controller, by notice in writing to require the data controller to reconsider the decision or to take a new decision otherwise than on that basis.
(1B) The data controller must, within 21 days of receiving a notice under subsection (1) or (1A)(b) ("the data subject notice") give the individual a written notice specifying the steps that he intends to take to comply with the data subject notice.").
Page 9, line 33, leave out subsection (2) and insert--
("(2) A notice under subsection (1) does not have effect in relation to an exempt decision; and nothing in subsection (1A) applies to an exempt decision.
(2A) In subsection (2) "exempt decision" means any decision--
(a) in respect of which the condition in subsection (3) and the condition in subsection (4) are met, or
(b) which is made in such other circumstances as may be prescribed by the Secretary of State by order.").
Page 10, line 1, leave out subsection (5).
Page 10, line 5, after ("(1)") insert ("or (1A)(b)").

On Question, amendments agreed to.

16 Mar 1998 : Column 503

Clause 28 [Crime and taxation]:

The Deputy Speaker (Lord Dean of Harptree): My Lords, if this amendment is agreed to, I cannot call Amendment No. 30.

Baroness Nicholson of Winterbourne moved Amendment No. 29:

Page 17, line 33, leave out subsection (4).

The noble Baroness said: My Lords, Amendment No. 29 seems appropriately draconian in that I have the support of the noble Viscount, Lord Astor, whose tenacity in this matter I now welcome, and I am most grateful to him for his support.

I remind noble Lords why we believe this amendment should be properly assessed. While the current Act of 1984 provides what has seemed to be an acceptable balance between providing proper respect for personal information and the needs of law enforcement and tax collection officials, Clause 28 of this Bill includes provisions which largely replicate those in the 1984 Act but with one additional subsection; namely, Clause 28(4).

I raised my concerns about that subsection in Committee and the Minister was kind enough to reassure me with a government amendment. That amendment deletes the exemption with regard to the first principle, and I warmly welcome that. But I am sorry to see, on careful examination, that it leaves intact the exemption with regard to subject access and disclosure. Therefore, in my view and that of noble Lords on this side of the House, this amendment fails to address satisfactorily the point of principle that, lacking evidence to the contrary, the exemption cannot be justified; in other words, the government amendment fails to deal with the fundamental problem with Clause 28(4) that the blanket exemption is disproportionate.

In order to justify Clause 28(4) there needs to be clear evidence that the absence of the clause would have an adverse effect on important government functions. Those functions which are not enlarged upon in the government amendment must be a department such as the Inland Revenue.

Therefore, I have moved on from the draconian amendment and have suggested in Amendment No. 30 that if we cannot persuade the Government to delete Clause 28(4) entirely, which would be wonderful, we should assist the Government by asking that clear evidence of the necessity of Clause 28(4) is given to us by a specific amendment or deletion followed by a new clause.

Noble Lords will see that Amendment No. 30 refers specifically to the collection of taxes, duties and similar impositions. In other words, Clause 28(1)(c) has been strengthened and enlarged upon. This amendment is a probing amendment and I ask the Government to take it away and examine it. If they are able to do so and will discuss the matter with me outside the Chamber in order to put forward something more appropriate in terms of wording for Third Reading, they would be able to quote Gilbert and Sullivan satisfactorily and suggest that Clause 28(4) "never will be missed".

16 Mar 1998 : Column 504

It is too large a power to give to a modern government. It may be that in the old days of paper records my arguments on Clause 28(4) would not carry the weight which I believe they now carry. But in the days of information technology when powers can be summoned and used so swiftly in terms of access to information and personal data, I believe that Clause 28(4) as it stands is inappropriate and that something more modest, along the lines of my probing amendment, would be more suitable.

The amendment is supported by the noble Viscount, Lord Astor. Therefore, this side of the House is showing its concerns to the Government and asking them to reconsider. I know that the Government have thought carefully about it and that time is short. But I am confident that if we meet to discuss the matter, which is what I request the Minister to do, an answer could be found. I beg to move.

Viscount Astor: My Lords, I put my name alongside that of the noble Baroness to the amendment moved in Committee and I have done so again because I am concerned about the powers. In doing so, I realise that the amendment probably goes too far and a middle way should be found. Amendment No. 30 offers an interesting way forward. Therefore, I look forward to hearing the Minister's response.

5.45 p.m.

Lord Falconer of Thoroton: My Lords, we agreed during Committee stage that Clause 28 is an important part of the Bill, going directly to the balance which has to be struck between individuals' rights in respect of processing of personal data and the need in some circumstances to limit those rights in the general public interest.

