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The Deputy Speaker (Lord Murton of Lindisfarne): My Lords, before I call Amendment No. 23, I remind noble Lords that if it is agreed to, I shall be unable to call Amendment No. 24, owing to pre-emption.
The noble Baroness said: My Lords, I shall speak also to Amendment No. 25. Amendment No. 23 has two objectives. First, it would widen the categories of persons who may be recompensed by the Secretary of State in return for providing information under the
Clause 3 restricts the potential recipients of payment to credit reference agencies, telecommunications providers and, to a limited extent, water, gas and electricity suppliers. It therefore excludes a number of other organisations from the possibility of payment, notably banks and insurance companies. It also restricts the amount that can be paid to utility companies. Those organisations will bear the majority of the inquiries as a consequence of the Bill--around 55 per cent on the department's estimate.
This is fundamentally a question of equity. The Bill would create a large number of potential information providers to help in the fight against social security fraud. That has not been challenged. The issue is the fairness of the burden of compliance. The Government, who will be the beneficiary of the inquiries, hope to save at least £200 million through lower benefit payments.
In Committee, the Minister explained that there was a general principle that the Government do not pay for information that they are authorised by law to collect. Past practice does not necessarily make that a good principle when we consider the burdens on business. We also know that the general principle is not absolute. It was ignored in the Regulation of Investigatory Powers Act 2000 and is ignored again to an extent in this Bill in relation to credit reference agencies and telecoms providers.
The Minister also argued in Committee that businesses could afford to pay. She read out some profit figures from some major banks. I am troubled by that. If businesses have legitimately made profits in the UK or elsewhere and paid tax on them, that does not create a reservoir into which the Government can dip as they choose.
Those net profits belong to the shareholders. We should not assume that strong profits are made by all the companies that the Government intend to bring within these new information powers. I cite Equitable Life as an example of an insurance company where extra costs would impact on policy holders. The banking sector is also diverse in scale and profitability. We can not assume ability to pay.
I accept that if Government estimates of up to £7.6 million in additional costs are correct, that would not be a large burden on business; but those estimates may be incorrect. Against the background of increasing regulatory burdens on businesses, we should draw a line somewhere.
Amendment No.23 removes the discretion to pay whatever the Secretary of State thinks fit. Amendment No.25 defines that in terms of the costs that are reasonably incurred. Costs will need to be defined, and I hope that they will include the opportunity cost of capital, so that the ability to pay a profit-inclusive
I do not believe that this provision would plunge the Department of Social Security into an administrative quagmire, nor do I believe that businesses would haggle and thereby delay the use of the powers, as suggested by the Minister in Committee. It is unlikely to be in their interests to do so.
I note that the department is prepared to negotiate constructively with credit reference agencies and telecommunications providers, and I hope that the same spirit would prevail in relation to other information providers. I am confident that their representative bodies could present practical solutions that would not create an excessive burden as a result of the amendment.
Earl Russell: My Lords, the noble Baroness, Lady Noakes, has raised an issue that goes way beyond the confines of the Bill. It is a big and an important issue. Therefore, it is not entirely proper to seek resolution tonight because we can only resolve a small part of it. Nevertheless, she has placed noble Lords in her debt by raising the issue, and I hope that the thought she has provoked will spread beyond those here present.
There is an ongoing general argument about the division of cost between government and business. It not only arises in the context of administration undertaken by business on behalf of the Government but it arises constantly in all the debates on social costs and regulation. I should like to see all those issues considered together in a process of negotiation in which we might be able to work out, on some intelligent general principles, who pays for what.
What I would not be so happy with is a process of slow, administrative creep, in which, bit by bit, administration is passed over to private companies and private bodies and carried out on behalf of the department. It began in the Student Loans Bill 1990, when universities were required to take on the day-to-day administration of student loans. That involved taking on a considerable number of staff, running an office, and paying costs that in many cases could have been used to employ one member of teaching staff, and probably two. During the passage of that Bill the Government, purely voluntarily, chose to make a concession. It was not, of course, the full cost-- it never is-- but it was extremely welcome.
In Committee the Minister resisted the idea that the full cost should be met. She said that the Secretary of State should pay what appeared to him to be appropriate, a power that could be curbed or curtailed, where necessary, by judicial review. I am not aware that the Treasury is as easily controlled by judicial review as perhaps some other departments of state.
The principle that public funds are adequate for the purpose for which they are voted seems to be regarded in certain Whitehall quarters as a tautology. This is an issue that should be considered in a wider context than the Bill.
I read the Minister's arguments in Committee because I was unable to be present. She argued that the Government do not pay for information that people are required to supply by law, but do pay firms that make their living out of supplying information for money. That approach has a coherence and an intelligibility in the short term, as a stop-gap measure, and is not an inadequate resolution of the problem. However, in saying that, I do not suggest that we should happily leave the situation as it is.
I remember the protests of British Airways against the charges imposed on it under carriers' liability. It seemed to me that those points were very well taken. An enormous administrative burden was being placed on a body that was not particularly well trained for it, and not equipped with the necessary powers of interpretation and knowledge of immigration law. The idea that administration is part of the majesty of the state, and should be so taken, is not one lightly to be lost sight of.
I hope that, after the little local business outside Westminster is over some time in the next few months, whoever is then in office will be prepared to sit down with representatives of finance and business and enter into a genuine, serious process of consultation about how the general issue of who pays for what should be resolved. It is in that hope that I am prepared in the short term to see the Bill remain as it is.
Lord Astor of Hever: My Lords, I also support the amendment tabled by the noble Baroness, Lady Noakes. Businesses today already face a torrent of red tape, while at the same time trying to remain enterprising and thriving. On their shoulders lie the responsibility of creating the wealth of the nation, and they are competing with foreign companies.
Baroness Hollis of Heigham: My Lords, Amendment No.23 strikes out the categories of organisation that receive payment for supplying information and substitute a duty on the Secretary of State to ensure that arrangements are in place, as he thinks appropriate, for requiring authorised payments to be made to any persons in the list in Clause 109B(2A) in respect of information obtained under the new powers.
We debated the amendments in Committee. Our starting point, as stated so elegantly by the noble Earl, Lord Russell, is that where organisations are required by law to provide information to Government, we do not pay for it. I gave the Committee various examples.
The Information Commissioner-- Data Protection Registrar-- requires organisations to complete detailed registrations of their data holdings, purposes, suppliers and recipients, but she does not pay them for this information. Banks are required to report suspicions of money laundering to the National Criminal Intelligence Service. Utilities are required to provide information to the regulator to enable him to carry out his statutory duties. I do not wish to labour the point, but I simply repeat what I said in Committee: the DSS has had powers since the 1940s to require information from employers about their employees. Again, we do not pay for this, and it was not something that was proposed by the preceding government in the previous 20 years.
This is a good country in which to do business. Multi-national companies are setting up in business in the UK because of our stable economy and benevolent regulatory regime. At the other end of the scale, as I am sure the noble Baroness will know, small French companies are relocating to Kent because the regulatory burden is less and the incentives greater. I could go on to expand on what the Government have done to reduce burdens on business.
With regard to regulation, we have the lowest level of product market regulation of any OECD country. The labour market is less heavily regulated than in other EU countries. The non-wage ongoing labour costs are among the lowest in the OECD and the European Union. The Regulatory Reform Bill will allow us to enact important reforms that otherwise would not take place because of pressure on parliamentary time. Those reforms will be beneficial to business. Each department now has a Minister who is responsible for regulatory reform. We have cut taxes on business. We have cut corporation taxes by a full 3 per cent, and the main rate is now the lowest ever in the UK.
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