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Lord Higgins: We shall need to read carefully what the noble Baroness said, in particular what appears to be a clear statement of government policy; namely, that they will collect the information only if, at the lighter end of the market, they have already asked the claimant whether he has made a mistake--

Baroness Hollis of Heigham: We would not invariably ask the claimant. I am saying only that in normal circumstances the claimant would be the first port of call for an explanation of why the discrepancies appeared to exist.

I am thinking on my feet, but one can imagine a transnational case in which the last thing one wants to do is to tip people off that inquiries are being made. I would not want that statement to be seen as an absolute statement.

Lords Higgins: In the light of that reply, which we shall study carefully, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 54 and 55 not moved.]

Lord Astor of Hever moved Amendment No. 56:

The noble Lord said: Standards of scrutiny and conduct in matters relating to confidential data are, to say the least, variable in some local authorities. While most local authorities pursue their responsibilities diligently, this probing amendment is an opportunity to highlight the lack of safeguards and to seek reassurance from the Minister.

Disclosure of investigation could lead to physical threats against both elected councillors and council staff. The public have justifiable fears that the powers granted in the Bill could be open to abuse. Looking at some inner-city authorities, whether Hackney or Doncaster, one sees sufficient instances of malpractice and fraud by both elected members and officers to make it evident that safeguards need to be in place. As the Data Protection Commissioner made clear, the volume of information and the quality of some local authorities' safeguards mean that abuse is likely. Until we have a code of practice and know what is in it, a member of the public who felt that a local authority had abused the powers that had been given to it in this Bill would have little recourse save through the ombudsman. That can be a lengthy and unsatisfactory process. I beg to move.

4 p.m.

Baroness Hollis of Heigham: The Government are very clear as regards this amendment and the circumstances in which we would wish authorised officers to make inquiries of the organisations listed. They may be made only when an authorised officer has reasonable grounds for believing that a person is or

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may be committing fraud. We have gone over some of this territory before. Inquiries may be made only about particular persons. That is set out in the new Sections 109B(2B) and (2C), in the Bill. The provision which this amendment seeks to remove ensures that when they are making electronic inquiries, authorised officers are limited in the way I have just described. Our policy intention, which will be achieved by this Bill, is that an officer should not be able to make any inquiry electronically that he could not make in writing. In other words, the protection in Clause 1 has a halo effect on Clause 2.

By removing lines 8 to 11, the amendment widens local authority powers in ways which I am sure the noble Lord, Lord Astor, did not intend. Section 109B contains the provisions which limit authorised officers to make inquiries only where they have reasonable grounds. By removing those lines, the link to Section 109B would be removed and, dare I say it, local authority staff would be able to pick names at random. I am sure that the Committee would not wish that to happen.

More generally, the protections I have already suggested remain. Benefit claimants will know that their information can be checked with third parties and that they are under a duty to tell the truth. If, knowing that, they lie, we have the right and the ability to check their information.

As regards local authorities requiring the consent of the Secretary of State before obtaining electronic access to records, I have already explained that it is our intention that they will not go online until the Secretary of State is satisfied that the necessary safeguards are in place. Again, only some local authorities will have that power and that is where we are confident that they have properly trained and professional officers in place who are subject to these codes. I am certain that the noble Lord has no wish to see unfettered access to electronic information either for local authority or DSS investigators, which is what this amendment would achieve. I suggest that the noble Lord may wish to withdraw his amendment.

Lord Astor of Hever: The noble Baroness is correct. I said that this was only a probing amendment and that we were seeking reassurances from the Minister. She has given those reassurances and the clarifications that we sought. In the light of that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 57 to 59 not moved.]

On Question, Whether Clause 2 shall stand part of the Bill?

Lord Astor of Hever: The e-envoy, Alex Allen, is preparing a White Paper which will oversee a whole range of confidential and other relevant issues that may question or impact on Clause 2. The Data Protection Commissioner cited the work of the e-envoy and suggested that rushed legislation in this or any other area would be bad legislation. That was demonstrated by the destruction and withdrawal of

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the first version of last year's e-commerce Bill. The Question whether Clause 2 should stand part of the Bill gives the Minister the opportunity to explain why the Government believe it wise to pre-empt the envoy's findings. Have the Government synchronised the proposals of this Bill with the work programme of the e-envoy?

Liberty believes that the powers conferred by this clause will be open to both intentional and unintentional abuse. The risk of intentional abuse is clear. Although the Bill gives the Secretary of State or a local authority the power to require the person or body giving electronically accessed information to record the use made of the facility, it is not an absolute requirement. Even if the requirement is imposed, presumably the records are likely to be scrutinised only by the investigators themselves or by the people working for the same organisation, if it happens at all. Given that considerable use is likely to be made of that facility, it would be very easy for an investigator wanting, for a reason of his own, to seek information about someone to access information without being found out.

The risk of unintentional abuse stems from the fear that more information is likely to be accessed by electronic means than where a written request is made. The right to acquire information proposed in the Bill will be subject to requirements in the existing Section 109B(1) that an investigator should request only such information as he or she reasonably needs. An investigator who believes that someone is working for cash in hand while claiming benefit might ask that person's bank for details of any deposits of over, say, 50. A bank employee responding to that written request will ensure that only that information is given. If an arrangement were to be set up with the banker under which electronic access is given to records of transactions on a person's account in the way that many bank customers now access their accounts, the record will not be vetted by a bank employee and the investigator is likely to have access to details of all transactions on the account. I look forward to hearing the Minister's response to these concerns.

Lord Goodhart: Unfortunately, my noble friend Lord Russell is unable to be present today because he has gone down with flu. He and I put our names to the objection that Clause 2 shall stand part of the Bill. I have very little to add to what the noble Lord, Lord Astor of Hever, has said on this matter. However, the fact that great concerns have been expressed about Clause 2 by the Information Commissioner, Liberty and Justice--once again I declare that that is an organisation with which I am associated--should give the Government cause for thought and consideration as to whether further safeguards are necessary before Clause 2, as it now stands, can properly be put into effect.

Baroness Hollis of Heigham: The noble Lord, Lord Astor, has pressed me on three points. The first was e-commerce, the second was intentional abuse by investigators and the third was unintentional abuse by them simply because it is the noble Lord's

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understanding that more information might be returned through the electronic route than by the written route. I understand the concerns.

As regards the e-envoy, it may be helpful if we follow it up in writing. We simply propose to use electronic access which already exists and which could be used so easily. There will be greater controls on electronic access than on written requests because the former will be tracked and an audit trail made available for DSS arrangements.

I need to follow up the noble Lord's points as to whether anything may be forthcoming from the e-envoy. I am not aware that there is because of the relatively limited nature of what we are doing in Clause 2. We can do no more under that clause for these purposes than we can under Clause 1, which obviously does not involve electronic access. If there is anything useful that I can add, I shall be very happy to do so.

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