The noble Baroness, supported by the noble Viscount, previously moved the first amendment during the Committee stage of the Bill. Subsection (4) allows the Secretary of State, by order subject to affirmative resolution, to specify categories of information for exemption which are generally relevant to tackling crime, apprehending offenders or assessing taxes but which may not prove relevant in every individual case. To the extent that Parliament itself approved--there would have to be a debate on the matter--a selective exemption could be made for particular categories of data. The exemption could only be for crime, offenders or taxation purposes, and as the clause now stands it could only apply to the information to data subjects provision in Schedule 1 of Part II, to the subject access provision in Clause 7 or to the non-disclosure provisions built into the principles of Schedule 1.

As the noble Baroness pointed out, the scope of subsection (4) has already been reduced by government amendment in Committee. We removed the reference to the first data protection principle--fairness and lawfulness. This was in response to general concern about the breadth of the provision, and fully met the specific concern about fairness and lawfulness expressed by the House of Lords' Delegated Powers and Deregulation Committee.

16 Mar 1998 : Column 505

As was said in Committee, the immediate reason for including the non-disclosure exemption was to enable people to pass information to the Inland Revenue in the public interest. I do not detect any dissent from the validity of that particular exemption. The subsection (4) power takes account of the benefits of outsiders assisting the Inland Revenue's enforcement activities, without subjecting them to a test of case-by-case justification which would be completely destructive in these particular circumstances.

As to the subject information exemption, the Inland Revenue's recently introduced self-assessment system uses a range of indicators to identify individual tax returns which justify further inquiries. Subsection (4) will allow an exemption to be made for withholding this critical risk assessment information from data subjects. If it was not withheld, tax experts, if not the individuals concerned, could soon start to compare cases and deduce the revenue's criteria for further inquiry.

Together the exemptions would not only help compliance with the law but also save honest taxpayers many millions of pounds. So for the Inland Revenue, if for no other purpose, we need Clause 28(4). The complete abolition of Clause 28(4), which the noble Baroness and the noble Viscount both propose in their first amendment, does not seem a practical or sensible alternative.

I turn to the second amendment. This would retain but amend subsection (4), first, by applying it only to processing for the purposes of subsection (1)(c)--namely, the assessment or collection of taxes, duties and similar impositions--and, secondly, by replacing the order-making power with specification on the face of the Bill of the types of data to which the exemption applies. There are plainly benefits to that approach. It limits the exemption to an area of processing for which a clear need has already been identified. It would remove the concern expressed in debate about further orders, as yet unknown, coming forward in due course.

We appreciate those concerns. Indeed, we have no more desire than the noble Baroness to allow hole-in-the-corner restrictions on rights that individuals would otherwise enjoy under the Bill. But there are a number of considerations upon which I believe the noble Baroness should reflect in relation to the proposal that she makes.

First, we--and in that I include not just the Government but also Parliament--would lose the flexibility to deal with new developments. At present, I should make it clear that the Government have no other particular purposes in mind for subsection (4) than tax collection. However, circumstances change both within public administration and in the community. The Inland Revenue provision is needed now because the world has changed--more and more data controllers now use computers and the Inland Revenue has introduced a new self-assessment system. It is, in a sense, fortunate that the timing of this Bill gives us the opportunity to consider the merits of an exemption for those particular purposes.

16 Mar 1998 : Column 506

However, once enacted, this Data Protection Bill is likely to need to serve us for a decade or more. The original 1984 Act has had to serve for 14 years, and the House will recognise that we cannot--nor would we want to--put through an amendment to primary legislation on data protection in every parliamentary Session. It is quite possible that changing practices and needs might lead to similar cases being put forward by other departments with an interest in crime or offenders as well as taxation. We do not know at this stage, but the world changes and we need some flexibility to respond when it does.

Secondly--and this is a key point--by using the order procedure we can protect the interests of individuals as data subjects by targeting our exemptions much more precisely on the particular circumstances with which they are intended to deal. That should give reassurance to the House. We do not want to be tempted to cast the exemption wider than we have to now just because there might be a shift in circumstances in, say, three years' time. The order-making procedure gives greater flexibility to tailor and re-tailor provisions and thus reduces any temptation to over-exempt in the first instance, which is what Amendment No. 30 would be in danger of doing. I say that because it relates to taxation as a whole and would, therefore, be much less well focused than the approach in the present clause, which does not give an exemption in relation to taxation as a whole but would only give it to the extent allowed by the order that is actually made.

Thirdly, as I have made clear, we are not in any case contemplating future decisions behind closed doors by civil servants or, indeed, Ministers. The requirement to submit any proposed exemption through the affirmative resolution procedure means that there must be a parliamentary debate about the merits of the case; and that no exemption can take effect unless Parliament approves it. I think that that is a considerable safeguard. Proposing the procedure was an instance of the Government's good faith in the matter. It will, in practice, serve as a protection against any unwise decisions by the Executive on a matter which might affect individuals' rights. We shall, of course, consider all the matters raised this afternoon; but, in the light of the reasons that I have set out and the assurances that I have given, I hope that the noble Baroness will feel able to withdraw her amendment.

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